TOY INDUSTRY Freshen up Barbie? Mattel looks ahead

Mattel's stock price has been bouncing back after a big fall.
LOS ANGELES TIMES
LOS ANGELES -- Amid much fanfare, 48-year-old Barbie this month will get a new attitude.
For nearly a decade, the pressure has been on Mattel Inc. to revise, redesign and re-engineer the ol' girl and the rest of the company built around those tiny, made-for-high-heels feet.
Over the years, the company has tried dozens of small changes and a few big ones. There was the reduction in bust size, a gritty new urban look with a reduction in skirt length, and, of course, there was the big breakup with longtime paramour Ken.
On Thursday, the world's largest toy maker will unveil Barbie Girls, its first big new Barbie concept in four years. The company is quick to point out that this is just a new product and not a wholesale reinvention of the Barbie line.
"I think as a business there are things we can do to rebuild and help grow the doll business," said Chief Executive Robert Eckert, who joined Mattel in 2001 to boost the company's flagging fortunes.
"We're going to be announcing some new things within the next couple of weeks that I think will add some excitement to the doll business," he told financial analysts last week. "
Whatever happens, it doesn't seem likely to be either the key to overwhelming success for El Segundo, Calif.-based Mattel or a nail in the coffin, analysts say. And that's the way they like it. After all, Mattel's stock has surged 72 percent in the last 12 months without a dramatically new Barbie product.
Few details
Details of the long-awaited Barbie Girls, which will be introduced in New York, have been kept under tight wraps. The company has said only that the toy blends fashion doll play, the Internet and music.
Barbie is still the nation's No. 1 fashion doll. But the brand has suffered at the hands of the edgier Bratz dolls from MGA Entertainment Inc.
Last year, Barbie seemed poised for new success, with four consecutive quarters of modest domestic sales growth and the first annual sales gain since 2003.
But recently the toy maker said sales of Barbie and related products in the United States fell 21 percent in the first three months of the year.
Even so, the doll and related products -- the company's biggest line -- posted a 2-percent gain overall because international sales grew 20 percent, Mattel said.
Although sales of Barbie faltered, Wall Street hardly blinked.
Sales of toys from the movie "Cars" and the latest Tickle Me Elmo doll helped drive sales across the company up 10 percent, its biggest quarterly gain in eight years.
The company's profit fell 60 percent in the first quarter to 12 million because of a large one-time gain last year from a foreign tax settlement, Mattel said.
The first quarter also is considered the least important for toy companies, whose business is weighted toward the holiday season.
Eyeing potential
Analysts are now gauging the new Barbie product's potential.
"If this thing hits way above average, it could be a big deal, and the margin on this kind of revenue source could be enormous," said Sean McGowan, an analyst with Wedbush Morgan Securities in New York.
"If it's a complete miss, it's a negative surprise. But like everything else that they're trying, there's a reasonable middle ground between success and failure that won't really affect them one way or another."
Mattel's stock price of about 28 is far off the heady days of the late 1990s, when sales of Barbie soared to nearly 2 billion and shares in June 1998 hit 43.11. Although the company no longer provides Barbie sales figures, it has since then reported almost continuous declines.
But today's share price is also far removed from the dark days of 2000, when the stock plummeted to just more than 10 as cracks began appearing in Barbie's dominance and the company reeled from the disastrous, 3.6-billion acquisition of software maker Learning Co.