What explains the fall in sales of Mattel?



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One of the largest toy manufacturers in the world is in serious trouble.

Mattel announces that he will lay off 2,200 workers worldwide, representing 22% of his workforce.

But in addition, he will close the factories that he has in Monterrey and Guadalupe, becoming like that Mexico in the most affected country in Latin America.

Among the evidence of his poor health is the drop in sales of 14% in the second quarter of this year

The company attributed the results, mainly, to the bankruptcy of Toys "R" Us, the l '. one of his main clients.

"As the industry evolves, the toy market" We are seeing a strong performance from Barbie and Hot Wheels, and we have made substantial progress in our simplification program, "said Ytel Kreiz, Director Executive of Mattel

to restore profitability . "

A plan launched by the company aims to reduce US $ 650 million in two years to improve its financial situation.

What happened to him? To be a punctual phenomenon, Mattel had to fight against all odds to go from the front.

The California company, which rejected Hasbro's bid for competitor Hasbro, was hit by competition from electronic devices and online companies like Amazon.

To win the market, he made changes to his products, such as the release of new versions of Barbie with different skin shapes and colors .

But industry badysts say the results of these strategies have been mixed.

The truth is that some of their products have more than acceptable sales, but others have much less demand.

"While Barbie and Hot Wheels experienced strong growth in the second quarter, Mattel is experiencing declines in some of its key brands, like American Girl (which has decreased by 30%) and Thomas & Friends," he said. he told the BBC. Mundo Linda Bolton Weiser, senior badyst at US consulting firm DA Davidson & Co.

In addition, amid the crisis, senior company executives have entered a sort of revolving door. Margo Georgiadis ceased to be the brand's general manager in April, after spending a little more than a year in power and despite the efforts she has made to reduce costs.

Toys and Movies

Toy manufacturers have not escaped the major changes in the industry in recent years.

According to badysts, the most difficult thing is to capture the attention of children when they spend more time playing with tablets and consoles .

Despite this, global toy sales have risen to an annual average of 3% since 2011, according to a study by consulting firm NPD Group

.

Therefore, wagering on alliances with movies and television programs has become crucial. The reason is that movie-related toys are considered a safer way to increase profitability.

Last year alone, about 30 lines of toys were made with Hollywood film licenses a figure that has grown in recent years and for which companies like Lego and Hasbro have already bet.




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