Business Wars Hasbro vs Mattel - The House of Cards | 3
Mar 27, 2019
Mattel is in turmoil after a disappointing launch of its Sizzlers toy line, facing a $30 million sales shortfall and resorting to questionable accounting practices. Meanwhile, Hasbro struggles with declining interest in its classic G.I. Joe and scrambles for innovation amidst rising costs. Both companies reflect the intense competition in the toy industry during a pivotal era, with Mattel's leadership on shaky ground as they navigate ethical dilemmas and market challenges. Will these giants adapt, or are they destined for decline?
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Mattel's Sizzlers Fizzle
- Mattel's Sizzlers, motorized Hot Wheels, failed to meet Christmas sales targets, falling short by $30 million.
- To conceal this, Mattel employed "bill and hold", recording future orders as current sales, and even fabricated orders.
Mattel's First Loss
- Mattel's financial troubles continued, leading to a $30 million loss in 1971, their first since going public.
- Stockholders filed lawsuits, and lenders pressured leadership changes, demoting Ruth Handler from CEO to President.
Mattel's Financial Deception Unravels
- Mattel briefly claimed profitability in 1973, but quickly retracted, announcing a $32 million loss after uncovering overlooked costs.
- This led to a stock price crash, further lawsuits, and an SEC investigation into Mattel's accounting practices.