In recent weeks the company behind Barbie dolls and Hot Wheels cars, which has seen its market value plunge by 20% this year, has replaced its chief executive and much of its leadership team. Games are afoot at Mattel. Big shareholders are calling for a sale. Anyone betting on the business has one hope: that Mattel can remake itself from a traditional toymaker into a buzzy entertainment firm.
Interested buyers are said to include Zuru, a maker of water pistols, and Authentic Brands, custodian of trademarks from Care Bears to Juicy Couture.
In a recent survey by Mintel, a research firm, 65% of toy buyers said price is now their top consideration. It is a bad time for producers of playthings. The Iran war has sent commodity prices soaring. Toys of the sort Mattel makes require plastic, and plastic requires crude oil. Parents, feeling the pinch from inflation, are turning stingy. Many are turning to retailers’ cheaper own-brand alternatives. It will fall to Mattel’s new leadership to bring back the joy. Before that, he was in charge of Pandora, a music-streaming service. To date, however, the company has struggled to make use of this treasure trove. But the boost to doll sales was short-lived. As Jaime Katz of Morningstar, a research firm, notes: “It was more about ladies dressing up in pink and showing up at the movies.
On the earnings call he told investors that what drew him to Mattel was what had drawn him to Condé Nast: its intellectual property (IP). “Barbie”, the highest-grossing film of 2023, boosted the company’s operating profit by around $100m (or 15%) the year of its release. Mattel’s latest films, “Masters of the Universe” and “Matchbox: The Movie”, have been flops.
Roger Lynch, who took over as chief executive last month, previously ran Condé Nast, publisher of Vogue.
