Mattel CEO Margo Georgiadis has hinted at a ‘reinvention’ of the business in order to get the global toy maker back on track.
Georgiadis told investors that the firm behind the likes of Barbie and Fisher-Price will ‘get back on track’ by placing firmer bets on emerging markets, a faster pace of toy development and by focusing more on digital play experiences.
“It is time to reinvent this company because of where the world is headed,” Georgiadis told Fortune in an interview ahead of the firm’s investor day presentation.
“As an industry, we are all challenged to do things differently.”
Over the past three years, sales have slipped from $6.5 billion to $5.5 billion with Mattel’s shares shedding 28 per cent of their value. Meanwhile, Hasbro has gained 29 per cent over the same period and, having reported record-breaking sales earlier this year, is now worth nearly $6 billion more than Mattel.
Georgiadis told investors that the firm now faces some “tough decisions” as she works to transform the company, while admitting that revitalisation plans for big brands such as Thomas, American Girl and Mega Bloks could take longer than expected.
However, the CEO has explained that the firm’s business in China could be as much as four times the current size, citing data that shows 210 million children reside in the Asian nation, but average toy spending is just one ninth of that of the US.
While the global toy market is expected to grow by $20 billion over the next four years, emerging markets are expected to power two thirds of it sales increases. Mattel will now look to tap into these markets in its turnaround plans.
The company will also look to develop toys and content more aligned with the increasingly digital world.
“Toy time is holding steady, but kids are spending more time on digital and toys need to adapt,” said Georgiadis.
Hot Wheels will be a key focus for the firm moving forwards, with the potential to link the brand to education.
"Our vision is to inspire the wonder of childhood as the global leader in learning and development through play," said Georgiadis. "As we shift our business aggressively in a new strategic direction and transform how we operate, I believe we have the assets to achieve this vision and shape the future of the toy industry."
"The strength of the underlying Mattel franchise supported by important trends such as a growing global toy market and an increasingly digital, mobile-first world provides an opportunity for Mattel to create significant long-term value for our investors."