Renew or die. Mattel, clearly aware of the changes in the mentality of society and faced with the loss of purchasing power of consumers, decided to invest its efforts in a transformation of the business model. The Barbie movie is the first step in a new strategy driven by Yon Kreiz, CEO of the company since 2018, who seeks to create a Marvel-style cinematic universe for Mattel toys. And it’s working for him!
Just look at Mattel’s accounts in 2022 and at the beginning of 2023, when it closed the first quarter of the year with 22% less sales. It is true that during the pandemic the company managed a significant rebound in sales, especially during 2021, but it ended up ostracized. Barbie’s worldwide gross sales fell by 41% to $176.9 million (158.7 million euros).
Specifically, Mattel closed the first half of 2023 with a total loss of €71.26 million. In the same period of 2022 they presented a profit of 78.99 million euros, but the turnover did not show any evolution and experienced a drop of 16.4%, with a 20.9% less gross profit. For its part, its Ebitda was also 80% lower compared to the first half of 2022.
But the trend has changed and the film has served to change Barbie’s image in society, something that has led to companies in the textile sector such as Zara or Primark joining the ‘pink effect’. Old projects have also been revitalized, such as the possibility of renting the doll’s mansion in Malibu, known as Dreamhouse, through the Airbnb platform for a price of $60 for two days.
Barbie has undoubtedly become the highest-grossing movie of the year, having grossed 1.38 billion dollars (1.28 billion euros) worldwide. It thus surpasses the 1.36 billion dollars (1.27 billion euros) collected by the Super Mario Bross movie.
Mattel defends itself by assuring that the drop in doll sales during the first half of the year was due to a decrease in efforts, since they were all aimed at aligning promotions with the theatrical release, as well as Christmas campaigns.
Thanks to Barbie, the image of the classic, old-fashioned woman, with perfect measurements and based on clear stereotypes, has been transformed into a feisty, independent, modern and feminist woman. The perfect woman of the 50s, who only needed nice clothes, a house and a boyfriend to be happy, becomes a fearless and adventurous girl. The new look of the feature film directed and written by and Greta Gerwig has managed to boost sales of the doll.
In fact, such is the success that Barbie has achieved, that Kreiz is considering bringing to theaters 14 other films that resurrect some Mattel properties such as Masters of the Universe and Hot Wheels. In the case of the latter, through an action movie produced by J.J. Abrams.
A noticeable increase in sales
The classic Barbie doll, as a result of the movie, has seen its sales skyrocket, especially online. Despite its high price, between 40 and 60 euros, the Barbie doll has historically accounted for 40% of the company’s total sales, although in 2022 its demand fell by 9%. Annual growth is now estimated to be 6.8% in 2023 (approximately $1.6 million gross profit) and 5.3% in 2024.
According to Harley Finkelstein, president of Shopify (Mattel’s e-commerce platform), Barbie doll sales have soared by more than 56%. And is that during the third quarter of the year shows an optimistic trend of more than 24.44 million euros in profits.
Faced with the high demand, especially for historical models, Mattel has decided to slightly lower the prices of its doll to 46 euros, approximately. In fact, in Spain demand has increased by more than 17% due to the impact of the feature film. According to Mattel, a Barbie is sold every three seconds in the world. In 2022 they increased their sales by 24.3%.
Kreiz himself is surprised by the sales data, as he assures that they did not make the movie to sell more toys, but to create quality content that people would want to watch and consume. If that content is seen and people connect with it, then good things will happen for Mattel, he says.
An upbeat balance sheet
The Barbie phenomenon has led Mattel to reap its best figures for months. Currently, the company’s shares are trading at $21.82 on the Nasdaq, up 17.37% over the past month and gaining a larger market share. In March 2023, they hit record lows when their shares sold for just $16 each.
Since its launch in 1959, Barbie marked a before and after in popular culture. Mattel was able to create an unprecedented franchise, which it has now managed to reinforce with the movie starring Margot Robbie and Ryan Gosling, of which a sequel is not ruled out.
Their sales declined sharply from 2013, going from $6.5 billion in sales to $4.5 billion in 2018. In 2021 they recorded their highest sales rate since 2013 with one $1.7 billion worldwide. Despite the fact that digitalization and the high cost of living have played against Barbie and Mattel, the film has been seen as a clear effective marketing strategy to relaunch a product that, although updated, will never go out of fashion in popular culture and the ‘pink movement’.