After five straight quarters of disappointing sales and a holiday season unworthy of celebration, Bryan G. Stockton resigned from his post as chairman and CEO at Mattel on Monday. Christopher A. Sinclair, who has been on the company’s board of directors since 1996, was named the company’s chairman and interim CEO.
“We are not happy with our financial results for the quarter. They’re not meeting our expectations,” said Alex Clark, a Mattel spokesman. “Our board felt a leadership change is appropriate at this time.”
East Aurora-based Fisher-Price, which is a wholly owned subsidiary of Mattel, declined to comment on the leadership shake-up, but Clark said the change would not affect Fisher-Price any more than any of the company’s other brands. “Fisher-Price is one of our most important and one of our oldest brands,” Clark said. “It’s clearly beloved by kids and parents around the world.”
That may be true, but Mattel Chief Brands Officer Richard Dickson acknowledged last fall that Fisher-Price is also the company’s “most challenging” brand.
“What was a simple business a few years ago is today quite complex,” Dickson said in an October address to analysts. “It’s my sense that well-intentioned but largely reactive changes to the brand haven’t gone far enough or resonated with our customers.”
Those failures led to inconsistent results among Fisher-Price products, he said.
To address it, Mattel outlined a plan to reignite momentum among all of its brands, including Fisher-Price, and to invest more money in product development, technology and marketing.
Digital platforms and social media, while giving the company more opportunity to connect with customers, also compete for those customers’ time and attention. To better maintain the company’s connection with consumers, it vowed to better integrate current technology and trends into its product offerings, and to focus on product innovation.
Fisher-Price’s Laugh & Learn line of toys, for example, now features Smart Stages technology – adaptive learning content that can be advanced as a baby develops. The company has also focused on mobile connectivity in its line of baby items, introducing Smart Connect Bluetooth technology into products, such as a baby swing that can be controlled with a smartphone app.
The company aggressively went after its millennial and global customers by giving its baby items a more modern look and launching an online advertising campaign with Latina singing star Shakira.
The company also has plans to maximize the properties that it acquired when it bought HIT entertainment, including Thomas & Friends, Angelina Ballerina, Bob the Builder and Barney. A Thomas Land theme park is to open in Massachusetts this summer.
Despite Stockton’s departure, Mattel said that it will follow through with those plans. “We’re confident it’s still the right plan,” Clark said. “It’s obviously going to take time, but we’re very focused on executing it with an even greater sense of urgency now.”
Mattel, based in El Segundo, Calif., has been struggling with sluggish sales of Barbie and Fisher-Price products that have been impeded by children’s spending more time playing on electronic devices.
As Barbie’s cultural relevance has dimmed, one of the company’s brighter spots has been sales of Disney “Frozen” dolls. Unfortunately for Mattel, it will lose its license to produce those wildly popular dolls to Hasbro next year.
Mattel shares have dropped by 9.4 percent this year through the end of last week, and fell by $1.40, or 4.9 percent, to $26.64 on Monday. Mattel was scheduled to report results on Jan. 30, making Stockton’s ouster look like a swift decision by the board, according to Jaime M. Katz, an analyst at Morningstar in Chicago. Directors were probably getting pressured by investors to make a change and another lackluster quarter sealed Stockton’s fate, she said.
In a preliminary report of results, the company said earnings in the last quarter amounted to 52 cents per share, excluding some items. Analysts had projected 91 cents on average, according to data compiled by Bloomberg. Sales fell by 6 percent, to $1.99 billion, in the period.
“Mattel is an exceptional company with a great future, but the board believes that it is the right time for new leadership to maximize its potential,” Sinclair said in a statement Monday. “We will be working during the coming months to revitalize the business and to identify the right leadership for Mattel.”
Bloomberg News contributed to this report. email: firstname.lastname@example.org