This excerpt taken from the HAS 10-K filed Mar 9, 2005.
Marketing and Sales
Our products are sold nationally and internationally to a broad spectrum of customers including wholesalers, distributors, chain stores, discount stores, mail order houses, catalog stores, department stores and other traditional retailers, large and small, as well as internet-based "e-tailers." Our own sales forces account for the majority of sales of our products. Remaining sales are generated by independent distributors who sell our products principally in areas of the world where we do not otherwise maintain a direct presence. We maintain showrooms in New York and selected other major cities worldwide as well as at many of our subsidiary locations. Although we had more than 3,000 customers in the United States and Canada during 2004, including specialty retailers carrying trading card games and toy-related products, there has been significant consolidation at the retail level over the last several years in our industry, which we expect to continue. As a result, the majority of our sales are to large chain stores, distributors and wholesalers. While the consolidation of customers provides us with certain benefits, such as potentially more efficient product distribution and other decreased costs of sales and distribution, this consolidation also creates additional risks to our business associated with a major customer having financial difficulties or reducing its business with us. In addition, customer concentration may decrease the prices we are able to obtain for some of our products. During 2004, sales to our three largest customers, Wal-Mart Stores, Inc., Toys 'R Us, Inc. and Target Corporation, represented 21%, 15% and 10%, respectively, of consolidated net revenues, and sales to our top five customers accounted for approximately 50% of our consolidated net revenues.
We advertise many of our toy and game products extensively on television. Generally our advertising highlights selected items in our various product groups in a manner designed to
promote the sale of not only the selected item, but other items we offer in those product groups as well. We introduce many of our new products to major customers during the year prior to the year of introduction of such products for sale. In addition, we showcase many of our new products in New York City at the time of the American International Toy Fair in February.
In 2004, we spent $387,523 on advertising, promotion and marketing programs compared to $363,876 in 2003 and $296,549 in 2002.