MGA Entertainment Inc.
When people awake to a new day, they might grab some coffee for a jolt of caffeine. Others may perform some yoga to stretch their muscles and joints and gain some natural energy, while others enjoy hitting the snooze button for a few more minutes of sleep. These are new days for MGA Entertainment Inc., and pressing “snooze” on its business and approaching the market in a sleepy manner are definitely not part of the company’s plan. Instead, the manufacturer and marketer of children’s toys and entertainment products is moving forward with renewed vigor and jolting the market awake with a range of new products.
“Right now is a sort of revival for this company,” stresses Casey Collins, executive vice president of global licensing and entertainment. “We had so much going on that was negative with the lawsuit, but now that is over and we are back with new and exciting brands, a wider and richer portfolio of licensed products, exciting entertainment like the Lalaloopsy television movie we launched on Nick Jr. this spring and a new Lalaloopsy animated television series in production for spring 2013. And that is just the start.”
Now in MGA’s past, the lawsuit Collins refers to is the one MGA won against Mattel last year. In April 2011, a federal jury ruled that MGA owns the rights to the Bratz dolls, unanimously rejected all of Mattel’s claims to the dolls and did not award any copyright damages to Mattel. The jury found that MGA, not Mattel, owns the idea for Bratz and the original sketches for the doll. The jury awarded MGA $85 million in damages, and last August, a U.S. District Court judge ruled that Mattel owes MGA an additional $85 million in punitive damages for “willfully and maliciously” misappropriating MGA’s trade secrets, as well as more than $139 million to cover MGA’s legal fees and costs.
“That lawsuit brought a lot of attention to MGA and Bratz, but we are not just the Bratz company,” Collins says. “We are so much more than that, and we are changing the way people think about this company.”
Fashion at the Forefront
Bratz may have been in the spotlight for the last few years, but MGA Entertainment also offers a diverse array of products from its other brands: Lalaloopsy, Little Tikes, Moxie Girlz and Zapf Creation, as well as innovative new brands launching later this year like Novi Stars and Bratzillaz. All of the brands are known for their high level of quality and entertainment value, demonstrated by the awards the brands have won in the past year from groups such as the Parents’ Choice Foundation, Dr. Toy, Kmart, Time to Play magazine, the National Parenting Publications Awards, Practical Parenting & Pregnancy magazine and the Canadian Toy Testing Council.
In February, for example, Toys “R” Us awarded MGA and Little Tikes with Vendor of the Year awards in recognition of MGA’s and Little Tikes’ “commitment, dedication and attention to helping Toys ‘R’ Us be the worldwide resource for kids, family and fun.” This is the second year in a row that MGA and Little Tikes received these awards.
“I joined this company about a year ago, and I came here because I saw tremendous potential,” Collins says. “MGA always has brought innovation and speed to market, and the company is only getting stronger.”
With Bratz, the company is “keeping fashion at the forefront,” he explains. The Bratz brand includes more than 15 lines of dolls, as well as styling heads, doll clothing and accessories, and costumes, cosmetics and accessories for collectors. MGA devotes an extensive amount of time to product development for this brand and works with retailers to ensure the products reflect consumer trends. This strategy appears to be successful, Collins notes, because since fall 2011, Bratz has doubled its shelf space with retailers.
“We are going back to the core essence of the Bratz brand – the passion for fashion,” he stresses. “We always aim to give girls the styles they see in stores, videos, on the runways and in magazines. The Bratz dolls push boundaries – they are edgy, not risqué. We design them to look confident and independent, and have a strong, self-reliant and fearless attitude. They empower girls to express themselves with a positive fashion attitude.”
Bratz was created in 2001 and continues to have a strong appeal with girls; Collins notes that 93 percent of girls ages 3 to 10 know the Bratz brand, and 76 percent of girls ages 9 and 10 own a Bratz doll. MGA has recruited some of these consumers as “brand ambassadors” and gets their input on new products and promotions. The company also is expanding the Bratz brand’s digital presence.
“The world has changed since the launch of Bratz in 2001,” Collins says. “It’s not just the physical dolls now – now the brand has expanded to the web, web games, apps, video games and an animated TV series. When we think about developing future entertainment, we always consider what will help propel this brand. Our goal is to reach girls where they spend most of their time.”
It Starts With A Great Toy
Just as MGA introduced the Bratz dolls and expanded the brand from there, it is using a similar strategy with the Lalaloopsy Dolls. With a tagline of “Sew Magical! Sew Cute!”, Lalaloopsy Dolls are designed to look like rag dolls that came to life, and each has a unique personality based on the fabrics used to make them. The Lalaloopsy line consists of more than 150 products, including dolls, mini dolls, clothing and various accessories.
“Our No. 1 focus always is to develop great products – we don’t want to rely on the licensed goods and entertainment products,” Collins stresses. “We start with a great toy line first and then expand into licensing, but only with blue chip partners. When we see success in multiple categories, then we focus on the fan engagement element.
“The pinnacle of the brands is when every element is working together,” he says.
MGA spends a lot of time building its brands by combining traditional toys with online activities. “It is astounding how much time kids spend online,” he notes. Although MGA continues to focus on developing quality toys, the company wants the same quality reflected in every category. As a result, MGA invests considerable resources in web development, ensuring that social media efforts support the brand’s toys and that online games are engaging, appropriate and fun for the targeted age group.
“The target group for the Lalaloopsy dolls is girls ages four through six,” Collins says. “They spend an average of more than 13 minutes on the website every time they visit, so a lot of our development focuses on this level of attention span.”
Little Tikes has some web content and MGA may develop a branded TV show in the future, but Collins says the company primarily plans to “expound on the success of Little Tikes in a different way.” This brand launched in 1970 and MGA acquired it in 2006. Little Tikes focuses on making “safe, high-quality, durable, fun children’s toys that encourage discovery and learning through active, creative and social play.” These award-winning toys are created for children and babies.
“This trusted brand is strong with parents around the world,” Collins says. “Additionally, 70 percent of the Little Tikes toys are made in the USA, of which we’re very proud.”
With such a strong reputation among consumers, MGA’s focus for Little Tikes is to ensure the brand maintains its presence with retailers, as well. The company’s and Little Tikes’ recognition from Toys “R” for their “commitment, dedication and attention to helping Toys “R” Us be the worldwide resource for kids, family and fun” demonstrates the dedication MGA has to working with retailers, Collins notes.
“Each retail relationship is very important,” he says. “We are constantly in contact with all levels of retail operations, and our CEO, Isaac Larian, stays in contact with all of our buyers. We want to know what works and what products they are excited about. The key is that we have to continue bringing innovation and fun to the toy aisle, and that is something that MGA always has done well.”
Reaching New Levels
MGA’s growth has been strong – it grew by 35 percent in 2011 and expects to grow by 50 percent in 2012 – and Collins expects that trend to continue. “This is a flat industry overall, but we are experiencing tremendous growth,” he says. “We plan to continue to grow with our strong brands, which will allow us to expand to new levels.”
Much of that growth, he notes, will result from new product design and development – actions that are ongoing at MGA. The company always is looking to develop new products and new brands, and it will introduce an exciting new girls fashion doll line called Novi Starz in August, as well as a new sub-brand of Bratz called Bratzilla, Collins says.
“Our CEO Isaac Larian is very involved in the design and development of new products – he is a glorified toy junkie, which is great to see in our leadership,” he explains. “He likes to get his hands on the toys and give input because he has a true passion for this business.
“We are lucky to have so many talented people,” he adds. “So many of the employees have been here a long time and know the business backwards and forwards, which is an important part of product development.”
MGA is “not one of the big boys,” Collins says, so the corporate culture is not beset by a lot of politics and red tape. Instead, the culture is “very entrepreneurial,” he says, which is important as MGA continues to build its presence in the market.
“We see trends and move quickly – we want to push the envelope with our products,” he says. “The lawsuit with Mattel gave us a little chip on our shoulder, but we have a lot of fight left. We have many things in the works – we want to make sure the toy industry knows we’re back and a strong player for years to come.”