Spotted Online – The Economist on Hasbro and Mattel’s Decline

This article at The Economist dives into the question of why Hasbro and Mattel are both suffering a downturn these days. According to the article, “Hasbro’s year-on-year operating profit was down 11% in the last quarter and Mattel’s net income fell 24%. Sales of Barbie, a Mattel property, plunged for the fourth quarter running, this time by 12%.” This is troubling, but the article discusses Hasbro’s strategy of expanding beyond toys — I suggest reading the Hasbro Company Profile for more on their expansion into new media and licensing — and suggests that changing focus from boys’ toys to toys for girls could also help reverse the decline.

Another point the article makes is that Hasbro and Mattel could improve sales by targeting a new demographic. The article plays directly to adult toy collectors with:

“In Japan over 20-year-olds made up 23% of total sales in 2011. But only 3.5% of American toy buyers were buying for themselves last year. There is untapped potential here.”

So between a change in focus, expanding out with new media projects, and catering to adult collectors there’s a chance Hasbro and Mattel could both recover. I am sure they will bounce back in the long run — the idea of either company continuing to suffer a slump is difficult for me to accept — but what happens over the next twelve to eighteen months should be interesting to watch.

Thank you to Monica Valentinelli for directing me to the article. I’m always ready to read more about toys!