Mattel Eyes Acquisitions, Expansion of Doll Centers

Mattel Inc. is readying itself to again make acquisitions in the toy industry, and also may expand its boutique and restaurant concept dedicated to its popular American Girl dolls, its chief financial officer told analysts Monday.

Kevin Farr’s comments at an analysts meeting in Hollywood came as part of the company’s efforts to focus the financial community’s attention on Mattel’s robust cash flow and renewed attention to smart investment opportunities.

Any acquisition would be a hot-button issue with Mattel investors, who three years ago watched the El Segundo-based company’s stock fall 65% as a result of the disastrous addition of software maker Learning Co., which bled red ink from the moment Mattel paid nearly $3.6 billion for it.

But any acquisition under Chief Executive Robert Eckert, who came on board two years ago after former leader Jill Barad’s abrupt resignation, would be closer to Mattel’s purchase of American Girl creator Pleasant Co. than to Learning Co.

“Historically, when Mattel has done toy acquisitions, they’ve performed well,” Farr told the analysts, according to a meeting transcript produced by the Fair Disclosures Financial Network. “It’s when we moved outside of our core competency of traditional toys that we seem to get into trouble. In the future, if we announce an acquisition, you can expect it to be strategic.”

Farr also said that a “top” investment possibility for Mattel is an East or West Coast site for a new American Girl Place, an always-at-capacity Chicago establishment centered on the extraordinarily popular line of expensive history-based dolls.

The dolls, books, accessories and outfits--complete with matching outfit for the real little girls--are otherwise sold only through catalogs and on the Web.