Skip to main content

International Business 'Barbie is falling off a cliff': Mattel removes CEO amid sales warnings

Women with their children visit Barbie toys on display for sale at the Kids Fun Expo in Beijing. Mattel manufactures Barbie toys.

Andy Wong/The Associated Press

At 55, Barbie is showing signs of fatigue.

Mattel Inc., parent company of the iconic doll, is going through a bad patch, warning of a fifth consecutive fall in quarterly sales amid the continued decline in Barbie's popularity.

El Segundo, Ca.-based Mattel on Monday removed its chairman and chief executive officer, Bryan Stockton, after only three years at the helm. Long-time director Christopher Sinclair is taking over until a new CEO is found. The company is hitting restart as it struggles to breathe new life into the marquee Barbie brand and find the right mix of toys that resonate with boys and girls in an increasingly technology-driven industry.

Story continues below advertisement

At the same time, Mattel – which also makes Hot Wheels and owns the pre-school Fisher-Price portfolio – has made some smart diversification moves, such as last year's acquisition of Montreal-based construction-toy maker Mega Brands Inc., say analysts.

"Yes, Barbie is falling off a cliff. But the business is generally sound," said Lutz Muller, president of toy-industry consultants Klosters Trading Corp.

Sales of Barbie dolls fell 21 per cent in Mattel's third quarter and investors are waiting anxiously for the latest numbers in the fourth-quarter earnings report on Friday.

New York analyst Chris Byrne, also known as The Toy Guy, says Mattel still has many strengths in the fight for retail shelf space against Lego AG and Hasbro Inc. and other smaller players.

He points to the company's recent commitment to new product development with the appointment of two respected industry players, Richard Dickson and Tim Kilpin, as co-presidents and chief brands officer and chief commercial officer, respectively.

The Mega Brands deal provides global expansion in the pre-school construction category with the MEGA Bloks brand as well as co-branding opportunities with Fisher-Price, Mr. Byrne added.

Needham & Co. toy industry analyst Sean McGowan said he was anticipating disappointing fourth-quarter earnings but that Mattel came up even shorter than he expected on its fourth-quarter pre-announcement.

Story continues below advertisement

In its preliminary fourth-quarter results, Mattel said worldwide net sales in the fourth quarter were $1.99-billion (U.S.), down 6 per cent from last year. Profit dropped nearly 60 per cent to $149.9-million, or 44 cents per share, compared with $369.2-million or $1.07 in the fourth quarter of 2013.

It will take a while before the company shows signs of a turnaround, Mr. McGowan said.

"These problems can be addressed quickly but they can't be fixed quickly," he said.

Among the plans to refresh Barbie is a feature animation film – Barbie in Princess Power – slated for spring in which she features as a superhero.

"I think they're on their way to driving Barbie with a story," Mr. Byrne said. "[Creator] Ruth Handler is probably spinning in her grave thinking of Barbie as a superhero."

Mr. McGowan suggests that there is a paradoxical element to the aging Barbie storyline. "For some consumers, like mothers and grandmothers, the fact that Barbie has been around for almost 60 years is a plus and for others it's a negative; they want something new."

Story continues below advertisement

Mattel has successfully marketed other dolls, such as the Monster High and American Girl lines, but not enough to offset almost three years of falling Barbie sales.

The company also needs to go more boldly into the high-growth digital and games sector, Mr. McGowan said.

"It's definitely time for them to shed their fear of digital consumer entertainment software."

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter