According to Barbie creator Mattel, higher prices in the run-up to Christmas have not dampened customers’ appetites for toys. Following increase in costs for transportation and raw material expenses, the price of its toys has been hiked by the company.
An 8 per cent growth in sale revenue of the company for the third quarter was reported by the toymaker to $1.8 billion. The firm said that it expects a robust demand and sale of its toys this Christmas season.
The company is working hard to get toys on the shelves of stores despite the issues in supply global chains, said Mattel CEO Ynon Kreiz.
With Covid-19 interrupting the fun functioning of ports resulting in a back up of containers, businesses around the world have been forced to face significant hikes in their shipping expenses.
These issues are also faced by the toy industry, like other industries, Kreiz stated.
“We were impacted by global supply chain disruptions [in the third quarter],” he said. “But we worked through them.”
Price of its plastic toys for consumers will have to be raised by the company because of growing cost of resin Kreiz claimed. He however did not say how much.
Parents had prioritised spending on their children, according to Kreiz.
He added it was “volatile and hard to predict” if shipping and raw material costs would continue to grow.
Higher toy prices, if necessary, and cost savings, he claimed, would “offset the impact of inflation on our business”.
Sale of Barbie dolls and Hot Wheels cars was strong during the third quarter, while there was a 50 per cent hike in sales of action figures for Jurassic World and Masters of the Universe franchises.
Delays at UK ports could result in Christmas shortages, warned The Entertainer, one of the largest toy retailers in the UK, last week. Retailers are concerned about future supply and stocking of products due to a container backlog at ports such as Felixstowe as well as due to an acute shortage of HGV lorry drivers.
Due to port delays, toy stores are warning of shortages during the Christmas season.
Mattel is “doing everything we can… to make sure we have presents on stores,” according to Kreiz.
To keep up with supply, the company has brought forward manufacturing, obtained extra freight containers, and gained access to more ports, he said.
However, he said: “I can’t say we will meet all of the demand.”
But he said: “We do expect a strong holiday season” and for parents and children to have “a happy holiday with lots of toys under trees this Christmas.”
Hasbro, a competitor of Mattel, stated earlier this summer that it was strengthening its shipping capacities and speeding up the process of acquiring its items to prevent pandemic-related supply chain concerns.
Following the earnings report, Mattel stock rose 6 per cent in extended trading on New York.
Barbie has become more varied in recent years, with dolls based on many role models and professions.
This year, the company released a doll modelled after tennis star Naomi Osaka.
Polly Pocket, Magic 8 Balls, Disney Classics, and Fisher-Price are all Mattel brands.
Ruth and Elliot Handler, as well as Harold “Matt” Matson, founded the company in 1945.
(Adapted from BBC.com)