Troubled Mattel Parts Ways with CEO After Only a Year
Margo Georgiadis was hired to pull Mattel out of a steep nosedive. The toy company was in a freefall, sales plummeting with no end in sight. That was roughly a year ago, and now Georgiadis has announced plans to step down, effective April 25, the day before Mattel will report quarterly numbers.
The official announcement says Georgiadis is leaving for a job “in the tech industry” and that she will remain with the company in an advisory role at least until May. When Georgiadis officially leaves, she will be replaced as CEO by Mattel director, Ynon Kreiz.
Some industry watchers believe Kreiz was tapped because Kreiz is in favor of a merger with another struggling toy company, Hasbro. The idea of a merger has been rumored since both companies came out of a dismal 2017 without much to look forward to in 2018. Then it was announced that Toys R Us would be shutting its doors, leaving both companies without a major sales and distribution engine.
That’s not to say a merger will save either company. Toy companies are struggling to compete with technology, especially games on mobile devices, as well as major pushes by Walmart and Target and, of course, online sales. While many consumers will go looking for branded toys on Amazon, companies like Hasbro and Mattel depend on the shelf displays to entice kids and promote impulse buys, something that may be less likely now that the shelf space is disappearing.
Regardless of who is at the helm of the ship, both Hasbro and Mattel have to find a way to create sales in a market that has largely left their time-tested business model in the dust.
And traditional brands will not help them. One of the biggest reasons Mattel is struggling has to do with lack of demand from formerly cash cows like Hot Wheels and Barbie. Sales of these toys, which entertained generations of American kids, have fallen drastically, along with Fisher-Price and American Girl branded toys. These are some of Mattel’s top brands, and they’re just not selling nearly as well as they once did.
At this point, the only line of business that’s really working for Mattel is licensing. The company owns licensing contracts with Disney, giving it rights to make and sell Disney Princess toys, as well as action figures and accessories tied to Marvel and Star Wars. These brands alone, though, can’t help the company balance out, though, so Kreiz has a lot of work to do … most of it the same work Georgiadis had in front of her a year ago.
Ronn Torossian is a public relations and business professional with over 20 years of experience