4Kids chief steps down after 25 years

The chairman and CEO of New York-based children’s TV distributor 4Kids Entertainment is retiring after almost a quarter of a century at the firm as it continues to weigh a sell-off.

Alfred Kahn is leaving 4Kids today and the company is seeking a replacement CEO, having appointed director Michael Goldstein interim chairman.

“After almost 25 years, I have reached the point in my career where I want to relinquish my responsibilities at 4Kids,” said Kahn.

“The last several years have been particularly difficult and demanding with the business of 4Kids being buffeted by the financial crisis. After helping steer the company through challenging times, I have decided that it is the right moment for me to retire.”

Paying tribute to Kahn, Goldstein credited him with the sales and merchandising success of some of the biggest shows in recent children’s TV history, including the likes of Pokémon, Yu-Gi-Oh!, Teenage Mutant Ninja Turtles and Cabbage Patch Kids.

4Kids has had a tough time over the past two years. Severely hit by the recession and competition from the likes of Disney, Turner and Nickelodeon, the company announced in the summer of 2009 that it was “evaluating its strategic options.”

This was soon followed by the news that Nickelodeon had snapped up the rights to the Teenage Mutant Ninja Turtles franchise amid worsening 4Kids quarterly losses. The firm was suspended from the New York Stock Exchange in June last year and shifted to the OTC Bulletin Board market instead.

But in November it discontinued its trading cards business and reported a 43% drop in Q3 revenue to US$3m and a loss of US$US9.8m, nearly double the US$5m figure it reported for the same period a year earlier.

For the first nine months of 2010, 4Kids reported a 45% fall in revenue, from US$17.9m to US$9.7m and a marginal narrowing of losses from US$20.8m to US$19.8m.

But there are bright spots on the horizon.

“We have an exciting year ahead with a Yu-Gi-Oh! 3D movie scheduled for release in the US in late February 2011,” said Goldstein.

“We are encouraged by the performance of our five-hour Saturday morning block of Japanese animation, called Toonzai on CW 4Kids, our website 4Kids.tv and our new video portal Toonzaki. 4Kids is also negotiating for merchandise licensing rights and television broadcast rights to a number of promising new properties, which we hope will create future revenue streams for the company.”

However, the firm added that it was “continuing to explore a variety of strategic alternatives, including a review of the capital structure of the business and a possible sale of all or a portion of the company’s stock or business. There can be no assurance that any such transaction will occur.”

4Kids was up 7.84% today at 0.55 cents, giving the company a market capitalisation of US$7.44m.