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Author: TMFDavidG Big gold star, 5000 posts Old School Fool Supernova Phoenix 1
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Subject: Hasbro shuts down its retail stores. Date: 1/5/2004 3:14 PM
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Disappointing news, but likely a smart move:

http://quotes.fool.com/custom/fool/html-news.asp?guid={E3CFE563-9201-4E06-B121-AF7E2A37ABFC}&currticker=has&symbols=has&nx=&bx=

I'd missed this over the Christmas holidays (this was 12/28) -- maybe that was purposeful, on the company's PR front.

David G.
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Author: Eldrehad Big gold star, 5000 posts CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1100 of 1220
Subject: Re: Hasbro shuts down its retail stores. Date: 1/5/2004 3:33 PM
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Disappointing news, but likely a smart move:

I agree with the 'smart move' statement. Hasbro will likely never be world class at retail. Better leave the retailing to those who are or can be, and focus resources and energy on those areas where Hasbro adds the most value and is or can be, itself, world class. Even if the retail operations were distinctly profitable, organizational focus can not be overrated.

Just because a company is telling us its making a move in order to change or refine focus, this isn't always true (it's like that word I love to hate so much: synergy). Sometimes it's just divestment of an underperforming business, and 'focus' is the mantra the company thinks it can sell. While I always question which one it is (a real change in focus, or just lip service), last time Hasbro told us they were changing focus (to core brands), they did, and executed the change well. Based on that, I am inclined to give them the benefit of the doubt here as well.

Regards,

Eldrehad



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Author: TMFDavidG Big gold star, 5000 posts Old School Fool Supernova Phoenix 1
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Subject: Re: Hasbro shuts down its retail stores. Date: 1/5/2004 3:56 PM
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Eldrehad,

Good to hear from you. Your perspective is, as usual, well stated and appreciated.

Do you own shares? And if so, what's your cost and what's your goal with this one?

David

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Author: Eldrehad Big gold star, 5000 posts CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1102 of 1220
Subject: Re: Hasbro shuts down its retail stores. Date: 1/5/2004 5:22 PM
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Your perspective is, as usual, well stated and appreciated.

Thank you for the kind words. :-)

Do you own shares? And if so, what's your cost and what's your goal with this one?

I do own shares. I took a position at $12.00 in January of last year, and doubled it at $15.79 in May of last year, so my total basis (not counting transaction costs) is about $13.90 (not counting trasaction costs is fair in my case, as the dividends along the way have pretty much offset them). I just did a 'back of the envelope' calculation of my personal CAGR for Hasbro (considering the two different investments, and the size and timing of each) and figure my rate of return at about 70%/year so far, so not bad for one year to say the least.

My original goal was (hopefully) a double from my original $12 within about three years on the short side (for a CAGR of about 26%) and five years on the long side (for a CAGR of about 15%). With regard to the doubling of my position, while I was originally thinking 3 to 5 years to get to 'fair' value, after a 30% or so rise in less than six months it looked to me as if 'Wall Street' was catching on (and it was this 'catching on' I was waiting for) sooner rather than later. Again, since it was the 'catching on' I was waiting for, and since it looked like it was happening (even more quickly than I'd originally hoped), I doubled. To use a surfing analogy (I'm a native Californian, even though I've never surfed), I was waiting for the 'wave', and once I thought I saw it (the quick 30% rise), I decided to paddle a bit faster to maximize it (the double of my position). Make no mistake, I am not a market timer as market timing is outside my circle of competence. My original investing hypothesis suggested that Hasbro was undervalued, and that 'someday' fair value would be realized - the quick gain in a short time simply told me that the 'someday' might be happening sooner rather than later.

I've been toying with the idea of at least locking in some gains and selling half my position (as we've been flirting with the double from $12 for a little while now). I haven't seen anything to date that would lead me to believe that Habro is worth any less than my original goal of $24 in 3-5 years, so even if the upside is largely gone, I don't see any significant downside, so am in no hurry to sell. That doesn't mean I don't think we can go down from here, we certainly can. What it means, at least for me, is that even if we do hit a 'bump' in the road, I've no reason (so far) to think my goal of $24 unreasonable - so if we do hit a bump in the road, it'll just mean I have to wait a little longer - no big deal. I'm therefore willing to sit tight and not make any 'moves' until after I've seen the next quarterly release.

So in summary, to answer your questions succintly, I do own shares, my average cost is $13.90, and my original goal was $24/share in the 2006-7 timeframe. The run-up ahead of schedule has necessitated re-evaluating said goal, and I'm awaiting the next release (the one for the quarter in which 'everything' happens for Hasbro) before conducting said re-evaluation.

Regards,

Eldrehad








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Author: feleck Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1111 of 1220
Subject: Re: Hasbro shuts down its retail stores. Date: 6/7/2004 8:03 PM
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Kind of late here, but one possibility regarding closing stores is dealing with retailers.

The Wizards of the Coast products are geared for gamers, gamers like stores they can go hang out in and game. It seems somewhat a given that giving them stores increases sales.

But, and here is the big but, there are already such stores out there, Hobby Shops. Low end retailers with low margins and high overheads. They do NOT appreciate competing with big chains(just ask them candidly how they would feel to learn GW is putting a shop in their neighborhood).

When your the only game in town, you can get away with it(again, just ask GW). OTOH, look at the popularity of WizKids products, or heck look at every alternative game that comes down the pipe. Time and again I see Hobby Stores back these new games in the hopes to get out from under the GW thumb. With MageKnight they have made good progress(though after checking out the Topps site, either WizKids needs to refine their business model and cut down on overhead, or stores need to push the game more).

By closing their retail outlets, Wizards get's that retailer loyalty back, to some degree.

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