Simply Business

Mattel to Reanimate Sales with Interactive Barbie

BarbieSlumping Barbie sales are urging Mattel to become more competitive in the toy industry. The company hopes to revitalize their sales with Hello Barbie, a doll that talks to children.

Revitalizing the Toy Business

Mattel’s profits were at an all-time low in the third quarter at around 33 percent. The declines reflect the increasing troubles for a global toy giant still struggling to stay relevant in an increasingly digital world.

Christopher Sinclair noted that the results were “broadly in line” with the company’s expectations. Before iPads and interactive robotic toys, Mattel was the leader in the toy industry. This all changed as new companies adapted and took advantage of evolving trends, and more importantly, digital technology.

Barbie itself was the toy of choice of little girls for quite a long time, but has recently struggled to maintain relevance in the past few years. Sales of the designer doll fell by 16 percent in 2014, while the company’s overall sales fell by six percent.

The third quarter saw Barbie sales fall by 14 percent, and the company’s net income down to $223.8 million, or around 66 cents a share. Their net income went down from $331.8 million or around 97 cents a share in the same period last year.

Mattel will also face the loss of the Disney Princess line, one of the company’s most lucrative licensing deals, which is set to expire within the next year.

Pressure and Struggles


Image Credits: Coolcaesar at the English language Wikipedia

The toy company is under increasing pressure to show investors that it can still be innovative and quick-to-market in the face of growing competition. Much of that pressure has fallen on the company’s chief operating officer, Richard Dickson, who is also one of its key creative executives.

In a call to discuss the company’s results, he says, “Clearly, we have our work cut out for us. You don’t look at those products as being the silver bullet that saves the company, you look at them as being an example of what these guys are going to do in the future in terms of product development.”

Mr. Dickson added that the company was also “increasingly confident” that it could cover the revenue hole form the future loss of the Disney Princess line.

Mattel is planning to introduce Hello Barbie this coming November. The new doll is an interactive, Wi-Fi connected doll that will retail for $75. The company also announced a partnership with Google to create the View-Master, a virtual reality headset.

Financial analysts and investors alike are anticipating how the new Barbie doll will compete with similar toys in the market.