Barbie has been steadily losing ground to Bratz, so Mattel is trying some new approaches. They've worked a deal with Universal to upgrade production of Barbie's direct-to-DVD (which appear to be a nice little money-maker on their own -- 27 million units at about $14 bucks each).
The two companies also discussed the possibility of a Barbie tie-in with Universal's theme parks and theatrical premieres for upcoming Barbie animated films.American Girl, meanwhile, has a nice problem, but one that sometimes afflicts fast-growing elite brands -- how do you grow fast and stay elite?
"When something's value is wrapped around its uniqueness, it's hard to exploit that in scale," said toy industry analyst Sean McGowan at Harris Nesbitt Corp. in New York. "The specialness of the product is a big part of its appeal — if it becomes available to everybody, it loses some of that."The company is currently opening its third store, in LA, after operating only one, in Chicago, for several years, and then adding one in New York. For the present there are no plans to expand widely -- in fact the company president indicates that they may never go beyond five stores. The idea seems to be that there's no reason to mess with something that works so well.
In 2005, while Barbie's sales slumped 13% worldwide, American Girl's revenue rose 15% to $436 million. Oppenheimer & Co. analyst Linda Bolton Weiser pegged American Girl's operating profit at about $100 million, meaning that the division accounted for 8% of Mattel's gross sales and about 15% of the parent company's operating profit.I hope they don't mess up a good thing. As a parent, I spent a ton of money on those books and dolls (my daughter has Felicity, Samantha, and Kirsten) -- and I don't regret a dime of it.
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