Will Matty Mattel ask for a government handout? Maybe. It looks like the giant toy company’s mascot is extending his hand, pleading for financial assistance in a “time of need.” If sales of its products continue to drop, will Mattel’s leadership seek bankruptcy protection in court—ala Toys R Us? Toy fans around the world are wringing their hands!
We’ve been talking about the “slump” toymakers Mattel (and Hasbro) have been going through for a couple of years, but the downward economic effects of that trend are now about to be be felt on a truly PERSONAL level—by over TWO THOUSAND of Mattel’s employees. Mass layoffs loom. Factories too, are slated for imminent sales and closure. According to VOA News—
“Mattel, home of Barbie dolls and Hot Wheels, is cutting 2,200 jobs in order to save money after the closing of U.S. toy retail giant Toys R Us. The toymaker said the cuts amount to 22 percent of its nonmanufacturing employees worldwide. Mattel has about 28,000 employees. It also plans to sell factories in Mexico as part of a $650 million cost-saving plan.
Mattel reported a loss of $240.9 million in the second quarter, bigger than the $56.1 million loss in the same period a year ago. Revenues fell nearly 14 percent to $840.7 million, below the $863.1 million analysts had predicted. The toymaker has lagged behind its competitors in digital media, analysts say, and is trying to catch up with other brands that have spawned apps, movies and TV shows.
Mattel CEO, Ynon Kreiz, said the company is working closely with other retailers and looking for more ways to sell its toys online.
Bottom Line: Mattel better get its act together. Sales are down. Factories are closing. People are losing their jobs. What else can go wrong over at the “Big M?” Stay tuned to The Joe Report!