A collector's item with a focus on digital detox

The Barbie Phone went on sale as early as August 28, 2024. The pink flip phone, priced at 99 GBP (131.24 USD), offers consumers a retro design like the one used on dolls in 1959 and 1992. The main idea, however, is not just innovation and brand promotion, but more importantly an attempt to reduce the time spent on mobile phones. Many young people are becoming aware of the hours spent surfing social media and are trying to do a digital detox. Therefore, both parties decided to equip the phone with only basic calling and messaging functions and deliberately excluded the possibility of installing social networks. Although the Barbie phone is unlikely to become a commonly used device and will be more of a collector's item, it could be a success. UK sales of the innovation are estimated by analyst firm CCS Insight at more than 400,000 units. Furthermore, the partnership with HMD Global is evidence of Mattel's strategy to diversify its product offering and reach a wider audience.

In addition to the phone, there is also a new Barbie collection

The company is certainly not letting up, and is also celebrating the anniversary with the release of a new collection, which was co-created by five Canadian women-led companies. The collection features more than 100 products, including apparel, accessories and cosmetics, with eight designs inspired by iconic Barbie styles from different decades, each featuring unique elements from Hilary MacMillan, Ai, Paris Jewellers Canada, Cheekbone Beauty and Sol Kyst, with whom they were created in collaboration. By collaborating with these companies, Mattel not only highlights diversity, but also promotes women's empowerment and seeks to increase Barbie's appeal to modern, socially conscious consumers. The collection was launched in mid-August and this strategic partnership not only underlines the brand's image, but is also intended to consolidate its relevance in the current market and open up space for new revenue streams. And Mattel is certainly not stopping there.

Horsepower cars

Another strategic move by the toy giant is the collaboration with the well-known denim manufacturer Wrangler through Hot Wheels toys. After the huge success of last fall's Barbie collection, which became one of the fastest-selling lines in Wrangler's history, the companies are releasing a Wrangler x Hot Wheels collection. The collection cleverly combines heritage and elements of both brands and features a range of products including jackets, jeans and t-shirts that are designed to appeal to consumers of all ages. The apparel is available on the Wrangler website and in select stores for prices ranging from 30 to 150 USD.

The stock has been holding in green numbers for a long time

The launch of the Barbie phone did not have a significant positive impact on Mattel stock.  They even faced a 0.3% drop to $19.45 on opening day. From a long-term perspective, they have gone through a rather volatile period with several significant corrections, but nevertheless, looking at the five-year performance, the company's value is still in the green numbers. For that, the company's stock saw its lowest value in March 2020, when it fell to 7.4 USD per share. Since then, they have risen more than 160%, and are just over 26% away from a five-year high of 26.38 USD.* According to Companiesmarketcap.com, Mattel's market value was 6.61 billion USD at the end of August, making it the first largest toy company. By comparison, the highest market value of the company's stock was more than 16.18 billion USD on the last day of December 2013*.

Mattel's share price development over the last 5 years (Source: Google Finance) *

An optimistic outlook despite a decline in sales

The above-mentioned collaborations show that Mattel remains a strong player in the market and its iconic brands still arouse consumer interest, but on the other hand, Barbie's sales figures are not very satisfactory. In the second quarter of 2024, the company's net sales declined slightly by less than 1% and sales of the Barbie brand decreased by 6% compared to the same period last year. However, Mattel remains optimistic about the rest of the year, especially in light of the Christmas holidays, when it plans to strengthen through more new products, better marketing and sales promotions.[1]

Olívia Lacenová, principal analyst at Wonderinterest Trading Ltd.

* Past performance is no guarantee of future results

[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or the current economic environment, which may change. Such statements are not guarantees of future results. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.