He not only didn’t come up with any breakout products and failed to help Barbie get her groove back this holiday season, it appears that Bryan Stockton’s ban on meetings without a purpose didn’t do much to change the lethargic culture at Mattel either. He resigned as chairman and CEO over the weekend and Christopher Sinclair, who has been on the Mattel board since Tyco’s Tickle Me Elmo was the top toy of the year — that’s 1996 — took over his duties on an interim basis.
“According to current and former executives, Mattel’s executives needed to be thinking up better toys. Instead, they became entangled in a culture that valued endless meetings and long PowerPoint presentations,” Paul Ziobro and Chelsey Dulaney report in the Wall Street Journal.
Stockton apparently didn’t get out much either, the photo at the top of the WSJ story of him playing with Hot Wheels an event in December notwithstanding.
“Some retailers found that Mr. Stockton wasn’t as involved in toy selection as counterparts at rivals such as Hasbro and Lego,” Ziobro and Dulaney write. “He rarely accompanied retailers on tours of Mattel’s showrooms that showed off products for the coming year, according to former Mattel executives and retail executives.”
“Mattel's innovation problem can partly be blamed on a bureaucratic culture that unwittingly stifled creativity — the lifeblood of toy firms,” writes Shan Li in the Los Angeles Times. “The 61-year-old Stockton, who earned $15.5 million in 2013, has been described as smart and affable but lacking a leader's charisma.”
But, in the end, it was all in the numbers, of course. Worldwide sales dropped 6% in the critical fourth quarter, the company said yesterday in releasing preliminary figures. A conference call with analysts to discuss final results for the quarter and fiscal year is scheduled for Friday at 8:30 a.m. and will be webcast live at the Mattel corporate site.
Stockton’s end has been nighing for Stockton for a while despite efforts such as bringing back Richard Dickson from Jones Apparel to be chief brands officer last May. He was promoted to president, CBO earlier this month and Tim Kilpin was named president, chief commercial officer.
“Dickson oversees design, development and consumer insights and previously ran Barbie during her heyday, while Kilpin handles sales and marketing operations globally,” Fortune’s John Kell reports. They are considered the leading internal candidates for the CEO position but chances are good, observers feel, that an outsider will be chosen.
“I think it’s probably a 50-50 shot that it’s somebody from the outside,” BMO Capital Markets analyst Gerrick Johnson tells the New York Times Rachel Abrams. “The risk of bringing someone in from the inside is they have been exposed to that culture so long they don't know how to change it,” Jason Moser, an analyst at the Motley Fool, tells the LAT’s Li.
“On Stockton’s watch, profits sagged and some of Mattel’s most iconic toys struggled to remain relevant,” writes Sarah Halzack in the Washington Post. Sales were down 16% at Fisher-Price in the third quarter and 12% for Barbie.
“Even American Girl, which has been a bright spot, reported a sales drop in the third quarter,” reports Li. “In September, Mattel lost its long-held mantle as the world's biggest toy company to Danish rival Lego.” In addition, Disney announced in September that it was moving its Princess line to Hasbro starting next year
“Mattel is an exceptional company with a great future but the Board believes that it is the right time for new leadership to maximize its potential,” Sinclair said in a statement yesterday. Besides holding “leadership roles at prominent venture capital and private equity firms,” Sinclair was chairman and CEO of Caribiner International from 1999 to 2000, president and CEO of Quality Food from 1996 to 1998 and had been a senior executive at PepsiCo earlier in his career.
“Based on the performance and the lack of compelling product over the last two years, it’s not a surprise that they’ve made the change that they’ve made,” BMO Capital Markets’ Johnson tells the NYT’s Abrams. “I think with this announcement, it kind of clears the decks. It’s like, ‘Okay, here’s the bad news, the bad news is out.’”
Now all that’s missing is the good news of a hit new — or aging product or two.