Mattel, Inc. is a worldwide leader in the design, manufacture and marketing of family products. With headquarters in El Segundo, a city adjacent to Los Angeles, California, Mattel has offices and facilities in 36 countries and markets its products in more than 150 nations throughout the world. The company employs approximately 31,000 people worldwide and has annual revenues of $5.5 billion.
The company traces its beginnings to 1945, when a fledgling Mattel began operating out of a garage workshop. The original founders were Harold Matson and Elliot Handler, who coined "Mattel" by combining letters of their last and first names, respectively. The first Mattel product was picture frames, but Elliot soon developed a side business in doll house furniture made from picture frame scraps -- which led to an emphasis on toys.
Matson soon sold out to his partner, and Elliot and his wife, Ruth, steadily expanded Mattel’s product line. Encouraged by the success of the doll furniture, they turned the company’s emphasis to toys. The Uke-A-Doodle, a child-size ukulele, was the first in a line of musical toys.
A hand-crank, patented music box gave Mattel its first "staple" business, and versions of this product helped generate much of the company’s revenue in the ’50s and ’60s. In 1955, Mattel also introduced another highly successful product, the Burp Gun, an automatic cap gun based on a patented mechanism.
Also in 1955 came another, even more important turning point for Mattel. In a move that would eventually revolutionize the way toys were marketed, the Handlers bought 52 weeks of advertising on the new "Mickey Mouse Club" television show, marking the first time toys had been advertised on a year-round basis. In conjunction with the company’s sponsorship of the show, Mattel introduced a child-size "Mouseguitar," which became an instant sensation in the industry.
Mattel followed its musical toy success with a line of replica rifles and guns that reflected the 1950s popularity of Western-themed television shows like "Bonanza" and "Gunsmoke."
In 1959, Mattel introduced the product that would lead it into the forefront of the toy industry and fascinate generations of young girls. Inspired by her daughter’s fascination with cutout adult paper dolls, Ruth Handler suggested making a three-dimensional doll through which little girls could act out their dreams. She named the doll "Barbie," which was the nickname of her real-life daughter.
The first Barbie doll sported a ponytail hairstyle, black and white zebra-striped bathing suit, open-toed shoes, sunglasses and earrings. A line of fashions and accessories was also available. Buyers at the industry’s annual Toy Fair in New York were not impressed, but little girls certainly were and the Barbie doll took retailers by storm. Mattel was so swamped with orders that it took several years for supply to catch up with demand.
The Barbie doll was introduced as a teenage fashion model, but in the years that followed she has taken on many aspirational roles. She has tackled almost every conceivable profession, including dentist, doctor, firefighter, astronaut, paleontologist -- even Presidential candidate.
The Barbie doll has been joined by friends and family over the years, including the Ken doll -- named for the Handlers’ son -- in 1961, Midge in 1963, Skipper in 1965 and Christie -- an African-American doll and the first of many ethnic friends -- in 1968. In 1995, the Barbie doll gained a little sister, Baby Sister Kelly, and, in 1997, a disabled friend in a wheelchair, Share a Smile Becky. 1999 not only saw the introduction of Baby Sister Chrissy to the Barbie family, but it was also the 40th anniversary of the doll’s introduction.
The Barbie doll’s 40th Anniversary celebration recognized special women of achievement (Ambassadors of Dreams), including Ruth Handler (creator of the Barbie doll); Muriel Siebert (the first woman to buy a seat on the New York Stock Exchange); Rosie O’Donnell (Emmy-award winning talk show host); Anne Moore (president of People Magazine); Dr. Sylvia Earle (renowned marine biologist); Jackie Joyner-Kersee (one of the greatest female athletes in the world); Katrina Garnett (technology entrepreneur); Vera Wang (leading fashion designer), and Geraldine Laybourne (top entertainment executive). The brand also partnered with Girls Incorporated to provide ongoing tools to support girls as they endeavor to pursue their goals.
Approximately one billion Barbie dolls have been sold in four decades, making her the best-selling fashion doll in almost every major global market, with worldwide annual sales of $1.5 billion.
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The early ’60s also saw Mattel entering the worldwide toy market. The Barbie doll and other products were first test-marketed overseas in 1963, and were received so favorably that many products began to be manufactured under licensing agreements arranged by the company in England, France, Germany, South Africa, Italy and Mexico. In 1964, a wholly-owned subsidiary, Mattel S.A., opened its first sales office in Switzerland as a headquarters for the company’s worldwide marketing program.
During the ’60s, the company created some of its most successful early products, including Thingmaker (featuring Creepy Crawlers) and two classic talking toys, Chatty Cathy and See ’N Say. In 1968, Mattel introduced Hot Wheels miniature vehicles, another landmark product that helped the company reach out and capture boys’ imaginations the way the Barbie doll did for girls. In 1998, Hot Wheels celebrated its 30th anniversary and reached a milestone when the two-billionth car was produced. That makes Mattel the producer of more vehicles than Detroit’s big three car manufacturers combined.
By the early ’70s, Mattel was generating $300 million in annual revenues. During this time period, the company began to diversify, acquiring a number of non-toy companies. These included Ringling Brothers And Barnum And Bailey Circus; Circus World, a theme park; Metaframe, a pet products company; Turco, a manufacturer of playground equipment; Western Publishing Company, publishing under the popular Golden Book name; and even a motion picture production company -- Radnitz/Mattel Productions -- which produced the Academy Award-nominated feature film "Sounder."
The Handlers left Mattel in the mid-70s, and the new management launched the company into yet another field -- electronics. In 1977, Mattel introduced a line of hand-held electronic games, and in 1979, a home entertainment system called "Intellivision," which showed great promise. Unfortunately, while the Intellivision product was very good, there was no device built into the hardware to lock out cheap imitation software. As a result, a glut of "knock-off" software lowered retail prices and disenchanted retailers.
Falling revenues in non-toy related ventures and record sales and profits of Mattel’s toy lines eventually caused the company to re-evaluate its diversification strategy and, by 1984, all non-toy-related subsidiaries were sold off or closed.
Mattel’s next big "hit" product briefly helped the company balance the success of the Barbie doll with a boys’ toy -- Masters Of The Universe, a line of action figures that featured "He-Man" as the main character. Initially, He-Man eclipsed even the Barbie doll in consumer demand, generating $400 million in sales in 1985. But this hit product line fell as fast as it had risen, eventually leaving Mattel with a big void in sales and warehouses full of unwanted inventory.
After the Masters Of The Universe and Intellivision sales experiences, Mattel decided to focus on profitability instead of pursuing ever-higher sales volume, as it had in the past. The company closed 10 manufacturing plants and reduced headquarters staff and overhead spending. In 1986, Mattel acquired Hong Kong-based ARCO Industries, Ltd., a letter of credit business offering low-priced, non-promoted toys principally to U.S. retailers. Also that same year, Mattel entered into a joint venture arrangement with Bandai, the largest Japanese toy company, to market and sell products in that country.
In 1987, as part of the effort to maintain profitability and consistent revenue streams, Mattel began a successful strategy that continues today -- maximizing core brands while at the same time identifying new brands with core potential. New products and strategies are derived from time-tested product lines with global appeal and fundamental play patterns.
Two of Mattel’s early brands -- Barbie and Hot Wheels -- were strengthened through segmentation, primarily with products sold at various price points and with products that expanded the child’s concept of the brand, with new accessories, innovations and playsets.
In 1988, Mattel added another core brand by reviving its previous association with The Walt Disney Company. The new alliance began with the introduction of a line of infant and preschool toys based on such world-famous characters as Mickey Mouse, Donald Duck, Goofy and Pluto. Later, Disney expanded the agreement with Mattel to include the manufacturing and marketing of toys based on popular contemporary Disney movies – including "Toy Story 2" (Disney/Pixar), "Tarzan," "A Bug’s Life," "Mulan," "Beauty and the Beast," "The Lion King" and "Aladdin" as well as such classics as "Snow White" and "Pinocchio."
Currently, Mattel has a multi-year agreement that guarantees worldwide toy rights for all Disney television and film properties, in addition to the ongoing infant and preschool line, which also includes "Winnie the Pooh" characters.
Much of Mattel’s success can be attributed to its core brand strategy -- which was further strengthened in 1993 by a merger with Fisher-Price, the number one brand in infant and preschool toys. Based in East Aurora, New York, Fisher-Price was founded in 1930 and is recognized for designing and manufacturing high-quality, imaginative toys for children from infancy to age 5, as well as innovative products that help parents care for children, such as highchairs, strollers and car seats.
Also in the early ’90s, Mattel added other famous brands to its stable of products -- UNO and Skip-Bo, the world’s best-selling card games, which the company acquired upon the purchase of International Games; and Power Wheels, the industry’s leading name in ride-on vehicles. In 1994, the purchase of the British company J.W. Spear gave Mattel the international rights to the top-selling word game, Scrabble.
Another major addition to Mattel’s family of power brands came with the company’s 1997 merger with Tyco Toys, makers of Matchbox cars, View-Master, Magna Doodle and
the leading name in electric and radio-control racing, Tyco R/C. The Tyco merger also brought to Mattel the primary toy license for "Sesame Street," the most popular children’s educational TV program.
The summer of 1998 brought another milestone to Mattel -- the acquisition of Pleasant Company, the Wisconsin-based direct marketer best known for its unparalleled "American Girl" brand. This union positions Mattel as the premier girls consumer product company. The American Girl brand is the second largest girls brand in the world and is targeted to girls ages 7 through 12. Barbie, the number one girls brand, is targeted to girls ages 3 to 7.
Mattel also entered into a collaboration with Intel, the world’s largest computer chip maker and a leading manufacturer of personal computer, networking and communications products. The two companies agree to work together to design and develop new generations of interactive playthings-- called "Smart Toys"-- which derive much of their play value from the personal computer.
In May 1999, Mattel completed its merger with The Learning Company, a top maker of software products. Following significant financial losses from Mattel’s Interactive Division, however, which was comprised primarily of the assets of the former Learning Company, Mattel, Inc.’s Board of Directors announced in April 2000 that it had retained Credit Suisse First Boston Corporation to sell its software business.
In February 2000, Mattel was granted the much-coveted licensing agreement for the literary phenomenon Harry Potter, making Mattel the worldwide master toy licensee for the literary characters, as well as for the upcoming feature films from Warner Bros. Pictures.
Building upon its ongoing relationships, Mattel and Nickelodeon signed a new multi-year worldwide licensing agreement in May of 2000 to renew and expand Nickelodeon’s current toy license agreement. As a result, Mattel becomes the master toy license of all Nickelodeon entertainment properties across a broad spectrum of toy categories.
As a passionate champion of children, Mattel’s philanthropic endeavors rose to new heights in November 1998 when it announced a multi-year, $25 million gift to UCLA Children’s Hospital. The gift supports the existing Children’s Hospital and provides for a new state-of-the-art facility, which is currently being built. In honor of Mattel’s donation, the hospital has been renamed the Mattel Children’s Hospital at UCLA. The new I.M. Pei-designed facility will be completed by 2004.
