Barbie Chief Leaves Mattel in Shake-Up
Mattel Inc. said goodbye Monday to Barbie’s boss and combined its two largest divisions after nearly two years of declining sales of the iconic doll line.
The El Segundo toy maker joined its Mattel and Fisher-Price units and named Neil B. Friedman, 58, to head the combined operations, a promotion from his position as head of the improving Fisher-Price division. At the same time, the company announced the resignation of Mattel Brands President Matthew Bousquette, a 17-year veteran, and said that an unspecified number of support and management jobs would be eliminated.
Sales of Barbie, Mattel’s signature doll and profit engine, have fallen for seven straight quarters on a year-to-year basis. Third-quarter results to be released next week might have spelled the end for Bousquette, said toy industry analyst Sean McGowan of Harris Nesbitt Corp. in New York .
“When things aren’t working and you have tried a number of things, sometimes you shuffle the team,” McGowan said.
The series of moves announced Monday may mean that Mattel will miss Wall Street’s expectations, said analyst Margaret Whitfield of Ryan Beck & Co. in New Jersey. “I don’t think we’re going to see anything good out of Barbie” in the third quarter, she said. Analysts surveyed by Thomson Financial have forecast a profit of 62 cents a share.
Mattel reported a net loss of $94 million, or 23 cents a share, during the second quarter, contrasted with a profit of $23.5 million, or 6 cents, a year earlier. It was Mattel’s first quarterly loss in more than three years.
Lately, Barbie has been shown up by MGA Entertainment Co. of Van Nuys and its hip-hop-styled Bratz dolls, which appeal to many girls who believe they have outgrown Barbie.
“Bratz are making inroads big-time here and overseas,” Whitfield said. “Something had to give.”
Friedman is considered a rising star at Mattel with a knack for developing products for young children. He joined the company after its 1997 acquisition of Tyco Toys Inc., where he was credited with the successes of Tickle Me Elmo and Sing ‘N Snore Ernie in the 1990s.
“He has a retail career that is almost unrivaled,” said McGowan, who also credits Friedman with reviving Fisher-Price in the face of strong competition. Sales at the unit rose 5% in the second quarter.
Putting him in charge of Mattel brands, including Hot Wheels, “is clearly a good move,” McGowan said.
Whitfield was more skeptical. Friedman turned the young children’s product line at Fisher-Price into the “crown jewel” of Mattel, she said, but “whether the same skill set can be transferred to California and rescue Barbie is another matter.”
Mattel said that Fisher-Price would retain research and design facilities in East Aurora, N.Y., but that Friedman would move to El Segundo.
The company said its American Girl business would remain a separate division.
Sales of traditional toys, including building blocks, stuffed animals, puzzles and action figures, fell 5.3% this year through August, according to market research group NPD Group.
The traditional toy market for 5-to-9-year-olds “is very challenging in the near term because that demographic is shrinking” and the children are increasingly attracted to video games, said analyst Timothy Conder of A.G. Edwards & Sons.
Mattel made its announcements after the close of markets. In regular trading its shares fell 11 cents to $16.27. The stock has fallen nearly 17% this year.
Bloomberg News was used in compiling this report.
