Mattel Wins Contract for Harry Potter Toys

Mattel Inc., maker of Barbie dolls and Matchbox cars, on Thursday said it won a contract from Time Warner Inc. to make toys and other products based on the books and films of popular children’s character Harry Potter.

Separately, El Segundo-based Mattel, the world’s largest toy maker, named Kevin Farr chief financial officer, effective immediately, as its management shake-up continues.

Farr, 42, replaces Harry Pearce, who had said last month that he will retire in March. Farr, who had been senior vice president and corporate controller at Mattel, will report to acting Chief Executive Ronald Loeb.

Farr’s appointment comes a week after Chief Executive Jill Barad resigned under pressure.

Getting exclusive rights to make all the toys for one of the hottest children’s book series is considered a small victory for the troubled toy maker whose shares have lost 75% of their value since March 1998.

“One license is not going to change the overall picture, given everything else that’s going on there,” said ABN Amro analyst Beth Burnson, who rates Mattel “outperform.” “Still, just winning it is a bit of a coup, because I’m sure it was a hotly sought-after license.”

Mattel shares fell 50 cents to close at $10.25 on the New York Stock Exchange.

Terms of its contract with Time Warner’s Warner Bros. studios weren’t disclosed. The best-selling, award-winning “Harry Potter” book series has been published in 115 countries and 28 languages, with more than 18.4 million copies sold in the U.S. alone.

Warner Bros.’ Worldwide Consumer Products division received worldwide licensing and merchandising rights for the book series as part of a contract with author J.K. Rowling to film the first two Harry Potter books.

Harry Potter is the tale of a young orphan who learns he has magical powers and gets into adventures at his school, Hogwarts School of Witchcraft and Wizardry.