Mattel Q1 Sales Fall as Consumers Cut Spending

Summary: Mattel Inc., the world’s largest toy manufacturer, has recently posted net loss worth $51 million as consumers worldwide has dramatically cut spending on toys as incomes become more indispensable and volatile market continues to haunt the global economy.

Meanwhile, the toymaker giant said that its popular Barbie toy has its sales fell by 5 percent.

Mattel Inc., the world’s largest toy manufacturer, has recently posted net loss worth $51 million as consumers worldwide has dramatically cut spending on toys as incomes become more indispensable and volatile market continues to haunt the global economy.

The toymaker giant said that its share fell by 14 cents from 13 cents last year, with its total revenue slumping by $785.6 million from $919.3 million in 2008.

According to Mattel officials, the slumping sales are caused by massive layoffs which pushed the unemployment rate to reach almost 10 percent in the US.

To prevent further financial deterioration, the company said it will restructure its business and advertising strategies to accommodate consumers’ spending habits especially in times when the economy is in bad condition. With this proposed strategies, the toymaker giant expects it will strengthen its sales in the third quarter this year.

Some experts said that the strengthening dollar against other currencies has also contributed to the massive net loss of the company.

In an interview with Mattel chief executive Robert Eckert, the company has prepared itself with contingency plans that will allow the toymaker giant to cut costs amid financial crisis.

Meanwhile, some analysts said that Mattel’s slumping sales still came as a surprising result as the company has no direct competition in the market, adding that this losses may just be temporary.