Playtime's over for Mattel chief as Barbie sales slide
Faltering attempts to revive doll-related product lines lead to changes at the top for toy manufacturer
Toy giant Mattel’s CEO Bryan Stockton has fallen on his plastic sword, following a steep decline in the company’s fortunes – with a 6% fall in sales over Christmas largely ascribed to the waning popularity of Barbie.
First released in the late 1950s, the blonde-haired, blue-eyed female toy has been one of the biggest-selling doll franchises in the world. But over the past five years, Barbie and her accompanying figures – including long-time beau Ken – have fallen out of favour as young girls have opted for gaming experiences on tablet computers. Indeed, from 2009 to 2013, Barbie’s representation of the US market for dolls and accessories sank from 25% to 19.6%. While Mattel had sought to compensate with quirkier and edgier fare under the Monster High brand, sales in that line have failed to help make up the difference.
Mattel’s woes demonstrate that, with companies having to constantly evolve their products to fit children’s technological and behavioural advances, leaders of toy companies are now battling more for their customers’ time and attention than department-store shelf space. For example, off the back of a series of billion-dollar grossing movies, Hasbro started selling the giant, two-foot high Transformer called Metroplex in 2012 – charging more than £80 for the privilege. However, the product failed to reverse the company’s 23% fall in its sales of boys’ toys. Similarly, the Tamagotchi market has been significantly blighted by the rise of Apple and Android devices accessible to children: instead of paying for toy Tamagotchis, children can now download virtual pets from Google Play and the Apple Store.
While Mattel had made up some ground through a line of toys based on Disney’s blockbuster movie Frozen, the studio has already announced that it will be moving its licence across to Hasbro in 2016. Meanwhile, Mattel’s full-year net profits for 2014 showed a slump of more than £266 million from the previous year, with operating income for the fourth quarter reaching £152m, compared to £317.5m for the same period of 2013. As such, new acting CEO Christopher Sinclair said the time was right to “revitalise the business and to identify the right leadership” for the firm.
Perhaps the company can take heed from the ongoing revival of Lego, which has managed to find a profitable avenue of relevance in this era of intense brand competition. The creation of what amounts to a “Lego cult” has been particularly useful in restabilising the firm – no longer restricted merely to children, it has branched out its offerings, product and price-wise, to a fit people of any age, and has amassed significant loyalty. Interestingly, a professor of mathematics recently calculated that there are more than 915 million ways to combine six, eight-stud Lego bricks.
For further thoughts on how companies can cope with disruptive business conditions, read this special CMI blog.