Mattel is the world's #1 toy company (ahead of Hasbro and Lego), and it's all because of a peroxide blonde named Barbie. She's still one of the world's best-selling toy brands after more than 50 years, responsible for generating somewhere between 20% and 25% of Mattel's annual revenues. However sales have been under intense pressure for years as rival dolls muscle in to Barbie's territory. The Mattel toy box holds a number of other well-known brands including Fisher-Price infant and toddler toys and Hot Wheels, Matchbox and Tyco cars. There are also several key licensing deals, with partners including Warner Bros/DC Comics, Pixar movies and - until the end of 2015 - the Disney Princesses franchise. A catastrophic foray into interactive software almost brought the company down in the late 1990s. Mattel made a full recovery, but competition remains fierce. A renewed slump since 2012 has led to three different CEOs in three years.
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|Mattel Classic Games||Hot Wheels|
|Whats Her Face||View-Master|
|Fisher-Price||Sesame Street Toys|
|Power Wheels||Polly Pocket|
|Max Steel||Diva Starz|
|Tyco Racing||Rock 'Em Sock 'Em Robots|
Adbrands Weekly Update 18th Jan 2017: Mattel appointed Margaret Georgiadis, currently president, Americas at Google, as its next CEO. Current incumbent Christopher Sinclair will move to executive chairman. President & COO Richard Dickson was passed over for the top job; he remains in his role for the time being.
Adbrands Weekly Update 11th Feb 2016: According to Bloomberg, US toymakers Mattel and Hasbro are in informal talks over a merger. Ironically, smaller Hasbro is emerging as the stronger of the two longtime competitors. Its long-running licensing arrangement for Star Wars merchandise boosted performance for last year, in a marked contrast to its larger rival. Though it remains the #2 US toymaker by revenues, Hasbro overtook Mattel in profitability. Even with the headwinds of currency fluctuation, Hasbro reported a 4% increase in revenues to $4.45bn, a company record. At constant rates the increase would have been 13%. That included a 35% leap in sales of boys' toys, almost entirely as a result of Star Wars-related items. Disney, it its own 1Q results this week, disclosed that Star Wars merchandise had generated retail sales of $3bn worldwide during the quarter. Hasbro gets only part of that: CEO Brian Goldner said the company's Star Wars-related sales were "very similar" to the roughly $500m the company generated in 2005 when the last installment of the movie series was released. No doubt, there will be a similar lift in the current and future years tied in to home entertainment and future movie releases. Hasbro's net earnings rose 8% to $452m. Mattel previously reported a 5% slide in revenues to $5.7bn and a 26% slump in earnings to $369m.
Adbrands Weekly Update 4th Feb 2016: Struggling to reverse the precipitate decline of its cornerstone Barbie brand, Mattel announced the introduction of three new body types for the doll of "curvy, petite and tall" to counter the widening belief that the traditional super-skinny blonde Caucasian look is out of step with modern girls' tastes. Last year, the group also introduced a rainbow palette of seven skintones, and more than 20 different eye colours and hairstyles. "We believe we have a responsibility to girls and parents to reflect a broader view of beauty," commented Evelyn Mazzocco, SVP of the Barbie brand. Barbie's sales have declined by more than 10% in each of the last eight quarters.
Adbrands Weekly Update 3rd Sept 2015: LEGO once again took the lead over Mattel as the world's biggest toymaker, with first half sales up by an extraordinary 23% to the equivalent of $2.1bn in Danish krone. That compared to $1.9bn for the same period for Mattel, and $1.5bn for Hasbro. LEGO's operating profit soared 27% to around $700m. "The results underscore the global relevance and appeal of the LEGO portfolio," said CFO John Goodwin. The three groups were in a similar position this time last year, but Mattel regained its lead in the end-of-year toy buying frenzy, with full-year sales of $6.0bn to LEGO's $5.1bn. This year, though, the impact of currency could allow LEGO to seize the overall top spot for the first time.
Adbrands Weekly Update 28th May 2015: Ads Of The Week: "Anagram Lovers". Every week we wait patiently for one of those clever ads that combines humour and intelligence with visual style, all underpinned by a brilliant idea. Often we wait in vain, but occasionally a spot like this comes along. It's a new ad from Lowe's - oops - Mullen Lowe's Lola Madrid unit for Mattel's Scrabble board game and it's close to perfect. Pure class.
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Free for all users | see full profile for current activities: Mattel was formed in 1945 by partners Harold Matson and Elliot Handler - the Mat and El of the company's name - to market a range of home-made picture frames. Later they used off-cuts from the frames to produce dollhouse furniture. Matson sold out his share in 1949, and Handler took control of the business with his wife Ruth. Their new products included ukuleles and other musical toys, as well as the "Burp Gun" cap pistol. The company had its first lucky break when it sponsored one of Walt Disney's first moves into television, the Mickey Mouse Club, and picked up that company's merchandising license. Far more significant was the invention in 1959 of a girls' dress-up doll, which the Handlers named after their daughter Barbara. Barbie was followed by Ken - the name of the inventors' son - in 1963. Barbie was an enormous hit, and a series of spin-offs and accessories kits have maintained the toy's astonishing global popularity over the years.
Mattel floated part of its stock in 1960 and went on an acquisition spree over the next two decades, buying up a series of other companies including the Barnum & Bailey-Ringling Brothers circus and children's publisher Golden Books. The company also tackled the boys' market with the launch of Hot Wheels cars. But by the 1970s Mattel had begun to run into trouble. The Handlers were removed from control after irregularities were discovered in the company books, and by the mid-1980s, after a disastrous foray into video games with its Intellivision home entertainment subsidiary, Mattel was deep in the red, reporting a $93m loss in 1987 on $1bn sales. Massive restructuring pulled the company back into profit by 1990. In 1994, it bought pre-school toymaker Fisher-Price. Also that year Mattel bought UK company JW Spear from under arch-rival Hasbro's nose. The British company had acquired international rights to the board game Scrabble in 1948, the same year its American inventors sold US rights to a local company later acquired by Hasbro. The two companies have split global rights to the game ever since. In 1985 Mattel's British model car company Corgi was sold to management for £13m.
In 1996, Mattel attempted a $5.2bn hostile takeover of its arch-rival Hasbro, but was forced to pull out on the prospect of an anti-trust investigation. Instead Mattel paid $755m for then #3 toymaker Tyco, which also included the Matchbox model car range, View-Master 3-D viewers and Magna-Doodle drawing toy, as well as the toy licensing rights to Sesame Street. In 1998, the company paid $700m for Pleasant Company, makers of American Girl, a range of theme-based dolls representing different aspects of American history. It also bought up Bluebird, makers of the Polly Pocket miniature dolls for $46.5m.
During the 1990s, the group noticed signs of a distinct change in the market as children became more sophisticated, demanding high-tech toys at younger and younger ages. As a result Mattel began to move heaily into multimedia, setting up a dedicated interactive software division, Mattel Media. In addition, despite the earlier experience with Intellivision, CEO Jill Barad announced that the group would acquire educational software business The Learning Company for $3.8bn. Almost incredibly, Mattel were to be burned a second time for venturing into multimedia entertainment. In their rush to buy The Learning Company, the group apparently didn't give sufficient attention to serious financial problems at the software business, which reported massive losses of $100m only months after the purchase. In another emphatic move towards the computer market, in 1999 Mattel announced a tie-up with Canadian PC-maker Patriot to launch a series of PCs, branded as the Barbie PC and Hot Wheels PC.
Despite restructuring, the financial problems at The Learning Company refused to go away. In early 2000, divisional losses at The Learning Company rumoured to be as high as $300m forced Mattel into a group net loss of $82m for 1999. Group CEO Jill Barad and president Ned Mansour both announced their resignations soon afterwards. Few were surprised when Mattel announced that it was seeking buyers for The Learning Company. The business was finally sold to private buy-out firm Gores Technology at a fraction of the original purchase price. The Patriot computer deal also went bad when the Canadian company went bust at the end of 2000. Several thousand customers who had bought Barbie or Hot Wheels PCs never received their goods and lost their money (Mattel later offered them a $100 voucher in compensation).
New chairman-CEO Robert Eckert, recruited from Kraft Foods, was appointed in 2000, and set about another massive restructuring. The scale of the problems at The Learning Company were revealed when Mattel reported that it would have to write off a $600m loss from discontinued operations, leading to a net loss for the year 2000 of $431m. Eckert's principal goal since then has been to find a way of returning the company to profit while also building sales. This he appears to have achieved through careful management of inventory, and a focus on core brands.
However, in summer 2007, Mattel was forced to issue a massive recall of almost 22 million toys made in China in three separate announcements. Almost 3m of these toys were recalled because they were coated with a potentially toxic lead paint. The vast majority, however, contained small magnets identified post-production by Mattel as a swallowing hazard. Early the following year, in a rare show of solidarity, Mattel and Hasbro joined forces to try to stop Facebook from making an unauthorised software version of Scrabble available to its users. (Mattel has international rights to the Scrabble brand). See full profile for current activities
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