The Mattel logo is displayed outside the headquarters of the toy company known for products like Barbie and Hot Wheels in El Segundo, California, on June 8, 2023.
Patrick T. Fallon | AFP | Getty Images
Promoted by activist investor Barrington Capital mattel The company is considering selling the American Girl and Fisher-Price brands due to the division’s poor performance.
Mattel shares rose 4% in Friday trading. letter The Wall Street Journal first reported that it was sent to Mattel on Thursday. The toy maker’s stock is trading at about the same level as it was 20 years ago. Mr. Barrington owns an undisclosed amount of stock in the company.
American Girl and Fisher-Price are two iconic brands that are among the most popular in their respective markets.
Although the market for Fisher-Price’s toys is broadly expanding, Barrington’s James Mitarotonda said in a letter to CEO Inon Kreitz that Fisher-Price’s revenue was It said that by 2023, it would have fallen from $1.9 billion to less than $1 billion.
Mitarotonda said that if Mattel cannot stop the continued erosion of both Fisher-Price and American Girl, which has suffered similar declines, the company “may not be the rightful owner of these brands.” No,” he said.
Barrington suggested the company should consider strategic alternatives for these two segments “immediately.”
“We believe these brands are currently undermining the success of Mattel’s other segments and hurting shareholder value,” Mitarotonda said in the release.
A Mattel spokesperson told CNBC in a statement: “Like our shareholders, we look forward to engaging with Mr. Barrington. We welcome this initial engagement and are reviewing the letter.” did.
The letter also highlights “excessive” stock compensation that is higher than its peer group, alleging that Mattel continues to add stock compensation to the company’s adjusted EBITDA, a practice that Mr. called it “shocking”.
Mr. Barrington also told Kreitz that the company should support a $2 billion share repurchase, an expansion of its existing stock repurchase program, suspend ongoing merger and acquisition efforts, and promote a lead director. That’s what he said. michael dolan Kreitz will assume the chair he currently holds.
Mr. Dolan is the former CEO of Bacardi, IMG, and the advertising agency Young & Rubicam.
Barrington has promoted campaigns at Bath & Body Works, Darden Restaurants and Chico’s. Established in 2000.
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