Eckert expects toy industry to hold up well in recession

Mattel chief has said although he expects economy to remain tough, toys will continue to do well.
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Chief executive and chairman, Bob Eckert was speaking at Mattel’s annual analyst day presentation, where executives said the firm is on track with cost-cutting targets.

Eckert said: "As I've said before, there isn't a lot of good news out there, but the absence of new bad news is at least helping to neutralize consumer sentiment."

Chief financial officer Kevin Farr also reiterated that the top line will be pressured this year by the exchange effects of a stronger US dollar, consumer cutbacks, retailers' cuts, and a small number of blockbuster movies that can generate licensed toy ranges.

During the webcast, CFO Farr said Mattel remains on track for $90 million to $100 million in net cost savings throughout this year and $180 million to $200 million in savings by the end of 2010.

In November, the firm cut 1,000 jobs worldwide and it is taking other cost-cutting steps related to outsourcing IT services and reducing the number of items in its product line-up.

Farr said that over time, Mattel is targeting gross margins of 50 per cet as it passes along pricing better than it has in recent years and produces innovative, higher margins products.

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