Tag Archives: Mattel

Mattel and Hasbro Considering a Merger—Again

matty-kid-1A recipe for disaster corporate success: Take 1 part struggling Mattel Toys, combine it with 1 part more of longtime rival, Hasbro Toys, then sprinkle with a dash of shrinking consumer interest and a smattering of unpalatable market effects (such as crumbling Toys ‘R Us (TRU) infrastructure), and what do you have? We don’t know, but the world’s two biggest toy companies appear to be contemplating a merger that (they hope) would cook up profitable “hot” products (to display on those vanishing TRU store shelves?), raise “Has/Mat” stock prices, and boost their newly combined mega-company’s bottom line. But WILL it?

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Will all of this corporate merger/restructuring simply result in a bland melange of bombast trumpeting, “Hey, look at us, we’re doing something BIG about our troubled toy industry.” Or is this all going to boil over into an even bigger, blander pot of  “kids-just-don’t-care-about-toys-anymore” reality stew? It will be interesting to toy fans and collectors to find out. Here’s the latest article we’ve found on this possible merger and its hoped-for final effects. Read it, watch the Mattel CEO video, and decide for yourself whether this merger is a good idea

Bottom Line: This move seems like too MUCH, and too LATE, to us. If the two companies combine, wouldn’t there be less urgency, less rivalry, less competitive spirit and less innovation? Monopoly the game, may be fun to play, but monopolies in real life rarely work out well for consumers. Company execs and stockholders may benefit in the short term, but toy fans in general will probably be quickly bored by all the new “tech toys” Mattel’s CEO seems to be so enamored of. All this hoopla looks like it’ll be one more nail in GIjOE’s coffin box. <ouch>

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Ripple Effects of Chapter 11 Filing By Toys ‘R Us Begin to Spread to Manufacturers— Declining Profits Now Reported By Hasbro and Mattel

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Where are all of our customers? As the number of independent toy retailers and their “brick-n-mortar” stores continues to decline, toy manufacturer claims that their own lost profits could be made up with rising internet or “online” sales has now proven to be questionable—even unlikely. Should toy manufacturers such as Hasbro consider opening their own retail store outlets to compensate?

To most toy fans and collectors, this latest news will not come as much of a surprise. In fact, current developments regarding the world’s ongoing toy retailing saga may seem all too predictable, but here we go nonetheless: It turns out, having fewer retail stores for customers to visit and browse for products (like toys) can actually be bad for business. <Wow. Who’d a thunk it?> In fact, following closely on the heels of the recent story of Toys R Us’ (TRU) filing for Chapter 11 bankruptcy protection, we now also learn that Hasbro and Mattel (both) are beginning to feel their own negative economic ripple effects—and that they believe their troubles can be laid squarely at the doorstep of TRU’s earlier woes. According to the AP:

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“Mattel, the maker of Barbie dolls and Hot Wheels cars, reported disappointing third-quarter results late Thursday and said it was hurt by Toys R Us’ Chapter 11 bankruptcy filing last month. Earlier this week, Hasbro, the maker of My Little Pony and Monopoly, also blamed weak results on the Toys R Us bankruptcy filing.

Mattel, whose revenue in North America fell 22 percent in the three months ending Sept. 30, said that about half of that decline was due to the Toys R Us bankruptcy. Globally, most of its brands saw sales declines. Barbie sales fell 7 percent and Hot Wheels fell 6 percent. Sales of its American Girl brand, whose 18-inch dolls typically cost more than $100, fell 30 percent.” —AP

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Will Matty need a handout? Looks like this company mascot is extending his hand for…what? Will his business soon seek court protection, ala Toys R Us?

Whoa. 30 percent?  That’s quite a financial nosedive. And if ever a particular toy brand needed a store’s support (i.e. an actual, physical PLACE to go to) so as to be able to SEE and HANDLE their extensive and upscale line), it’s pricey American Girl. Anyway…

Bottom Line: If TRU’s Chapter 11 reorganization and debt payoff difficulties continue, it seems likely that additional store closings and employee layoffs industry-wide could also continue. That would result in even fewer “brick-n-mortar” toy stores, less actual shelf space for toys, and then ultimately, fewer toys overall for fans and collectors to buy and enjoy. Ouch! That’s where WE feel “the pinch.” We’re not too worried about the financial stability of either Hasbro or Mattel (they’re doing just fine, thank you), but this situation is fluid and developing. Stay tuned for further intel. Read the AP story HERE.

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Barbie Suffering Same Fate as 12-inch G.I. Joes: Will Future Children No Longer Play w/ Toys?

Are we looking at a future without Barbie? A world where children no longer have the interest, desire or attention span required to keep the iconic toy line afloat? Plummeting sales at Mattel appear to bear an ill harbinger of things to come. (Photo: clayzmama)

A future without Barbie? In a world where children appear to be losing the interest and attention spans required to creatively play with dolls, how will Mattel keep its iconic toy line “alive?” (Photo: clayzmama)

The memories of playing with his GIjOE and his

The 1970s were a busy time for children fortunate enough to have grown up playing and creating adventures with GIjOEs and other imagination-dependant toys. Above, Scott McCullar (now an adult) plays with his GijOE’s “Troubleshooter” play set. (Photo: Scott McCullar)

The Future of Some Toy Lines Certainly Growing—UNcertain

If you’re an adult over say, 45, you may be a member of a dying breed. We’re not talking about your health or lifespan, we’re talking about the fact that you’re a human (man or woman) who can still remember when “childhood playtime” meant interacting with dolls, action figures and other toys. You may not realize it, but you could be a member of one of the last generations who’ll remember those youthful pursuits as the carefree activities they were and how they required one of life’s most precious gifts—imagination.

This conclusion is easily understood by simply observing the children of today’s societies and how their evolving behavior patterns have begun to affect the “bottom line” of an already struggling toy industry. Yes, it’s a different world (today) than the one you grew up in, and that reality is forcing toy giants (i.e. Hasbro and Mattel) to push for changes that will usher in a new era, one that may be largely devoid of the past’s traditional or “imagination-dependent” toys.

We're sorry, but today's largely PC-approved, non-gender specific,

We’re sorry kids, but today’s largely politically correct, non gender-specific, “discovery” type toys are, in our opinion, a poor substitute for the more creative toys of the past; specifically those from the 1950s, ’60s, ’70s and ’80s. Today’s bland, generic toy fodder, such as this “MentalBlox” game will do little to instill the sort of life-long toy memories once so common among children and adults. Today’s children are moving on to hand-held electronic devices at earlier and earlier ages which quickly stunt their desire to play with traditional, imagination-dependent toys. (Photo: discovery toys)

Robert's sons Gus (l) and Ben (r) hold up their 1st-place winning custom figure of

An exception to the rule— It’s becoming a rare sight to see children who are actively interested in 12″ GIjOEs. In this case, longtime collector Robert Browning and his two sons Gus (l) and Ben (r) keep their love of toys alive by attending conventions (such as Joelanta) together as a family. Here, the boys hold up their 1st-place winning custom figure of “The Shadow” and their prize, a Sideshow “Cobra Ninja” action figure. Such activity encourages camaraderie and the creation of life-long toy-related memories. (Photo: Mark Otnes)

Children are ChangingBuying Behavior is Changing—The Toy Industry is Changing

In the past, toy manufacturers used to be able to count on keeping a child’s interest and faithful patronage until about the age of 13 or so. Once the teenaged years kicked in, it was understood that kids began to switch over to more “grown up” interests such as sports, dating and music. While it was a shame to lose them as customers, toy companies knew there would always be more children coming along and more profits could be made from them. But now…that predictable mode of forever selling toys appears to be changing. Dramatically.

At earlier and earlier ages, children are visibly turning away from traditional toys. Once their first computer, video game system or <shudder> “smart” phone enters their lives, there’s really no looking back. In fact, the very idea of playing with traditional, non-electronic toys is becoming positively quaint to children of today (of both sexes). Even casual observations at toy shows and toy stores have confirmed they already perceive GIjOEs and Barbies as stiff, almost unrelatable artifacts of bygone age; something that their Mommy or Daddy “used to play with” very long ago, but is now—boring.

So what does all this mean? It means that now, in 2015, toy companies can no longer afford to do business as usual. New solutions to newly emerging problems must be found, before sales and stock values plummet any further. It means that once impervious toy lines of the past are now at risk of being ignored (read Derryl DePriest’s commentary on the fate of GIjOE HERE) or canceled altogether. As children continue to grow up faster and switch to non-toy pursuits at younger ages, they’re truncating a once lengthy consumer-provider relationship. Profits from toys therefore, are now harder to predict, forcing changes in marketing strategies that, while helping boost the bottom line, may actually increase the growing gap between children and traditional toys—even further.

Is there anything sadder or less interesting to young girls nowadays than a pile of pulled-apart Barbie bodies? Probably not. (Photo: buzzfeed)

Playing with Barbies— Is there anything sadder than a pile of pulled-apart Barbies or GIjOEs? Unfortunately, young boys and girls (nowadays) could probably care less. (Photo: buzzfeed)

Logo-MattelIn a stunning admission, Mattel recently disclosed that Barbie’s sales figures have fallen for the last SEVEN CONSECUTIVE QUARTERS. It’s hard to imagine how much longer the toy giant will want to support such a steadily declining “loser,” but it’s harder still to imagine a world where Barbie no longer exists—at ALL. In a recent article in the The Wall Street Journal, business analyst Cassandra Jaramillo reported:

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“Mattel Inc.’s sales of the doll fell 19% in the second quarter, as the toy maker swung to a quarterly loss and posted a 7% drop in overall net sales. The stronger U.S. dollar drove a large chunk of the decline, but Barbie’s sales would still have fallen 11% when stripping out currency swings.”

Bad news Barbie fans, but hardly a surprise to the bean counters at Mattel. The article continues:

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“Sales of the doll have dropped by DOUBLE DIGITS for seven straight quarters—underscoring the deep challenges facing new Mattel Chief Executive Christopher Sinclair as he looks to right the world’s largest toy maker by sales. Barbie is Mattel’s largest brand and a big driver of profits, but its long slump has cost it shelf space at retailers that Mattel will have to work hard to earn back.”

How long has it been since you've seen BOTH sides of the aisle in a toy store devoted solely to Barbies? The famed

Valuable Shelf Space LOST— How long has it been since you’ve seen BOTH sides of a toy store aisle devoted solely to Barbie? Those famed “Pink Aisles” are unlikely to return, and in the future, may only reside in your memory. (Photo: artisancomplete)

Currently, the profit pendulum is clearly swinging backwards in a negative arc for Mattel. Its stock value went down by 3 points and the WSJ article ended with THIS sobering total:

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“The company posted a LOSS of $11.4 million in the most recent quarter, compared with a profit of $28.3 million a year earlier.”

Toy Companies—Media Companies—Will There Be a Difference in the Future?

hasbrologonewMattel’s not the only toy giant to see one of its oldest toy lines struggle to remain relevant and profitable in this modern age. Hasbro too, now considers its once industry-leading brand, 12″ GIjOEs, to be practically null and void. Without the “little Joes” (3.75″ sized), the world’s most famous toy brand would have vanished from stores by now.

But Hasbro has demonstrated amazing vision. Anticipating the evolving market realities and changing interests of children, they’ve diligently built-up their business from its basic toy origins into a full-blown media and entertainment powerhouse; producing blockbuster brand-offshoot motion pictures such as The Legos Movie, Transformers, etc., while simultaneously working alongside other film industry giants (see HERE) to coordinate massive merchandising efforts. Despite all the vitriol many fans continue to spew in its direction, Hasbro has clearly shown them (and Mattel) that there IS a future for toy production. And while that future may not include GIjOEs or Barbies, it will certainly include profits made from toy sales—LOTS of them.

Playing with toys in the near future may look something like this. With virtual reality, the need for (and use of) real objects that you actually touch and hold would be lost, but the interaction with similar “virtual” objects would remain the same. The question is…Would you WANT to play this way? (Photo: TIME)

Move Over Traditional Toys—Virtual Reality is Here NOW

On top of everything else we’ve discussed, we’d be remiss not to mention the impending arrival of virtual reality (VR) systems. Recent breakthroughs have solved the majority of nagging technological and biological hurdles (4K resolution refresh rates, dizziness, headaches, etc.), and promises of very near future “life-like” immersion will make playing with traditional toys seem as obsolete as newsprint is to the internet. The latest TIME magazine goes into this subject in great detail (see cover above) and VR’s impact on the future of entertainment and toys promises to be profound.

You think today’s video games are addictive? With the arrival of virtual reality systems, it’s hard to imagine a future wherein children would be satisfied playing with traditional, “imagination-dependent” toys. Question: Is a “virtual” GIjOE still a GIjOE? (Photo: YOSHIKAZU TSUNO/AFP/Getty Images)

Bottom Line: We’ve discussed the topics of shifting consumer buying habits and evolving toy preferences many times over the years. The days of children playing with imagination-dependent toys may largely be behind us as a society; or at the very least, are becoming seriously endangered. The future of 12-inch Hasbro GIjOEs is already known. The future of Mattel’s 12-inch Barbies now falls into question. Fans have to wonder, what exactly will children of the future be playing with? And what effects will those toys (both traditional and virtual) have on their shrinking attention spans, imaginations and overall cognitive abilities? Will kids be jumping for joy like the dude in the TIME cover photo? Or will they be drooling over in a corner without an original thought inside their impressionable little heads? Let us know what YOU think. Please leave a comment today. Thanks!

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