After barely more than a year heading up troubled Mattel, tech executive Margo Georgiadis is taking the helm at Ancestry, the genealogy company. Entertainment executive Ynon Kreiz, a board member who was already tapped to become chairman of the company next month when former CEO Christopher Sinclair steps down, was named to replace her as news of Georgiadis’ impending departure broke in the Wall Street Journal yesterday.
The WSJ’s lede characterizes the transition as “a surprising shake-up at a company searching for a strategy that can end a four-year sales slump.”
Dana Cimilluca and Paul Ziobro observe that the “maker of Barbie dolls and Hot Wheels cars has been struggling to adapt to a fast-changing industry where online content and movies are increasingly critical in capturing children’s attention. It also faces growing competition from smartphones, and had to cope with a shift to online shopping and the demise of traditional retail outlets like Toys R Us, which filed for bankruptcy last September and is liquidating its U.S. stores.”
Indeed, “Toys R Us was Mattel's second-largest customer and accounted for between 15 to 20% of U.S. sales. Without these toy stores, Mattel will have to find other ways of showcasing its products either by going online to marketplaces like Amazon or by squeezing into big box stores,” observes CNBC’s Sarah Whitten. “Only Walmart sell more Mattel products,” reports CheatSheet’s Lizz Schumer.
The Los Angeles Times’ James F. Peltz reports that Georgiadis “tried to bolster Mattel by narrowing its focus to enhance Barbie, American Girl and its other core brands while streamlining its operations and slashing costs to match its lower sales. That included eliminating the company's dividend. But Mattel lost $1.1 billion last year as sales fell 11% to $4.9 billion, excluding currency fluctuations” and including a charge related to U.S. tax changes.
The 53-year-old Kreiz “is the former chairman and CEO of Maker Studios, acquired by Disney in 2014, and exited the YouTube-oriented digital content network in January 2016. Disney ended up paying $675 million for Maker — below the $950 million maximum potential price tag — and Maker is now part of the media conglomerate’s new Direct-to-Consumer and International business segment headed by Kevin Mayer,” Variety’s Todd Spangler writes.
“It appears that the Mattel board is betting that Kreiz, with his history in entertainment, can turn things around,” Global Toy Experts CEO Richard Gottlieb tells Reuters’ Aishwarya Venugopal and Karina Dsouza.
“Ynon has tremendous expertise across areas critical to our strategy, including digital, media and entertainment, and we have already benefited from that experience and his compelling vision for the company since he became a director,” chairman Sinclair says in the release announcing Kreiz’ appointment affective April 26.
“From 2008-11, he served as chairman and CEO of Endemol Group, one of the world’s largest independent TV production companies, and before that was a general partner at venture-capital firm Balderton Capital (formerly Benchmark Capital Europe) from 2005-07. Earlier in his career, Kreiz co-founded and was chairman/CEO of Fox Kids Europe [rebranded by Disney as Jetix in 2005 and now known as Disney XD], which distributed pay-TV channels in 50-plus countries,” Variety’s Spangler writes. His undergraduate degree is from Tel Aviv University; he has an MBA from the Anderson Graduate School of Management.
Kreiz’ tenure at Endemol Group was not without controversy. When he stepped down from the company in June 2011, Nikki Finke wrote for Deadline Hollywood that “a key insider at Endemol” told her: “I think there were issues in the way he ran the company and the decisions he made, and he lost the support of many of the employees. Like when you have a coach of a soccer team the players don’t buy into the way he’s managing the team.”
His departure there followed “a three-year period of massive dealmaking and restructuring,” Finke continues. And dealmaking may be in his future, too, if one large Mattel shareholder has his way.
“We think Mattel is a great company with great brands,” Ariel Investment LLC vice chairman Charlie Bobrinskoy, which owns about 3% of Mattel’s shares outstanding, tells WSJ’s Cimilluca and Ziobro. “We think there would be huge synergies in a merger.”
The 54-year-old Georgiadis, meanwhile, succeeds Howard Hochhauser, who has served as interim CEO while the Ancestry board conducted a six-month search for a permanent CEO. Tim Sullivan had stepped down after 12 years as CEO last October; he is now chairman of the board. Hochhauser will return to his role as Ancestry’s CFO and COO.
Ancestry has sold about 10 million AncestryDNA kits to date and generated more than $1 billion in revenue last year, an annual increase of more than 3%, according to a news release announcing Georgiadis’ appointment.
Before Mattel, Georgiadis was president, Americas at Google for six years. Heading a company that excels at looking backwards may prove to be a lot less troublesome for her than steering one trying to figure out the future.