Mattel's Board Starts Search for Next CEO
03 November 2016 - 9:50AM
Dow Jones News
Mattel Inc.'s board has started preparing for a CEO transition,
hoping to avoid the difficulties the toy maker had the last time it
changed leaders.
The biggest U.S. toy company hired the search firm Spencer
Stuart this summer to help identify the successor to CEO
Christopher Sinclair, according to people familiar with the matter.
The recruiter is looking inside and outside the company for the
next Mattel leader, the people said.
The board's timeline for making a transition is unclear; Mr.
Sinclair has said he plans to see the company through its
continuing turnaround effort. Corporations often engage with
recruiting firms for long-range succession planning.
"We don't comment on rumors or speculation," Mattel spokesman
Alex Clark said. A Spencer Stuart spokesman declined to
comment.
Mr. Sinclair, 66 years old, was a retired consumer products
executive and Mattel board member when he took command of the
company in January 2015. He stepped in on an interim basis when
Mattel fired his predecessor amid slumping sales of Barbie and
other big brands. He was named permanent CEO three months later,
passing over internal candidates.
The current search raises questions about the future of Mattel's
No. 2 executive, Richard Dickson, who was named president and chief
operating officer when Mr. Sinclair took over. Mr. Dickson, 48,
steered an earlier turnaround of Barbie before leaving for a senior
role at apparel chain Jones Group Inc. He returned to Mattel in
2014. Mattel had in the past used the COO role as a steppingstone
to the corner office. Mr. Dickson declined to comment.
Both Mr. Sinclair and Mr. Dickson are expected to discuss the
company's strategy and financial targets at a meeting with
investors at the company's El Segundo, Calif., headquarters on
Thursday.
Toy industry executives and analysts didn't expect Mr. Sinclair,
who has kept his primary residence in Florida and commutes to
Mattel's headquarters in Southern California, to hold the CEO
position for too long. Mr. Sinclair served as a senior PepsiCo Inc.
executive in the late 1990s, and though he'd been on Mattel's board
for nearly two decades, he didn't have any experience in the toy
industry.
Mr. Sinclair has thrown himself into the role of stabilizing
Mattel's operations. Working closely with Mr. Dickson, the company
has reversed a long slump in sales at Barbie by adding new body
sizes and more diverse skin tones. Barbie sales had fallen more
than 10% for eight straight quarters before bouncing back with
sales up 23% and 16%, respectively, the past two reporting
periods.
Mr. Sinclair also has worked to deepen Mattel's management
bench. It hired a new head of human resources, brought in a new
marketer to oversee global brands and added a chief content officer
to lead the creation of movies and shows that are integral to
selling toys.
In addition, he has kept a tight lid on costs and has preserved
Mattel's dividend.
"This is not the board guy who's just trying to keep the seat
warm," one toy industry executive said.
The turnaround has involved mending a corporate culture that
current and former employees felt was in disarray, with days bogged
down by endless meetings and lengthy PowerPoint presentations. Some
minor changes since the regime change have been cheered by
employees, including allowing them to use social media sites at
work.
While some brands, like Monster High, continue to struggle,
Mattel has largely met carefully laid out investor expectations.
Its sales have exceeded expectations in each of the past four
quarters, and it has been able to plug the hole from losing a
coveted license to make dolls based on Walt Disney Co.'s classic
princesses and characters from the movie "Frozen."
Mattel's rebound has corresponded with two of the strongest
years for the toy industry in decades. The research firm NPD Group
projects that toy sales will rise 6.5% this year, slightly below
last year's pace that was aided by the first "Star Wars" movie in a
decade.
Mattel investors have been rewarded, as shares—which closed
Wednesday at $30.90—have bounced back from a recent low of
$19.45.
Write to Joann S. Lublin at joann.lublin@wsj.com and Paul Ziobro
at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
November 02, 2016 18:35 ET (22:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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