Barbie has a new friend: Hello Kitty.
Mattel Inc. said Tuesday it had signed a licensing pact with Sanrio Inc. to design and develop products based on Sanrio’s Hello Kitty and other characters.
That will add to a Mattel stable that includes the iconic Barbie doll along with Fisher-Price toys, Hot Wheels and American Girl dolls.
The deal comes as the El Segundo company is trying to reverse a years-long slump, and Mattel’s beaten-down stock jumped in response to the announcement. The stock gained $1.13, or 11.7%, to $10.78 a share, but it’s still down 32% for the last 12 months.
“We’re excited to bring the Supercute world of Sanrio to life through toys that will allow for fans of all ages to experience Hello Kitty and Sanrio Friends in new ways,” Janet Hsu, Mattel’s chief franchise management officer, said in a statement. Terms of the deal were not disclosed.
Mattel, with sales last year of $4.5 billion, is developing new product channels while cutting costs as it tries to spark renewed sales and profit growth and reduce its heavy debt load.
Mattel is also grappling with a recall of all 4.7 million Rock ‘n Play Sleeper products made by Fisher-Price that have been linked to more than 30 infant deaths since the item was introduced in 2009, according to the U.S. Consumer Product Safety Commission.
Mattel has said that it is not at fault and that the fatalities stem from the sleeper being “used contrary to the safety warnings and instructions.”
Under the Sanrio deal, Mattel will develop toys, dolls, play sets, games, plush toys and other products based on Hello Kitty, Keroppi, Chococat, Badtz-Maru, Little Twin Stars and other Sanrio characters.
The toy lines and games will be available in North America, Europe, Latin America, Australia and New Zealand starting in the fall of 2020, the companies said.
Camilla Yanushevsky, an analyst with CFRA Research, said the licensing deal did not prompt her to change her “hold” rating on Mattel’s stock.
In a note to clients Tuesday, Yanushevsky said her rating reflected her ongoing concern about Mattel’s financial position and the “reputation risk from [the] recall of Rock ‘n Play Sleeper.”
“We prefer to stay sidelined,” she wrote, “until we see sustainable momentum and transformation [at Mattel] into a digital play company.”
Sanrio, New Line Cinema and FlynnPictureCo. also announced earlier this year they would team up to develop an English-language Hello Kitty feature film, the first in the character’s 45-year history.