Mattel, Inc. is the world's largest toy company based on
revenueIn business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
. The products it produces include Fisher Price,
BarbieBarbie is a fashion doll manufactured by the American toy-company Mattel, Inc. and launched in March 1959. American businesswoman Ruth Handler is credited with the creation of the doll using a German doll called Bild Lilli as her inspiration....
dolls,
Hot WheelsHot Wheels is a brand of die cast toy car, introduced by American toymaker Mattel in 1968. It was the primary competitor of Matchbox until 1996, when Mattel acquired rights to the Matchbox brand from Tyco.-Models:...
and Matchbox toys,
Masters of the UniverseMasters of the Universe is a media franchise created by Mattel....
,
American GirlAmerican Girl is an American line of 18-inch dolls released in 1986 by Pleasant Company. The dolls portray ten-year-old girls of a variety of ethnicities living in various times throughout American history. They are sold with accompanying books told from the viewpoint of the girls...
dolls,
board gameA board game is a game which involves counters or pieces being moved on a pre-marked surface or "board", according to a set of rules. Games may be based on pure strategy, chance or a mixture of the two, and usually have a goal which a player aims to achieve...
s, and, in the early 1980s,
video game consoleA video game console is an interactive entertainment computer or customized computer system that produces a video display signal which can be used with a display device to display a video game...
s. The company's name is derived from
Harold "Matt" MatsonHarold Matson was an American literary agent and founder of the Harold Matson Company. His clients included Evelyn Waugh, C. S. Forester, Arthur Koestler, Malcolm Lowry William Saroyan, Allen Drury, Robert Ruark, Herman Wouk, Evan S...
and
Elliot HandlerElliot Handler was the co-founder of Mattel. With his wife, he was a developer of some of the biggest-selling toys in American history, including Barbie dolls, Chatty Cathy, Creepy Crawlers and Hot Wheels....
, who founded the company in 1945. Handler's wife,
Ruth HandlerRuth Handler was an American businesswoman, born to Jewish-Polish immigrants Jacob and Ida Moskowicz, the president of the toy manufacturer Mattel Inc., and is remembered primarily for her role in marketing the Barbie doll....
, later became president, and is credited with establishing the Barbie product line for the company in 1959. After the release of the Barbie doll, Mattel revolutionized the toy industry with its talking dolls and toys. Major successes in the 1960s with the talking Chatty Cathy doll in 1960 and See 'N Say toys in 1965 moved Mattel to its position as the number one toymaker in America. Mattel closed its last factory in the United States of America, originally part of the
Fisher-PriceFisher-Price is a company that produces toys for infants and children, headquartered in East Aurora, New York. Fisher-Price has been a wholly owned subsidiary of Mattel since 1993.-History:...
division, in 2002, outsourcing production to China, the beginning of a chain of events that led to a scandal involving lead contamination. On Friday, September 3, 2010 a small-scale "Flash Crash" appears to have occurred in Mattel shares which plunged 22% in pre-market trade for no apparent reason, only to recover shortly thereafter.
Board of directors
Current members of the
board of directorsA board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
of Mattel Inc. are:
- Robert A. Eckert, chairman
- Tully Friedman
- Michael Dolan
- Vasant Prabhu
- Dominic Ng
- Andrea Rich
- Ronald Sargent
- Christopher A. Sinclair
Christopher A. Sinclair is an American businessman. He is the current Chairman of the Executive Committee of Mattel, Inc., the world's largest toy company. He is the former Chariman and CEO of Pepsi-Cola and the former executive chairman and CEO of Cambridge Solutions Ltd. the second largest...
- G. Craig Sullivan
- John Vogelstein
- Kathy Whit
Corporate responsibility
Mattel announced its Global Manufacturing Principles (GMP) in 1997, designed to set safe and fair treatment of employees.
In 2003, Mattel issued its first
Global Reporting InitiativeThe Global Reporting Initiative produces one of the world's most prevalent standards for sustainability reporting - also known as ecological footprint reporting, Environmental Social Governance reporting, Triple Bottom Line reporting, Corporate Social Responsibility reporting...
report to publicly assess
the success of the GMP and commit to improvements. Simultaneous to this report, Mattel issued their 2004 Corporate Responsibility report, the first to be issued by a toy company. From both the 2004 and 2007 reports, a majority percentages of Mattel-owned facilities are regularly audited, it can be seen that Mattel has room to expand its supply chain auditing.
Following the high-profile recalls of 2007, Mattel appointed Geoff Massingberd as Vice President of Corporate Responsibility, to lead development and implementation of programs business integrity.
Asia Pulp and Paper Controversy
On June 8, 2011,
GreenpeaceGreenpeace is a non-governmental environmental organization with offices in over forty countries and with an international coordinating body in Amsterdam, The Netherlands...
launched
"Barbie, It's Over", an international campaign criticising Mattel's use of
Asia Pulp & PaperAsia Pulp & Paper, also known in the paper industry as APP is based in Singapore, is one of the largest pulp and paper companies in the world. It was founded by Eka Cipta Widjaja, who had significant ties to the Suharto ruling family in Indonesia. APP claims to obtain 80-90% of the fiber for...
's products in its packaging, particularly in its line of
BarbieBarbie is a fashion doll manufactured by the American toy-company Mattel, Inc. and launched in March 1959. American businesswoman Ruth Handler is credited with the creation of the doll using a German doll called Bild Lilli as her inspiration....
products. Greenpeace accuses Asia Pulp & Paper of clearing Indonesian rainforests and threatening species native to those rainforests. Within two days of the campaign's start, Mattel ordered its packaging suppliers to stop buying from Asia Pulp & Paper pending an investigation into Greenpeace's deforestation allegations, and further ordered its suppliers to report on how they source materials.
The Learning Company acquisition
In May 1999, at the height of the
dot-com bubbleThe dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
, Mattel acquired
The Learning CompanyThe Learning Company is an American educational software company, founded in 1980. It produced a grade-based system similar to Knowledge Adventure's JumpStart series. The products for preschoolers through second graders feature Reader Rabbit, and software for more advanced students features The...
for $3.5 billion in stock or 4.5 times annual sales. The Learning Company was considered at the time one of the leading entertainment and educational software companies, owner of such titles as
Reader RabbitReader Rabbit is an edutainment software franchise created in 1986 by The Learning Company. This series currently makes up the greater part of a franchise of grade-based and subject-based titles, where the games for infancy through second grade feature Reader Rabbit...
,
Carmen SandiegoCarmen Sandiego is a media franchise of educational computer and video games, television programs, books and other media featuring a thieving villain of the same name. The basic premise of the franchise lets the user or protagonists become agents of the ACME Detective Agency, who attempts to thwart...
,
MystMyst is a graphic adventure video game designed and directed by the brothers Robyn and Rand Miller. It was developed by Cyan , a Spokane, Washington––based studio, and published and distributed by Brøderbund. The Millers began working on Myst in and released it for the Mac OS computer on September...
,
RivenRiven is a puzzle adventure game and the sequel to Myst. Developed by Cyan Worlds, it was initially published by Brøderbund. Riven was distributed on five compact discs and released on October 29, 1997, in North America; it was later released on a single DVD-ROM, with improved audio and a...
, and National Geographic, but had in 1997 accumulated losses of $475 million. Mattel thought that this acquisition would help business diversification by giving the company a leading position in the market of consumer software. Mattel CEO Jill Barad expected to have direct internet sales for all Mattel's toys and predicted that Mattel sales over the Internet would reach $1 billion in a few years.
In the third quarter of 1999, Mattel expected The Learning Company to post $50 million in profits but in reality it posted losses of $105 million. Despite this loss, CEO Jill Barad continued to be optimistic. Things worsened in the fourth quarter, as The Learning Company's pre-tax losses reached $183 million. For the year The Learning Company's pre-taxes losses were $206 million, on revenues of $750 million. The Learning Company's losses depressed Mattel's 1999 profits and as a result, Mattel posted a $82 million net loss compared to a $206 million net income in 1998. Mattel also warned that it would take a revamping charge of $75 million to $100 million in the first quarter of 2000 because of
The Learning CompanyThe Learning Company is an American educational software company, founded in 1980. It produced a grade-based system similar to Knowledge Adventure's JumpStart series. The products for preschoolers through second graders feature Reader Rabbit, and software for more advanced students features The...
.
By 2000, Mattel was losing $1.5 million a day with The Learning Company, and Mattel's stock price (which reached a high of $45 in March 1998) traded at $11 in February 2000. Under pressure, on February 3, Mattel's CEO Jill Barad resigned but received a $50 million severance package. In April Mattel announced that it was selling The Learning Company; analysts predicted that The Learning Company could be sold for $400 million, then for $200 million. In the end, in October, The Learning Company was sold to Gores Technology for nothing other than a percentage of The Learning Company's future profits. In addition Mattel cut 10% of its workforce to further cut costs. As a result of this restructuring Mattel posted a net loss of $430 million for the year 2000.
Product recall
On August 2, 2007, Mattel's Fisher-Price subsidiary recalled almost one million Chinese-made toys, including
Dora the ExplorerDora the Explorer is an American animated television series created by Chris Gifford, Valerie Walsh, and Eric Weiner. Dora the Explorer became a regular series in 2000. The show is carried on the Nickelodeon cable television network, including the associated Nick Jr. channel. It aired on CBS until...
and
Sesame StreetSesame Street has undergone significant changes in its history. According to writer Michael Davis, by the mid-1970s the show had become "an American institution". The cast and crew expanded during this time, including the hiring of women in the crew and additional minorities in the cast. The...
toys, because of potential hazards from parts of the toys which were colored using
lead-based paintLead paint or lead-based paint is paint containing lead, a heavy metal, that is used as pigment, with lead chromate and lead carbonate being the most common. Lead is also added to paint to speed drying, increase durability, retain a fresh appearance, and resist moisture that causes corrosion...
that may have exceeded the US Federal limit of 600 parts per million.
In worst cases, Mattel toys' lead in paint was found to be 180 times the limit. The paint on the toys was up to 11% lead, or 110,000 parts per million. U.S. Federal law allows just 0.06% lead, or 600 parts per million. Children who suck on or ingest toys or jewelry with high lead content may be poisoned, which can lead to learning and behavior problems, even death in some cases.
On August 14, 2007, Mattel recalled over 18 million products because it was possible that they could pose a danger to children due to the use of strong magnets that may detach. Strong small magnets could be dangerous to the children if two or more were ingested, attracting each other in the intestines and causing damage. Some instances were reported. A child swallowed a
Polly PocketPolly Pocket is a toy line of dolls and accessories. The name comes from the fact that many of the original Polly Pocket dolls came in pocket-size cases. The current Fashion Polly dolls sold by Mattel differ significantly from those originally sold by Bluebird Toys. The original Bluebird dolls...
toy magnet and had to undergo a surgery. At the time of the recall, none of the U.S. or European safety legislation and standards addressed the specific hazard of strong magnets. Some of the products had been available in U.S. stores since 2003, during which time Mattel did not consider them harmful enough to warrant a
recallA product recall is a request to return to the maker a batch or an entire production run of a product, usually due to the discovery of safety issues. The recall is an effort to limit liability for corporate negligence and to improve or avoid damage to publicity...
. After incidents with
similar magnetic toy partsMagnetix was a magnetic construction toy consisting of a combination of plastic building pieces containing embedded neodymium magnets, and steel bearing balls which can be connected together to form various geometric shapes and structures...
being swallowed, causing perforation of the intestines, Mattel re-wrote its policy on magnets, finally issuing this recall in August 2007.
Recalled items included die-cast
CarsCars is a 2006 American animated family film produced by Pixar and directed by John Lasseter and co-directed by Joe Ranft. It is the seventh Disney·Pixar feature film, and Pixar's final, independently-produced motion picture before its purchase by Disney...
character, Sarge, made between May and July 2007, found to have been manufactured using paint containing higher than acceptable levels of lead (436,000 recalled globally), 7.1 million
Polly PocketPolly Pocket is a toy line of dolls and accessories. The name comes from the fact that many of the original Polly Pocket dolls came in pocket-size cases. The current Fashion Polly dolls sold by Mattel differ significantly from those originally sold by Bluebird Toys. The original Bluebird dolls...
toys produced before November 2006; 600,000
BarbieBarbie is a fashion doll manufactured by the American toy-company Mattel, Inc. and launched in March 1959. American businesswoman Ruth Handler is credited with the creation of the doll using a German doll called Bild Lilli as her inspiration....
and Tanner Playsets; 1 million Doggie Daycare; Shonen Jump's One Piece; and thousands of Batman Manga toys due to exposed magnets. 18.2 million items were recalled in total.
Zhang ShuhongZhang Shuhong was a Chinese businessman and factory owner. Zhang committed suicide after toys made at his factory for Fisher-Price were found to contain lead paint.- Personal life :...
, co-owner of the Lee Der Toy Company, which had made a number of toys for Mattel, committed suicide by hanging himself at one of his company's factories in Foshan on August 11, 2007, according to authorities. Lee Der ceased business.
On September 4, 2007, Mattel recalled a further 530,000 affected toys in the United States – and 318,000 outside the United States – after its intensive testing found that the Chinese-made products contained levels of lead in painted parts that were above the acceptable limit set by the company. This third recall in a month included accessories for
Barbie dolls and Fisher-Price toys.
On June 5, 2009, the
Consumer Product Safety CommissionThe United States Consumer Product Safety Commission is an independent agency of the United States government created in 1972 through the Consumer Product Safety Act to protect "against unreasonable risks of injuries associated with consumer products." The CPSC is an independent agency that does...
fined Mattel and its Fisher-Price division $2.3 million dollars for violation of Code 16 of Federal Regulations CFR 1303, the Federal lead paint ban. While Mattel agreed to the fine, no wrong doing was admitted on the companies part.
Among others,
FortuneFortune is a global business magazine published by Time Inc. Founded by Henry Luce in 1930, the publishing business, consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time Warner was the world's largest...
magazine rated the debacle involving recalls of Chinese products, including Mattel's products, as one of the 'Dumbest Moments' in business for 2007.
Mattel's response
Mattel has increased audits and testing of all products. In August 2007, CEO Robert Eckert said, "We were let down, and so we let you down," referring to the three massive product recalls for lead contamination of paint.
On September 21, 2007, Mattel's Executive Vice-President for worldwide operations, Thomas Debrowski, traveled to Beijing. In a meeting with China's product safety chief, Li Chanjiang, Debrowski took full responsibility for the magnet recalls and said that, "vast majority of those products that were recalled were the result of a design flaw in Mattel's design, not through a manufacturing flaw in China’s manufacturers." Reading a prepared text, he continued, "Mattel takes full responsibility for these recalls and apologises personally to you, the Chinese people, and all of your customers who received the toys."
Partnerships
In March 2005, Mattel partnered with
Oasys MobileOasys Mobile is a leading mobile game developer and publisher. Oasys develops top-ranked franchise games and applications based on brands such as Mattel, Sid Meier's Civilization IV, Railroad Tycoon, Pirates!, Phil Hellmuth, AROD and Hooters Calendar...
to extend their market into the mobile field. The partnership was announced on March 16, 2005 and gave
Oasys MobileOasys Mobile is a leading mobile game developer and publisher. Oasys develops top-ranked franchise games and applications based on brands such as Mattel, Sid Meier's Civilization IV, Railroad Tycoon, Pirates!, Phil Hellmuth, AROD and Hooters Calendar...
the right to produce games on such licenses as UNO, Ker Plunk!, Toss Across, and Rock'em Sock'em Robots. Since then the two have worked together to add such licenses as the Barbie, Magic 8 Ball and Max Steel IPs to Oasys' portfolio. These subsequent partnerships also extended the territories in which they could market their products. The new markets included Japan and Taiwan for the Barbie license and Japan, China, Korea, India, and the Philippines for the UNO license. In late 2009, Mattel signed a deal to make WWE toys from 2010. The deal has proven to be successful for WWE, garnering nearly $52 million in toy and related merchandise sales in 2010, compared to $44.7 million the previous year.
Lawsuits
Some of the lawsuits involving Mattel are as follows:
- Keller Rohrback L.L.P. Files Suit Against Mattel, Inc. for Selling Toys Covered in Lead Paint
- Mattel Lawsuit Seeks Lead Tests for Children. Class action
In law, a class action, a class suit, or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued...
wants toymaker to pay for medical testing.
- Family files suit against maker of Polly Pocket
Polly Pocket is a toy line of dolls and accessories. The name comes from the fact that many of the original Polly Pocket dolls came in pocket-size cases. The current Fashion Polly dolls sold by Mattel differ significantly from those originally sold by Bluebird Toys. The original Bluebird dolls...
after son undergoes surgery
- Mattel against Winx Club
Winx Club is a 2004 Italian animated television series, created by Iginio Straffi and produced by Rainbow S.r.l.. The series is aimed toward children between the ages of five and twelve, but is also popular among teens...
.
- Shareholders File Lawsuit Against Mattel Over Toy Recalls
- Mattel sued the band Aqua
Aqua is a Danish dance-pop group, best known for their 1997 breakthrough single "Barbie Girl". The group formed in 1989 and achieved huge success across the globe in the late 1990s and early 2000s. The group managed to top the UK Singles Chart with their first three singles. The group released two...
, saying their song"Barbie Girl" is a song by the Danish-Norwegian dance-pop group Aqua, who released the song in 1997 as their third single overall, and the first United Kingdom release...
violated the Barbie trademark and turned Barbie into a sex object, referring to her as a "Blonde BimboBimbo, in its popular English language usage, describes a woman who is physically attractive but is perceived to have a low intelligence or poor education. The term can also be used to describe a woman who acts in a sexually promiscuous manner...
." The lawsuit was finally rejected in 2002.
- Mattel was involved in legal proceedings with Super Duper Publications in an attempt to suppress Super Duper's use of the words "and say" in their therapy products. Super Duper Publications specializes in materials for use in special education classrooms but Mattel accused Super Duper of diluting their "See N' Say" product line. Mattel won the legal battle and was awarded $400,000 in penalties. They are now seeking millions of dollars to pay for their legal expenses and costs.
- Mattel Inc. defeated MGA Entertainment
MGA Entertainment is a manufacturer of children's toys and entertainment products founded in 1979. Its products include the Bratz fashion doll line, Lalaloopsy, Kachooz!, Moxie Girlz, Moxie Teenz, Hugwallas, BFC, Ink. and Rescue Pets. MGAE also owns The Little Tikes Company...
Inc. in a conflict over the creation of the BratzBratz is an American line of fashion dolls and merchandise manufactured by MGA Entertainment. Four original 10" dolls were released in 2001 - Cloe, Jade, Sasha and Yasmin...
doll line. The U.S. District Court in RiversideRiverside is a city in Riverside County, California, United States, and the county seat of the eponymous county. Named for its location beside the Santa Ana River, it is the largest city in the Riverside-San Bernardino-Ontario metropolitan area of Southern California, 4th largest inland California...
ruled that Bratz designer CEO, Carter Bryant, violated the terms of his exclusivity contract with Mattel. It was decided that he created the Bratz doll concept while he was working for Mattel. This decision will lead to the possibility for Mattel to claim right to the Bratz doll line as well as the right to receive damages.
- Mattel Inc VS Playing Mantis. In the mid-1990s, Playing Mantis released a line of rechargeable cars which were a direct copy of the 1970s Mattel Hotwheels Sizzlers with the same name. The merchandise was quickly removed from store shelves. Mattel won the case, however the payout from Playing Mantis remains unknown. Mattel has since re-released its own line of Sizzlers through an exclusive deal with Target
Target Corporation, doing business as Target, is an American retailing company headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer in the United States, behind Walmart. The company is ranked at number 33 on the Fortune 500 and is a component of the Standard & Poor's...
Stores.
- Mattel Inc VS MGA Entertainment
MGA Entertainment is a manufacturer of children's toys and entertainment products founded in 1979. Its products include the Bratz fashion doll line, Lalaloopsy, Kachooz!, Moxie Girlz, Moxie Teenz, Hugwallas, BFC, Ink. and Rescue Pets. MGAE also owns The Little Tikes Company...
. In April of 2011, Mattel was forced to pay $88.5 million to MGA Entertainment in a dispute over the BratzBratz is an American line of fashion dolls and merchandise manufactured by MGA Entertainment. Four original 10" dolls were released in 2001 - Cloe, Jade, Sasha and Yasmin...
line of dolls. In the court ruling, the judges found that Mattel did not own drawings of BratzBratz is an American line of fashion dolls and merchandise manufactured by MGA Entertainment. Four original 10" dolls were released in 2001 - Cloe, Jade, Sasha and Yasmin...
dolls. The BratzBratz is an American line of fashion dolls and merchandise manufactured by MGA Entertainment. Four original 10" dolls were released in 2001 - Cloe, Jade, Sasha and Yasmin...
dolls hurt the sales of BarbieBarbie is a fashion doll manufactured by the American toy-company Mattel, Inc. and launched in March 1959. American businesswoman Ruth Handler is credited with the creation of the doll using a German doll called Bild Lilli as her inspiration....
dolls significantly over the period of time that the BratzBratz is an American line of fashion dolls and merchandise manufactured by MGA Entertainment. Four original 10" dolls were released in 2001 - Cloe, Jade, Sasha and Yasmin...
dolls were on the market.
Products
Mattel distributed
Nintendois a multinational corporation located in Kyoto, Japan. Founded on September 23, 1889 by Fusajiro Yamauchi, it produced handmade hanafuda cards. By 1963, the company had tried several small niche businesses, such as a cab company and a love hotel....
's products in Canada from 1986 to 1990, the UK until 1990 when Nintendo Computer Entertainment UK was established, and Australia from 1987 to early 1994 when Hiroshi Yamauchi opened
Nintendo AustraliaNintendo Australia Pty. Ltd. established in 1994, located in Victoria is Australia's local head office, sales, licensing and distribution centre for products and other Intellectual Properties created by Nintendo Co., Ltd of Kyoto, Japan and is owned by Nintendo Co., Ltd in Japan. Prior distribution...
Pty Ltd, Nintendo's only privately owned subsidiary and had Susumu Tanaka from Nintendo UK Ltd and Graham Kerry from Mattel Australia Pty Ltd as the first Managing Directors of the subsidiary.
Mattel's international revenue accounts for 49% of its gross sale in 2007, coming from regions like Europe, Latin America and Asia.
Mattel's International Sales Revenue by Geographical Regions in 2007
See also
- 2007 Chinese export recalls
In 2007 a series of product recalls and import bans were imposed by the product safety institutions of the United States, Canada, the European Union, Australia and New Zealand against products manufactured in and exported from the mainland of the People's Republic of China because of numerous...
- Hasbro
Hasbro is a multinational toy and boardgame company from the United States of America. It is one of the largest toy makers in the world. The corporate headquarters is located in Pawtucket, Rhode Island, United States...
External links