PAWTUCKET, R.I. (WPRI) – Hasbro expects to announce a decision in the next three to six months on where it will build its future headquarters, and moving out of Rhode Island remains an option, the toy giant’s chairman and CEO tells WPRI 12.
In an interview at his corporate office in Pawtucket, Hasbro CEO Brian Goldner said he would “really like to” keep the company based in the state where it was founded nearly a century ago. But, he said, “we need to be a modern play and entertainment company, which is our mantra, and we have to deliver that in the facility we all live in and work in.”
Noting that Hasbro now has offices in 40 countries worldwide, including multiple ones in the U.S., Goldner said, “We all in our hearts love Rhode Island. But we also have a group of shareholders who invest in this company from all over the world, and they want us to make the best possible decision for our employees, our brands and our company.”
“Obviously, our desire would be to be in Rhode Island, but we have to look broader than that in order to make sure that whatever decision we make is a really good one for the company and our employees,” he added, saying the company is “probably still another three to six months from a real plan.”
- Full interview: Watch this weekend on Executive Suite
Hasbro is one of Rhode Island’s biggest and best-known corporations, with roughly 1,600 of its over 6,000 employees working in the state. But the maker of Play-Doh, My Little Pony and Transformers is also a publicly traded company with a global footprint, pulling in $5.2 billion of revenue in 2017, and that has state leaders nervous about the possibility it could want a new home base.
Goldner acknowledged Hasbro’s internal discussion about a new headquarters has been ongoing for “a couple of years.” He said the company is partly looking to consolidate its Rhode Island workforce — currently dispersed between offices in Pawtucket, East Providence and Providence — and partly seeking the kind of office that would attract a new crop of employees.
“Fifty percent of our workforce is new to the company over the last five or six years,” he said. “So we’re recruiting all kinds of new talent in this digital age — people who are telling stories online, people who are digital marketers, people who are data analysts and scientists. So this isn’t just the workforce that we had 10 years ago, because the requirements of the business isn’t the same as it was 10 years ago. And so we just have to reflect that as we think about planning out the building.”
Goldner, a 55-year-old New York native who has led Hasbro since 2008, said he has been “spending a lot of time” with Gov. Gina Raimondo, “giving her perspective on how we’re looking at a potential move and/or renovation, and deciding what’s the best way to be in Rhode Island.”
Raimondo, who is close to Goldner, is prioritizing the effort to keep Hasbro in the state. She met privately earlier this week with the General Assembly’s two leaders, House Speaker Nicholas Mattiello and Senate President Dominick Ruggerio, to brief them on the matter and strategize.
“Hasbro is a global company with global options in a changing industry,” the three leaders said in a joint statement after their meeting. “As Hasbro looks at its options, we will all work together — with Hasbro, the city of Pawtucket and local leaders from across the state — to do everything we can to keep Hasbro and Hasbro’s jobs in Rhode Island.”
Pawtucket nervous about possible move
For Hasbro, however, remaining in Rhode Island may not mean remaining in Pawtucket. The company has been a major presence in the city since 1962, when it purchased and began expanding the old Potter & Johnston Machine Co. plant on Newport Avenue, where the company’s main campus is today.
Pawtucket Mayor Don Grebien, who was not invited to the meeting of State House leaders this week, has been trying to pressure Hasbro to stay put. He held a surprise news conference the day after the election to demand a bigger effort to keep the company in Pawtucket, a move that is said to have frustrated senior leadership at Hasbro.
Grebien kept up his campaign this week, sending a letter and an economic-impact study to Commerce Secretary Stefan Pryor that estimated losing the company would reduce earnings in Pawtucket, East Providence and Central Falls by $60 million. “The city of Pawtucket and the Blackstone Valley cannot afford another loss,” Grebien said, alluding to the closure of Memorial Hospital and the PawSox’s planned move to Worcester.
Goldner indicated that staying in Pawtucket is still an option, but not the only one.
“Obviously a renovation is one way to look at it, building a new building is another way, [and] looking at available buildings,” he said. “We’re just in the midway through that process. Obviously we spend time with our board of directors because whatever we do, it’s a big investment.” He also said Hasbro has talked to “people who are developing proposals in a number of locations that seem interesting to us.”
Although Goldner did not offer specifics, it’s widely known that Hasbro is seriously considering a potential move to Providence. The city’s mayor, Jorge Elorza, said Thursday he was “not in a position to say” where the company is looking.
“If you get a Fortune 500 company that’s interested in relocating to your city, what mayor’s office, what city, would not do everything they could to try to land them?” Elorza said, though he promised not to get into a bidding war with other cities.
“So it’s really a matter of understanding what it is that the company wants to do,” Elorza said. “We’re still waiting. They have some critical decisions to make. But certainly we would welcome them with open arms and do what we can to have them here.”
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Loss of Toys R Us ‘has a big impact’
The headquarters decision comes at the end of what Goldner acknowledges has been “a disruptive year” for Hasbro due to the demise of the nation’s biggest toy retailer, Toys R Us. He made clear he is still frustrated with how the investment firms that controlled Toys R Us handled its financial problems.
Initially, Goldner noted, they announced plans to restructure Toys R Us but keep its roughly 800 U.S. stores open. “That was a big surprise, because they did that by choice,” he said. “That was the choice of the financial sponsors to go in that direction.”
“And then they surprised everybody again when they went out and declared bankruptcy to liquidate,” he said. “Again, it was a choice that they made.” Hasbro lost money when Toys R Us failed to pay for the inventory the company had already sold to the retailer, and was hit again as Toys R Us sold off that inventory at rock-bottom prices.
Now, Hasbro and archrival Mattel are going through their first Christmas shopping season without Toys R Us. The retailer had accounted for 9% of Hasbro’s global revenue, and about two-thirds of those sales were generated in the U.S.
“It has a big impact,” Goldner said.
The effects have been clear. Hasbro’s third-quarter earnings disappointed Wall Street, and the company was forced to lay off a “single-digit percentage” of its worldwide workforce. As of Thursday, spooked investors had driven Hasbro shares down to nearly their lowest level in the past year. It’s also led to a lawsuit from pension funds, which argue the company was not forthcoming about the Toys R Us situation; Hasbro says the allegations “have no merit and we intend to vigorously defend against them.”
Now, though, Goldner thinks the worst is past. “By 2019 we believe we will return to growth, and that would be without Toys R Us,” he said.
Meanwhile, Hasbro is adapting to a new retail landscape. Unsurprisingly, Goldner says some former Toys R Us consumers are turning more to online shopping. But the company is also expanding the number of places where its products are sold, adding 21,000 new retail locations in the last three years.
“So it’s not the full array of products that used to be at Toys R Us, but it might be Nerf at a sporting goods store; it’s a collectors product for fans around Marvel and Star Wars that may be at a gaming store, like a GameStop,” he said. “So what we’re doing is we’re dividing up the market.”
Bigger role in new ‘Bumblebee’ movie
During a tour of Hasbro’s brand showcase in Pawtucket, Goldner described how the company is trying to innovate to stay competitive, emphasizing its multimedia efforts like movies, cartoons and video games, as well as a growing investment in social media and other online platforms.
A key part of that strategy is “Bumblebee,” the latest movie in the Transformers franchise, due out Dec. 21 from Paramount. While Hasbro has been licensing its brands to filmmakers for years, the company shouldered a larger part of the new movie’s budget in exchange for more creative control.
“This movie really brings back the heart and the humor that we had seen in Transformers in the first film, frankly, and then it got to be bigger and bigger but probably with less heart and less humor,” said Goldner, who is an executive producer of “Bumblebee.” Other movie efforts include an animated “My Little Pony” sequel, now in production and due out next year.
Hasbro is building up a portfolio of divisions to help with its multimedia efforts, as well. The company now owns Backflip, a mobile-game maker in Colorado; Wizards of the Coast, a Seattle card-game maker and producer of the newly released Magic: The Gathering Arena online product; and Boulder Media, an Irish animation studio.
Hasbro has also acquired the Power Rangers franchise from Bandai, the company where Goldner got his start in toys, and plans a new TV show on Nickelodeon as well as another movie in the next few years. “We really think we can do far more with the brand than has been done recently,” Goldner said.
Covered a lot of ground with Hasbro’s CEO in our interview, including this interesting take he had on kids, screens and board games.
Our interview – including when Hasbro will pick its new HQ – airs tonight starting at 5 on @wpri12 pic.twitter.com/9rBsoPKJTH— Ted Nesi (@TedNesi) December 13, 2018
However, Hasbro is not giving up on physical toys or classic brands. Monopoly keeps getting reinvented, with new Fortnite, Game of Thrones and Millennial editions among the recent efforts (though some Millennials weren’t happy with theirs). There is also social media buzz about a new toy out this holiday season called Yellies, which move faster depending on how loud a child screams at them — not every parent’s cup of tea.
And then there is Play-Doh. “It’s one of our most global brands because creativity and colors is something that every parent can get behind,” Goldner said. Play-Doh is finishing a strong year, he said, and the company is beginning to manufacture it in Massachusetts again, at a plant in Longmeadow. Hasbro has even patented Play-Doh’s scent. (Goldner still advises against eating it.)
Asked about what’s different in the toy industry since he became CEO a decade ago, Goldner said, “The biggest change in our business is the same with a lot of businesses, which is … the rate of change in what the consumer expects and their expectation of enjoying a brand anytime they want in any format across any screen or any play experience.”
Another change is the rising profile of Goldner himself.
He was recently named to the board of directors at CBS Corp., coming in as part of a shakeup there after sexual-misconduct allegations led to the ouster of CEO Les Moonves. And he is currently serving as chair of the Partnership for Rhode Island, a nonprofit made up of the CEOs of major local employers including Hasbro, CVS, Citizens Bank, Bank of America and FM Global.
Goldner, who started his career in the advertising business, recently signed a contract extension with Hasbro that would keep him in the CEO’s office through the end of 2022. (His No. 2, Hasbro President and Chief Operating Officer John Frascotti, was named to the company’s board at the same time.)
“I love what I do every day, and every day is different,” Goldner said. “I’ve been at the company 19 years, and I’ve had about eight different jobs. I constantly am working on different parts of our business and honing the way we innovate and that we tell stories, or the way we garner consumer insights. No one day is the same as the next one, so that’s what fun.”
Watch Hasbro CEO Brian Goldner’s full interview on Executive Suite this Sunday at 6:30 a.m. on Fox Providence, 7:30 a.m. on The CW or 8 p.m. on myRITV – or right now on WPRI.com.
Ted Nesi (email@example.com) covers politics and the economy for WPRI.com. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook
Dan McGowan and Kim Kalunian contributed to this report.