Game Over for Struggling Mattel CEO

Mattel Inc. Chief Executive Bryan Stockton abruptly resigned Monday, as another disastrous holiday season showed his recent efforts to revive the creative culture at the world’s largest toy company didn’t do the trick. The company tapped longtime board member Christopher Sinclair to serve as interim CEO and launched a search for a permanent leader. Mr. Sinclair will also take over Mr. Stockton’s title of chairman. ENLARGE Mattel didn’t have any standout toys this holiday season, and a big bet on clustering its marketing spending closer to Christmas didn’t appear to make enough of a difference. Profit during the holiday quarter fell 59% from a year earlier to $149.9 million, as sales dropped 6% to $1.99 billion. The results were the last straw after several quarters of declining sales. “Our result were not meeting our expectations and the board felt that a leadership change was in order,” Mattel spokesman Alex Clark said. Advertisement Mattel declined to make Mr. Stockton available, and he didn’t respond to requests for comment. Mr. Stockton took the CEO job three years ago after more than a decade at Mattel. Prior to that, he spent more than two decades in the food business at companies including Kraft. People inside the company and at several large retailers said his tenure was marked by a growing focus on the numbers and overseas expansion—at the expense of the Mattel’s creative side. Meanwhile, the explosive growth of the iPad had created a big new rival for kids’ attention. According to current and former executives, Mattel’s executives needed to be thinking up better toys. Instead, they became entangled in a culture that valued endless meetings and long PowerPoint presentations. Meanwhile, smaller competitors like VTech Holdings Ltd. were taking shelf space, and Lego A/S was challenging Mattel’s position as the largest toy company. Some retailers found that Mr. Stockton wasn’t as involved in toy selection as counterparts at rivals such as Hasbro and Lego. He rarely accompanied retailers on tours of Mattel’s showrooms that showed off products for the coming year, according to former Mattel executives and retail executives. The CEO recently changed tack and scheduled more meetings with the top U.S. toy retailers, a person familiar with the matter said. In addition, he delivered an edict late last summer trying to speed up decision-making and free up executives by putting rules around meetings—including one that said no meeting is to be held without a specific purpose. Mr. Stockton also has made some important hires aimed at empowering the creative side. Last year, Richard Dickson, a Mattel veteran who led Barbie’s turnaround in the early part of this decade, was rehired as chief brands officer. The efforts have been too little, too late, however. With its results weakening, Mattel is preparing for another major round of belt-tightening. In October, it announced plans to cut another $250 million to $300 million in annual costs. Mr. Stockton said in November that includes eliminating redundant layers of management. The process for culling jobs has already started. Last Friday, Mattel offered early-retirement packages to eligible employees. The two top internal candidates for the CEO job likely will include Mr. Dickson, as well as Tim Kilpin. Both were named president two weeks ago. Analysts, however, expect Mattel to strongly consider someone from outside the company, if not outside the toy industry entirely. Mr. Sinclair has served on the toy company’s board since 1996. He said Monday that Mattel will work through the coming months to revitalize its business and find the right leader. Mattel has struggled in recent quarters as its Barbie doll has fallen out of style. Sales of the fashion doll fell a staggering 21% in the third quarter, contributing to a 22% drop in profits and an 8% decline in sales for the toy maker. Barbie once generated around $1.8 billion in annual sales. In the 12 months through September, the total was just over $1 billion. (Source WSJ)