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Things are going good over there at Mattel. So good in fact that 4Q profits are up and the new brands are performing strong. All of this will be capped off by a price hike later this year… Say what? That’s the strange and (greedy?) philosphy over at the house of Barbie and hopefully something that won’t directly cause toy collectors problems. Mattel has said that they will be RAISING prices across the board. The usual are being blamed, packaging costs and the cost of Chinese labor as the main reasons for the markups.
Speaking from the Nuremberg International Toy Fair, chief operating officer Bryan Stockton told Sky News that Mattel will be looking at reducing costs but also increasing prices in the coming year. Worldwide sales grew 9% in the three months to December 31, with Barbie and American Girl leading the way.

Barbie sales in the UK surged 35% in 2010, but the only Mattel toy to make it onto the Christmas top-ten sellers list was the Toy Story 3 Jet Pack with Buzz Lightyear. Mattel’s new licenses with Thomas and Friends and World Wrestling Entertainment also have performed well.

The company said inventory increased compared with a year ago, when the company held back due to uncertainty about the economy. Mattel, facing rising costs for resin, packaging, labour and shipping, as well as the strengthening Chinese currency, plans to raise prices in the second quarter by mid- to high-single-digit percentages.

It is also spending “at a pretty high rate” on its long-running litigation MGA over the Bratz doll property. The second round of a copyright infringement case should last three or four months.

For the year, Mattel Inc., based in El Segundo, Calif., said net income rose 30 per cent to $684.9 million, or $1.88 per share, while revenue rose 8 per cent to $5.86 billion.

Yes, you read correctly. Mattel is actually making MORE money and had a 4th Quarter rise in profits. This is believed to be even better than Hasbro, which is rumored to have a slight decrease in profits for the quarter… Although they won’t post that financial news until Monday.

So how is it that new properties like Toy Story, WWE and Thomas the Tank are doing so well, but price increases are coming? Apparently Hot Wheels was down and that’s a big chunk of Mattel, as well as the Bratz lawsuit going on forever. Fisher-Price is supposedly doing well, but whether that offsets the dip in Hot Wheels, I don’t know.

Price hikes is the absolute LAST thing I want to hear from Mattel, though. I guess we’ll see if it causes problems for popular “collector” brands, or if these price increases will mostly hit the backbone corners of “kids” toys. Of all the collector oriented properties, I would think the WWE would be the least affected as it obviously has larger and stronger sales than DC or MOTU.

None the less, put on your tin foil caps and stock up on Snausages, because it’s a toy price hike Armageddon!

14 Responses to Mattel Profits Up = Price Hike On Toys?!

  • Joseph Tages says:

    At this rate, DCUC will soon reach $20@ just like MOTC. And those will go up in turn, pricing many more folks out of their subscription range.

    It sucks.

  • clark says:

    I know that the price increase with DCUC from $9 to $12 to $15 made me go from buying almost every figure I could find, to almost none at all except the occasional must own (like Martian Manhunter).
    Same thing with MOTUC, Vikor just cost me $31 with shipping and tax, which means I might get BA Skeletor, but definitely none of the other announced figures.
    If prices go up on either of these properties again then I'll be completely out off of them.
    On the bright side for Mattel, I have started buying Hot Wheels. But if they go up from $1 to $1.50 you can count me out of that too.

  • I can't imagine DCUC going up much more and being any sort of a success. I think the Green Lantern movie will either make this a great year for DCUC (Sales and such to tie in with the GL toys) or a total disaster (if the movie and or toys fail) and could determine the future of that line.

    If any of this price hike gets shifted onto MOTUC, I'm out. To me, that's a separate entity to Mattel's general business strategy and there's no plausible way that it doesn't cost out already with several bucks to spare. Despite what the naysayers may, uh, say.

  • I'm so glad I got out of DCUC relatively early on. I do occasionally see figures that I want, but I haven't bought anyone since that first DCUC 5 pack (I think) and I'm content with a non-complete collection. Between trying to hunt the figures down and the constant price raising, I just can't in good faith give money to the line.

    I feel like we're bankrolling the damn Bratz lawsuit. I'm sure there's lots more at play here, but CEO jets and trying to force all other girl's dolls out of the market have to be part of the problem. I'm just blown away that Mattel of all companies is talking price increases.

    I'd much rather take that extra $15 a figure that I would normally spend on DCUC and chuck it away to spend on imports or something different.

  • Rexplode says:

    I'm pretty secure in my belief that the MOTUC prices can't legally go up this year, at least not for people with subs. Next year is probably going to be a whole new bag of cats though…

  • wesitron says:

    I've almost completely cut out Mattel at this point. More than any other, they seem to be the company that tries to lean on collectors the most, focusing less on what the items are worth and far more on what they can get collectors to pay. I haven't bought a MOTUC in months and the only figures I've bought from DCUC in the last few months were Raven and MM because of that KMart sale.

    DCUC has been the hardest to quit, but raising the price 4-6 bucks in just a few years is absolutely ridiculous. For supposedly being the largest toy company in the world, they sure know shit about making toys.

  • I suppose they're the biggest because they're making the most money, haha. Of course they make that money by conning collectors into spending it.

    I think that's one of their big edges. They know what collectors want and by understanding that market, they realize how much they can pine it for profits. Of course Barbie, Hot Wheels and the like are still their bread and butter.

  • That's a good point. I wonder if they won't jack the prices up on MOTUC for non-sub people and use it as an excuse to convince people "this is why you need the subscription"…

    Though I still doubt this will trickle down to MOTUC.

  • Philip Reed says:

    I think Mattel's real money comes from their Barbie, Fisher-Price, and more mainstream accessible lines. I doubt the collector lines — especially MOTUC — have much of an impact on that $600+ million dollar year.

    MOTUC is either making significant cash OR someone high-up at the company has a love for the line, though, because I suspect they could make more money be redirecting those resources to a toy line that is sold through their standard distribution chain. Of course now that I think about it another reason to keep MOTUC going is completely about keeping the trademarks in use and a vehicle to (hopefully) show a studio that the property is still a viable candidate for a blockbuster film.

  • There's no doubt that the lion's share of their profits come from Barbie and Hot Wheels. As I understand it Fisher-Price had been under performing prior to this quarter. WWE is their big boys brand, far and away more a priority than DC or MOTU. However, I do think Mattel is making good profit on their ability to manipulate collectors.

    That's not a bad thing. Mattel is smart in that sense, catering to this demographic. It may not mean much to their bottom line, but it's a nice bit of icing on the cake.

  • wesitron says:

    True, and if it wasn't for the hardline commitment to the buck system, I'd be a little easier on them. For instance, I think their WWE Legends line is amazing, even though I'm not a wrestling fan. The sculpt and articulation are just great and I find myself wanting those larger than life characters from the 80's more than ever. DCUC just spent a long time not really improving on itself, using the same bodies over and over again and for me at least seemed to be stagnating. They're making some improvements now, but that price tag is still murder. MOTUC I probably won't buy too much more of just because of their hatred of 200X fans, which I am. The original series was before my time, so I have very little nostalgia for the brand, I just want the characters I love so much from the 2000 show, which for some reason Mattel hates so much that they won't even toss in a variant head from time to time. Sadface.

  • Roglei Uhlefi says:

    Well not being a completist, it doesn't really matter to me if they hike the price.

    Now if they made figures of DC classics that I'd want to see, then we'd have a big problem.

    But the way the figures are being mixed up and stagnated for the next few years (rumor is the contract got extended with Warner Bros past 2012), it could be quite the epic wait.

    Same thing goes for Masters Classics which I'm sure you've heard it a million times over.

    The DC animated merch I could care less about. The figures are done out of scale plus who wants to buy from figures from terribly written animated series like Young Justice. Green Lantern's CGI series might be good, but I'm not holding my breath and there's rumors of a darker animated series after the last Nolan movies comes out in 2012. I could stand animated figures of some good DC movies like Crisis on Infinite Earths but the window has obviously passed.

    I have no interest in DC Movie Masters merch and but these figures would need to be absolutely mindblowing. *Coughs* Watchmen. Not seeing this happening but Man of Steel gives me some hope. and what the possibilities of what they could do with a Flash movie after 2012 are wide open. But these are still quite a few months away.

  • Henry says:

    If they're concerned about packaging costs, why have they just bumped the air content of DCUC boxes up 50%? It's not like this is marvel universe, where the space is needed for the occassional plus size figure like the Juggernaut, and the BAF's aren't getting bigger. It doesn't make them look like better value either, since the box is still as devoid of content as a tabloid newspaper.

    I don't understand Mattel. Sometimes they seem to be out to maximise profit, but the then turn around and dig into that profit by doing something really counterproductive.

  • The Castellan says:

    They just want more money.

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