-+undefined NaN%
-+undefined NaN%
-+undefined NaN%

Disney Princesses Return to Mattel as Barbie Maker's Turnaround Ambitions Grow

The Wall Street Journal · 01/07/2023 05:30

By Robbie Whelan | Photographs by Michelle Groskopf for The Wall Street Journal

At the toy manufacturer Mattel Inc., Disney's princesses aren't damsels in distress. They are saving the day.

Nearly a decade after losing the Walt Disney Co.'s princess doll license to rival Hasbro Inc., Mattel is back to making and selling the doll versions of some of Disney's iconic characters.

Executives at Mattel say the comeback caps a turnaround effort following years of financial distress and creative doldrums. Its new line of princess dolls, representing 17 different Disney characters, including Cinderella, Moana, and Anna and Elsa of "Frozen," are hitting shelves this weekend.

Behind the return of the princesses is a broader effort to revive the design mojo at the company best known for making Barbie and Hot Wheels. Designers are launching new toy lines, working with fine-art creators, remaking classic characters and broadening where its toy brands appear, including the creation of big-budget films and live events , all geared toward clawing back market share and widening the long-term appeal of its toy catalog.

The changes, spurred in part by Chairman and Chief Executive Officer Ynon Kreiz's corporate restructuring, are beginning to show up in Mattel's financials. Net sales have risen every year since Mr. Kreiz -- a former television-studio executive who briefly worked for Disney -- took over as CEO in 2018.

The company's annual operating income has swung from a loss of $343 million in 2017 to a $730 million profit in 2021. It has been profitable in each of the first three quarters of 2022.

Only a few years ago, the gloom hanging over the nearly 80-year-old company was palpable, Mr. Kreiz says.

"You would come into this building and you wouldn't think it was a toy company," Mr. Kreiz says, sitting in his corner office at Mattel's El Segundo, Calif., headquarters. "It felt like an insurance company in the Midwest."

In 2014, Mattel lost the Disney princess contract shortly after launching a toy line called Ever After High, which included public-domain versions of princess dolls that overlapped with Disney's characters, including Cinderella and Snow White. Hasbro started selling Disney's princess dolls in 2016.

Losing the Disney princess contract was a slap in the face for Mattel, multiple employees say. The company had a 70-year relationship with Disney that started with advertisements for Mattel toys on the "The Mickey Mouse Club" television show in the 1950s.

"When we lost Disney Princess, there was a fixation on the numbers -- the culture was being driven by spreadsheets and checklists and how to grow through cost-cutting," says Ted Wu, head of design for Mattel's vehicle-based toy division, which includes Hot Wheels and Matchbox cars. "We weren't really asking ourselves, 'Are we making good toys?'"

In the past few years, Mr. Wu's team has designed and launched a new line of monster trucks and collapsible race tracks for Hot Wheels cars, and gone deeper into radio-controlled toy vehicles, a segment where Mattel had little presence before.

During the yearslong Disney drought, Mattel's share price plummeted and sales fell by 25%. Three CEOs came and went. When Mr. Kreiz took charge in April 2018, he closed factories and swiftly cut staff from 13,500 to 8,500.

He reorganized Mattel's creative divisions. Instead of keeping brands in silos including Barbie, Fisher-Price and American Girl, the company is now organized into teams that design dolls, vehicles and toys for young children, allowing designers to share ideas more easily.

Mr. Kreiz still faces an uphill battle to reach the more than $6 billion in annual sales that the company regularly achieved in the early part of the prior decade, and the company's share price is hovering around $20, less than half the highs it reached in 2013 before it lost the Disney contract.

For the new line of Disney princess dolls, Mattel experimented with facial design. Designers digitally sculpted features and hand-painted faces on prototypes that were based on the characters' appearance in films. They incorporated new knitted fibers for a more diverse array of hair types. The goal was to make the designs less lifelike and more closely resemble how children say the characters should look, based on feedback from focus groups, says Chris Down, Mattel's chief design officer, a C-suite position that was created as part of Mr. Kreiz's 2018 restructuring.

A number of the new doll sets come in cardboard packaging that can be cut out and folded into background objects, such as the shell throne from "The Little Mermaid," which Mr. Down says enriches play scenarios for children.

"This is one of the crown jewels of the toy business," Mr. Down says. "When we won it back, it was a huge triumph. People were crying around here."

Disney declined to comment.

Designers are now encouraged to participate in periodic "Big Ideas" showcases, in which employees can pitch an idea for a new toy or feature with the potential that it might end up in front of senior executives at the company. In the past few years, Barbie's "color reveal" dolls, which change from a "mystery pink" hue to a surprise color palette when submerged in water, came out of this process.

Over the past two years, Chief Operating Officer Richard Dickson, an art collector and former fashion executive, launched Mattel Creations, which makes higher-price, limited-edition collectors' versions of toys from the Barbie, Masters of the Universe and other product lines, often collaborating with artists such as the pop surrealist Mark Ryden and the Japanese contemporary artist Takashi Murakami.

Shortly after becoming CEO, Mr. Kreiz hired Robbie Brenner, the producer behind the Oscar-nominated film "Dallas Buyers Club" to helm the company's new film unit, Mattel Films. The company is making a push to produce hit films tied to its toy brands. Mr. Kreiz in the early 2000s helped launch the Fox Kids Europe TV network and later led Maker Studios, an online production company that was sold to Disney.

Mattel has produced cartoons based on American Girl dolls and Hot Wheels toy cars before, but lagged behind Hasbro and Lego A/S, which have had success with such movies as "Transformers" and "Lego Batman." Mattel now has 15 feature films in some stage of development, including a "Barbie" movie co-written and directed by the indie film star Greta Gerwig, slated for release this summer.

"We've shifted from being a toy company that is manufacturing items to an intellectual- property company that is managing franchises," Mr. Kreiz says.

Write to Robbie Whelan at robbie.whelan@wsj.com

(END) Dow Jones Newswires

January 07, 2023 05:30 ET (10:30 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.