Shop Talk

from Summit Notebook:

Barbie does Beijing: The adventures of a Malibu girl in China

Modern day national influence, some smart people like to argue, spreads through the "soft power" of brand appeal and attraction rather than the "hard power" of coercion. In China, one avatar of U.S.  soft power tends to be trim and busty, and come with blue eyes and a long mane of blonde hair. Her name is Barbie, she is made of plastic, she was born in Malibu and Chinese girls want to be like her.

Barbie comes in all sorts of versions, according to the man who introduces her to her foreign friends, Mattel's international president, Bryan Stockton. Still, in China, the No. 1-selling Barbie doll is the sunny surfer girl who cruised across the Pacific from southern California to bring millions of young Chinese girls a new vision of the world, not to mention themselves.

"The challenge (in China) is to have toys become a part of the culture," Stockton said at the Reuters Consumer and Retail Summit on Monday. "We're trying to get our toys to be a part of a child's development. ... In Chinese culture it's very important to help girls think they can aspire to be something. ... Barbie is a western icon and she's an American icon, and Barbie is from Malibu, California."

"Now," Stockton said, "Barbie is a part of Chinese educational culture and Chinese pop culture."

It's important to remember, however, that it's not about seeing yourself in Barbie's physical manifestation here on earth. As Stockton said:

"In reality, Barbie is a toy. Barbie is for aspiration. ... Barbie doesn't represent anything concrete. Barbie is a plastic doll, so what we try to concentrate on is all the things Barbie provides for girls... She's a great thing for girls. She's done a lot of wonderful things for girls, and so we're going to continue to emphasize the positive."

Wish they all could be California girls? Wish no longer.

Check Out Line: A quarterly update from toyland

Check out Mattel reporting a smaller-than-expected decline in third-quarter revenue as the toymaker sees gains in its Hot Wheels and American Girl brands.

Profit fell to $229.8 million, or 63 cents a share, from $238.1 million, or 65 cents a share, a year earlier.  Net sales fell 8 percent to $1.79 billion.  Analysts expected revenue of $1.78 billion.

Chief Executive Robert Eckert said Mattel’s revenue was still under pressure due to the weak economy, a move by retailers to tightly manage inventory and a dearth of toy lines tied to movies and other entertainment.

“That said, we are continuing to make strong progress on reducing costs, rebuilding margins and generating strong cash flow,” he said in a statement.

Mattel and rival Hasbro are facing another tough holiday as key retailers Wal-Mart and Target have already begun offering steep discounts on their products to woo shoppers.

After a bruising holiday season in 2008, toy companies are making fewer and more affordable products, such as those that cost less than $30. Mattel’s Barbie “Fashionista” doll is expected to be a hot seller this holiday.  It sells for $11.99 at Toys R Us.

Hasbro will report earnings on Monday morning.

Check Out Line: Cost cuts in toy land

Check out the quarterly profit from Mattel.

The world’s top toymaker posted a higher-than-expected quarterly profit but it wasn’t driven by consumers clamoring for its toys.

Instead, it cut costs to make up for a dearth of toys based on summer movies and the impact of foreign exchange.

Profit for Mattel, the owner of Hot Wheels and Barbie, rose to $21.5 million, or 6 cents a share, in the second quarter from $11.8 million, or 3 cents a share, a year earlier.

But sales fell 19 percent to $898.2 million. The impact of currency exchange rates accounted for 5 percentage points of the decline.

Worldwide Barbie sales fell 15 percent, hurt mostly by lower overseas sales.

While both Mattel and rival Hasbro are battling lower demand in the recession, Hasbro is ahead in the movie-based segment this year with toys linked to summer films such as “Transformers – Revenge of the Fallen” and “G.I. Joe – The Rise of the Cobra.”

Check Out Line: Losses in toyland

Check Out the losses at Mattel, the world’s biggest toy company.

The maker of Barbie said its first-quarter loss widened and CEO Robert Eckert said Mattel would keep controlling costs as tough market conditions test the resilience of toy companies.

But one area where Mattel has not scrimped is on its worldwide campaign to spotlight Barbie, its 50-year-old flagship doll, which has suffered months of weak sales as children’s taste in toys change. 

Those steps included a fashion show in New York, unveiling a six-story flagship store in Shanghai, a party in Malibu, California, and selling special designs of Barbie dolls.

Its efforts seem to be reaping some early benefits. 

Worldwide Barbie sales fell 5 percent in the first quarter, less than its overall sales decline, while sales increased in the double digit range in the domestic market. 

“Clearly, retailers have made room for Barbie in an otherwise difficult environment,” Wedbush Morgan Securities analyst Chris White said.  “Retailers have been persuaded that Barbie looks good enough to take a chance on.”

Check Out Line: Maybe Mattel should try “Cry-For-Me Elmo”

Check out the Island of Misfit Toy Earnings.   Mattel bumped along like a train with square wheels in the fourth quarter, posting a 46 percent drop in earnings for the quarter that includes the key holiday selling season.   Sales fell 11 percent, a particularly bad sign given the idea that parents would sacrifice shopping for themselves in order to buy toys for their children during the holidays.   Granted, part of the sales decline was due to the rising dollar, which hurts the value of sales outside the United States.   But U.S. sales also fell 6 percent. And Barbie is really sagging, with a 21 percent drop in sales. Maybe her age is showing. She does hit 50 this year.   “Our business wasn’t immune from the deteriorating economic environment of 2008,” CEO Robert Eckert said in a statement.   Rival toymaker Hasbro will report next week. But at least it has that Monopoly money to cover any shortfalls.   Also in the basket:     Bharti Wal-Mart picks name for cash-and-carry stores   Tough times for luxury watches (WWD, subscription required)

(Photo: Reuters)

Mattel launches My Meebas as Barbie stumbles

What would Mattel wish for if it had one wish to make? The launch of the toy giant’s “My Meebas” points to one possibility — better fortunes for its girl’s toy business, as Barbie sales continue to face trouble.

Mattel launched “My Meebas” — a toy for girls aged 6 to 12 that houses a plush “Meeba” in a plastic tube, which serves as a gaming device with a movable LCD screen.

The toy is aimed at the latest generation of girls, who like plush toys but are also into electronic games, Mattel said. The launch comes at a time when Mattel is struggling to revive sales in its girl’s division, best known for its iconic Barbie dolls. Sales of Barbie have suffered in past quarters, as other toys such as “Hannah Montana” and Bratz steal market share. 

The “Meebas”, also made in China like many other toys, will retail for $19.99, while a Barbie “Top Model” doll can be bought for $14.97 at Wal-Mart. The toys have gone through extensive checks, Mattel said, following the spate of recalls last year.

With a “Meeba,” the idea is for a user to buy the toy as they make a wish, and then go through seven levels of game play, or over 20 activities, which could take anywhere from seven to 12 hours, according to Mattel. 

The LCD screen can be moved up and down the side of the tube, showing how the “Meeba” grows as game progresses.

Once all activities are completed, the tube pops open, and the user can pull out their ”Meeba” — in a sign meant to signify that the user’s wish has finally been granted.

Check Out Line: Toyland bottomline

Check out earnings in toyland… for one company at least.   Hasbro posted a better-than- expected first-quarter profit on Monday, with sales rising 13 percent. Meanwhile, Mattel had a loss in the first quarter , hurt by legal expenses, higher costs and lower sales of its Fisher-Price products.   Oh, and Barbie is sagging too, with that Mattel doll line posting  12 percent drop in sales in the United States.   Now, it’s hard to draw a lot from the first quarter in the toy business. After the holiday season, many people often take a break from buying toys.   But Hasbro had success with its Transformers and Littlest Pet Shop lines.   Mattel is hoping price increases in June will help offset rising costs.   Meanwhile, the competition really heats up again in coming months as the summer movie season hits. Will “Speed Racer” and “Batman: The Dark Knight” win the day for Mattel over Hasbro-linked “Iron Man” and “Indiana Jones and the Kingdom of the Crystal Skull?”   At Mattel, they have to be singing “Go Speed Racer, go!”   Also in the basket:   Reversing Field, Macy’s Goes Local (WSJ)   Weak dollar takes toll on European beauty exports (WWD)