It’s good news for Mattel’s toy industry that the company announced Friday that it’s expanding into new areas like consumer goods, digital gaming, and filmmaking.
Consumers’ enthusiasm for toys like Barbie, Hot Wheels, and Uno will be used by the toymaker with this strategy, which the company thinks will provide new opportunities for kids and adults to interact with its brands.
Digital Gaming and NFTs
According to CEO Ynon Kreiz, the first step in the turnaround process was to restore and then improve profitability. Assuring the stability of the toy firm and enhancing our financial position. “This has been the goal, and we’ve always indicated the potential to capture full value was mid to long term.”
During a pre-recorded presentation for analysts on Friday, Mattel unveiled this new plan. Playbooks like these have been employed by a wide range of businesses in and outside of the toy sector, making popular franchises more accessible to a wider audience.
This approach has been shown to work. Entertainment material such as television series and video games helps keep the brand relevant in today’s cultural landscape and boosts sales of everything from clothing to household goods.
Barbie is yours to have. It has been more than 60 years since the dolls first appeared on toy stores, but the brand had its highest full-year sales figures ever in 2021.
“In the case of Barbie, which is our greatest and shining case study, it’s truly about the infinite potential of every girl,” Richard Dickson, president and chief operating officer of Mattel, told CNBC. In all we do, we’ve embraced that brand purpose and marked and managed the brand as if it were our own.
With more than two dozen distinct races and a broader range of body types, Mattel reevaluated its Barbie line five years ago. This new Barbie collection featured real-life women like actress Zendaya, wildlife activist Bindi Irwin and dancer Misty Copeland, as well as more profession options in fields like science and politics.
Dickson remarked, “Evolution makes a brand current but purpose makes a brand timeless.”
Mattel hopes that a live-action film starring Margot Robbie and directed by Greta Gerwig will help the Barbie brand stay fresh in the marketplace. Animated Barbie specials and new, non-toy goods will also continue to be released.
Mattel Looks to Movies In NFT
In recent weeks, Hasbro has come under fire for utilising a technique that its rivals are well aware of. Shareholders of Hasbro were sent a letter from activist investor Alta Fox Capital Management, which owns a 2.5 percent stake, urging the company to spin off Wizards of the Coast and its fastest-growing segment, digital gaming, and to reevaluate its strategy of using entertainment to drive toys sales.
It’s worth noting that Hasbro has its own studio and makes a big investment in its entertainment endeavours. In contrast to Mattel’s model, which relies on third-party studios and distributors to develop content and reduce financial risk, this approach creates its own content.
Analysts and Hasbro have both rejected the idea that the company’s present approach isn’t working. When Mattel nabbed the Disney princess licence from Hasbro, Hasbro could use the Wizards unit—which includes brands like Dungeons & Dragons and Magic: The Gathering—to help weather the storm.
It was only recently that Mattel was able to recover from the loss of this licence in 2016, which left a massive hole in the company’s commercial portfolio.
As of this writing, investors appear to be on board with Mattel’s business plan as it stands. As of this writing, the company’s stock is up more than 15 percent this year. A 52-week high of $25.71 was reached on Thursday, while shares fell less than 1% on Friday.
According to FactSet, Mattel’s stock has an average target price of $30.96, which is nearly a 24% increase from where it is now trading. D.A. Davidson analyst Linda Bolton Weiser is even more upbeat. There is a lot of room for growth in the future, therefore she raised her price target from $38 to $45 on Monday.