After a disastrous spring, Mattel mentioned it might minimize practically 1 / 4 of its employees and promote a few of its factories.
Mattel blamed the Toys “R” Us chapter for the majority of its issues. When the toy retailer mega-chain stopped shopping for new toys, Mattel misplaced its most vital conduit to prospects.
Gross sales fell 11% between April and June. Income would have been near flat, although nonetheless down, if Toys “R” Us hadn’t gone bankrupt, Mattel mentioned.
Brilliant spots had been few: Barbie gross sales grew 12%, and Sizzling Wheels gross sales had been up 21%. Enchantimals and “Jurassic World” toys bought properly too. That is about it.
Gross sales of “Automobiles” film themed toys, Fisher-Value, Thomas & Pals and Toy Field toys had been notably terrible final quarter. American Lady doll gross sales tumbled 32%. “Monster Excessive” and “Mega” toys stunk too.
As if that weren’t dangerous sufficient, Mattel needed to compete with greater supplies prices as the value of oil and different commodities soared. Gross sales in China fell because the financial system slowed. So Mattel’s revenue margin fell sharply from 41% to 30%.
To save cash and refocus the corporate on what’s working, Mattel mentioned Wednesday that it is firing greater than 2,200 staff, or 22% of its workforce. It mentioned it might shut all of its factories in Mexico.
The overwhelming majority of the layoffs are back-office and help roles, the corporate mentioned. On a convention name with analysts, Mattel CEO Ynon Kreiz mentioned the corporate carried out a complete “bottom-up overview” to protect the corporate’s sales-generating and inventive capabilities. He mentioned he hopes the corporate can realign assets towards high-performing toys, enhancing on-line gross sales and growing higher toy franchises for the longer term.
“We see a variety of alternatives, however there was a giant discrepancy between our monetary efficiency over the previous couple of years and the place the corporate must be,” Kriez mentioned.
Kreiz was named chief government in April. He took over for Margo Georgiadis, who held the highest spot on the struggling toymaker for simply over a 12 months.
The corporate has lengthy been rumored to be a Hasbro takeover goal. Hasbro is the a lot more healthy of America’s two main toy manufacturers.
Mattel’s ( inventory fell 9% in after-hours buying and selling. )
CNNMoney (New York) First revealed July 25, 2018: four:39 PM ET