"I'm Carol Spencer, and I was a Barbie designer for over 35 years, and I loved every
minute of it."
Blond hair, fair skin, and a glamorous outfit.
This was the trademark look of a famous Barbie doll in the 1960s.
The brand has changed dramatically since its early days, however, with a Warner Bros.
Live action movie starring Margot Robbie and Ryan Gosling set to release in July 2023, Barbie's parent company,
Mattel, Inc., is gearing up for the big screen.
"Barbie is a cultural icon, a pop icon.
And this movie is really shaping up to be what we believe will become a societal
moment."
Mattel's performance has remained positive this year.
In Q2 2022, net sales surged by 20% to $1.2 billion from the same quarter last
year. Barbie leads Mattel's top power brands in North America and globally, bringing in a total of $300.8
million in gross billings in Q2 2022, a metric Mattel uses to compare its brands.
That's about 25% of Mattel's total portfolio.
Ynon Kreiz joined the company in 2018.
Since early 2020, the stock has continuously performed.
With a heavy background in entertainment and intellectual property, diversification beyond just toys was his
objective.
"We have a buy on Mattel for two reasons.
One: the repair of the toy business, which was in disarray when when Kreiz came in in 2018.
They've done that. They've eliminated $1 billion worth of costs.
They're much quicker to market.
They've got better innovation and better themes.
But then phase two is taking that intellectual property that they've got a treasure trove of and
monetizing."
But Barbie hasn't always maintained its popularity, even at times seen as a cause for young girls' lower body esteem
and greater desire for a thinner body.
Controversies surrounding the doll have directly affected Mattel's bottom line.
Sales and net profits slumped in 2013 onwards for years.
But in the last couple of years, coinciding with the new leadership team, the company's financials are looking
stronger. But with pandemic-induced supply chain issues, inflating costs, stiff
competition from other toy makers and a socially more conscious consumer base, can Mattel's new business model
reel in enough to keep the famed Barbie and Mattel company names
strong?
This is Carol Spencer.
She was a Barbie clothing designer for over three decades and has hundreds of Barbies in her Beverly Hills home in
California.
"I started at Mattel in 1963, and I retired at the very end of
1998. And during the course of it, I fell in love with Barbie.
Ruth Handler was responsible for the idea of a three-dimensional paper
doll, and the paper doll was like a real person.
And when she saw the Lilli doll on a trip to Europe for the Nuremberg Toy Fair, she
said, 'Hey, this is the three-dimensional paper doll.' And she bought a couple of
them. And at that point she was able to get her idea across to
the various people, her husband, for one, and the engineers at Mattel to
understand what she meant by a three-dimensional paper doll."
Barbie's male counterpart, Ken, full name Ken Carson, was introduced in 1961.
Through the years, Barbie has had hundreds of careers, everything from an engineer to a rock star, a
paleontologist and even an astronaut.
"There was always a certain amount of pressure to be
on trend for what was happening in the world, because we actually
worked 12 to 18 months ahead of production when it hit the sales
floor. And so we had to make some educated guesses and it was fun.
There was a lot of research involved in designing for the Barbie doll, and there
was also a lot of child testing involved to see what children liked.
If you designed this way, they would buy it, but if you made it a
different way, they wouldn't.
This is my very first basic doll that I had accepted
for the line, and as you can see, both her hair and her fashion will change
color."
The Industrial Revolution brought about improved manufacturing methods and allowed doll makers to create more
affordable and more humanistic designs, which appealed to children's desire for them.
With Barbie leading the industry in design experimentation and with demand high, the dolls quickly caught on.
By 1987, Barbie had brought in $430 million in sales, catching up to the then-popular Cabbage
Patch line, which brought in $600 million in 1985.
In just four years, Barbie sales more than doubled and reached $1 billion in 1991.
Many dolls were made in the likeness of the biggest supermodels, movie stars and even authors and other female
entrepreneurs in later years.
The brand even has a dedicated Pantone color hex code: Barbie pink.
"Barbie was and still is a fond spot in my heart.
I enjoyed designing for her, and now I enjoy hearing people talk
about my designs.
And I think of every child who played with the Barbie doll as my child.
So in that case, I have a very large
family."
Despite its claim to fame, Barbie dolls have not always been held in high esteem.
Some parents have accused the brand of curating a fake image and promoting impossible beauty standards for
children.
"We were trained to think of Barbie doll as a real person, and she
had a job at that time.
She was actually introduced as a fashion model, and she was quite lovely.
She was in the proportion of a fashion model, and throughout the course
of years, various people started complaining that
she didn't look like them or what have you.
But actually, that was against the play pattern of the doll,
and we never really responded to it.
If you respond to criticism, it's going to continue."
Parents began to see the dolls as "outdated" and "sexist," claiming that the dolls were all fair-skinned and skinny,
depicting an unrealistic one-size-fits-all image.
Between 2013 and 2016, Mattel saw its Barbie sales sink significantly over three consecutive
years, amounting to an operating loss of $342.8 million in 2017.
"We've seen situations where the company has been caught flat-footed by competition coming into the space against
Barbie. We've seen times when the- the themes and innovation and fashion
elements on Barbie were wrong and not appropriate, uh, mistimed.
So a lot of times it's about messaging, about what Barbie represents and means.
And Mattel did a very poor job of that not that long ago."
Despite some controversy, vintage Barbies are steadily rising in value.
An original mint condition Barbie from 1959 can be seen selling for up to $25,000 on the secondary
market. In recent years, Barbie has kept an open ear to criticism.
In 2015, the brand launched 23 new Barbies with different skin tones, and a year later, in 2016, it
released a line of Barbies with different body types.
"Everything we do is making our product, brands and play systems current and relevant to today's consumers.
And this is really about taking brands that have been around for, in the case of Barbie, 63 years.
It's how do you take these heritage brands that have such a strong connection with consumers, a built-in fan base
— in some cases going back to an even three generations — and make it relevant to today's consumers.
And our ability to do that so well has been a key part of our success."
Since then, the company has expanded its diversity profile even further, creating Barbies with vitiligo, prostheses and
even hearing aids.
Barbie's recent transformation can be largely credited to on Kreiz's arrival in 2018.
Despite being Mattel's fourth CEO in four years, Kreiz has constantly found ways to innovate and
diversify. In July, the company announced its multiyear deal with Elon Musk's SpaceX to create a line of toys
inspired by the space venture.
While diversification is one aspect, Kreiz has focused on changing the company from a manufacturing company to an IP
company managing franchises.
Previously serving as chairman and CEO of entertainment companies, Mattel's wealth of intellectual property has
undergone deep expansion by Kreiz's direction.
Mattel was struggling prior to Kreiz joining.
That was partly due to the residual effects of the bankruptcy of Toys R Us, a major toy retailer.
By October 2018, Mattel had turned things around in terms of profitability, reporting a 41%
increase in operating income growth.
The Barbie brand has also paid attention to the rising digital sector in children's toys and leisure.
Mattel is no stranger to video games, as the first Barbie video game was introduced in 1984 and has since
expanded into more than 75 titles across multiple platforms.
The brand has also leaned into streaming, with its Mattel Television division, developing shows for platforms like
Netflix and Vudu.
Mattel's stock has risen steadily since 2020, though the company has seen several dips through the years.
The recent Barbie movie deal is one of Mattel's biggest moves for the brand.
Its cast and crew are particularly star-studded, but analysts say it's risky.
"It's high risk, high reward.
The high reward part: Elevating the brand, extending the cycle, being able to participate perhaps in a movie event,
but also sell more T-shirts, backpacks, etc.
and extend that growth cycle, so that movie can extend that cycle and add two, three, four, five years to that cycle.
Here's the risk: You've got a brand that's doing phenomenally well, so why mess that
up?"
The movie is also changing how the brand thinks of its target audience.
Since the brand has a multigenerational fan base, Mattel can capitalize on the element of nostalgia.
Barbie is no longer just for kids.
"I think what they've seen from other brands like Hasbro, like Funko, like other toy companies, is that there is a
huge market for people outside of the target demographic who have this nostalgia for
Barbie or for Star Wars or for Marvel, who grew up with these brands and really tapping into those people who have
that emotional gravitation towards those brands, and then kind of tapping into
that love and saying, 'Okay, here's something for you.'"
With the Ynon Kreiz's entertainment background, the company has its sights set on the untapped potential of its multiple
intellectual properties and has 13 movie deals in the works .
"For Mattel, their big thing is working with third parties.
They want to work with other people who are going to take on some of that financial risk.
For their rival company, Hasbro, which has brought in eOne a few years ago.
Their mentality is more, 'We want to produce all of this in house.
We want to have so much control over the content.' But that also means they take a lot of the financial control."
"As the owner of one of the strongest portfolios of children and family entertainment franchises in the world, we have a
tremendous opportunity to capture significant value outside of the toy aisle.
And in today's world, everyone is looking for big franchises, big IP that rise above the noise
level."
For now, Barbie is in full glitz and glam for Mattel.
Given the toy industry's cyclical nature, however, it's worth wondering how long the glitter will stay gold.