Mattel mission and vision statement

Final PDF to printer CASE 19 Mattel Incorporated in 2018: Can Ynon Kreiz Save the Toys? Randall D. Harris Texas A&M University—Corpus Christi “Y non is a good guy, but he doesn’t know toys and will fail like Margo did,” read Ynon Kreiz, Chairman and Chief Executive Officer (CEO) of Mattel, Incorporated.1 It was April 26, 2018, and it was Ynon Kreiz’s first day on the job as Mattel CEO. Mattel, maker of Barbie dolls and Hot Wheels cars, had just received a letter offering to merge Mattel with privately held MGA Entertainment, run by CEO Isaac Larian. In his offer letter, Mr. Larian did not put a specific value or terms on his offer, but had proposed that the two companies merge based upon the value of MGA Entertainment and its brands, which included the Little Tykes line of preschool toys. Larian also argued that he, not Kreiz, should be the executive to lead the turnaround of Mattel.2 Kreiz had been named Chairman and CEO of Mattel on April 19, 2018, and was succeeding Margo Georgiadis in the job. Ms. Georgiadis, hired away from Alphabet Inc.’s Google division, had been appointed as Mattel CEO in February 2017. Unfortunately, Georgiadis had been unable to reverse a sharp drop in Mattel’s revenues, earnings, and stock price.3 The slide in Mattel’s fortunes had been sharpened by the bankruptcy of the retailer Toys “R” Us in 2017, a key customer for Mattel’s products. Kreiz was now the fourth CEO for Mattel in four years. Sitting in his new office at Mattel headquarters in El Segundo, California, Ynon Kreiz knew that he had numerous problems with which to contend as the incoming CEO of Mattel. Where to begin? In his hands on his first day was an unsolicited offer to merge with MGA Entertainment. Mattel had also been in involved in off and on merger negotiations with Hasbro, another close toy industry competitor. tho75109_case19_C216-C231.indd C-216 Central to all of these discussions was a painful ­reality—children around the world were growing up faster and were increasingly drawn to online content, movies, smartphones, and video games. Competition for store space, sales, and market share in the toy industry was intense. Making matters worse, Mattel’s traditional sales channel, physical retail stores, were increasingly under strain and consolidating. The bankruptcy of Toys “R” Us was symptomatic of this retail consolidation. Online retail competition, notably Amazon.com, was increasingly making inroads into the sales of traditional bricks-and-mortar retailers. Mattel had also stumbled in their competition with Hasbro, their closest competitor in the toy industry. Kreiz had taken the reins of the company with a mandate from investors to streamline Mattel operations, improve the company’s focus on technology and entertainment, and to deliver a recovery in Mattel’s struggling stock price. From a peak of $47.82 per share in 2013, Mattel was now trading between $12 and $18 per share. The company had reported a $1 billion loss in 2017. Sales, deeply affected by the bankruptcy of Toys “R” Us, were down 10 percent from 2016 to 2017. With all of these challenges for the struggling company, the pressing question was this: Could Ynon Kreiz stop the slide at Mattel? Further, what should Kreiz and Mattel do next? COMPANY HISTORY Mattel was founded by Ruth and Elliott Handler out of a garage in Southern California in 1945.4 Their first Copyright ©2018 by Randall D. Harris. All rights reserved. 12/18/18 10:49 AM Final PDF to printer Case 19 Mattel Incorporated in 2018: Can Ynon Kreiz Save the Toys? two products were picture frames and dollhouse furniture crafted from scraps of picture frame.