Mattel looks to movies, digital gaming and NFTs for its next leg of growth – CNBC
Mattel Barbie brand dolls are arranged for a photograph in Tiskilwa, Illinois, U.S., on Monday, April 16, 2018.
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With its toy business on better footing, Mattel said Friday it is looking to further expand its presence into other segments like consumer products, digital gaming and filmmaking.
The toymaker hopes this strategy will allow it to tap into consumers’ enthusiasm for toys like Barbie, Hot Wheels and Uno, and deliver new ways for kids and adults to experience its brands.
“The first part of the turnaround was to restore and then improve profitability,” CEO Ynon Kreiz told CNBC in an interview. “Making sure the toy company is on solid foundation and strengthen our balance sheet. This has been the focus and we’ve always said the opportunity to capture full value was mid to long term.”
On Friday, Mattel laid out this new strategy in a pretaped presentation for analysts. It is a playbook that many others in and outside of the toy industry have used — take beloved franchises and make them available to consumers across multiple segments.
This strategy has been proven effective. Providing new entertainment content — like movies, television shows or video games — keeps the brand in the cultural zeitgeist, and helps fuel sales of a variety of items, from apparel to housewares.
Take Barbie. The dolls have been on toy shelves for more than 60 years, and yet the brand posted its best full-year sales results of all time in 2021.
“In the case of Barbie, which is our best and shining case study, it’s really about the limitless potential of every girl,” Richard Dickson, president and chief operating officer at Mattel, told CNBC. “We’ve embraced that brand purpose and really marked and managed the brand to truly reflect that in everything that we do.”
Five years ago, Mattel reevaluated its Barbie brand, launching figures with more than two dozen different ethnicities and with a wider range of body types. At the same time it introduced new lines of Barbie dolls that celebrated real women like actress Zendaya, animal activist Bindi Irwin and dancer Misty Copeland as well as offered more career paths in areas like science, politics and business.
“Evolution makes a brand relevant, but purpose makes a brand immortal,” Dickson said.
More than just toys
Mattel seeks to continue innovating the Barbie brand by producing a live-action film starring Margot Robbie and helmed by Greta Gerwig. It also will continue to release animated Barbie specials and bring new, nontoy merchandise to stores and the digital realm.
It is a strategy rival Hasbro knows well, and one it has recently come under fire for employing.
Activist investor Alta Fox Capital Management, which owns a 2.5% stake in Hasbro, nominated five directors to Hasbro’s board and penned a letter to shareholders, which was distributed Thursday, urging Hasbro to spin off Wizards of the Coast and digital gaming, its fastest-growing segment, and asking the company to reevaluate its strategy of using entertainment to drive toys sales.
Notably, Hasbro owns and operates a studio and invests significantly in its entertainment productions. This is different from Mattel’s model of utilizing third-party studios and distributors to create content, but minimize financial risk.
Hasbro has balked at the notion that its current strategy is not working and, so too, have analysts. Also having the Wizards unit, which includes brands like Dungeons & Dragons and Magic: The …….