By Joann S. Lublin and Paul Ziobro
Mattel Inc. named Christopher Sinclair as its permanent chief
executive, selecting a longtime board member to steer the toy maker
through the early stages of a turnaround.
The company also elevated Richard Dickson, who had been chief
brands officer, to president and chief operating officer, giving
him a possible inside track to eventually succeed the 64-year-old
Mr. Sinclair.
Mr. Sinclair, a former senior PepsiCo Inc. executive who has
served on the Mattel board since 1996, was named interim CEO and
chairman in January following the resignation of Bryan Stockton,
who oversaw a two-year tailspin at the world's largest toy company
by sales, especially among its largest brands like Barbie and
Fisher-Price.
The appointments come at a difficult time for the toy maker,
which is losing ground to rivals as its sales and profit slide.
Mattel's creative department has been slowed by layers of
bureaucracy, meetings and time spent on lengthy PowerPoint
presentations.
Shares of Mattel have lost 44% of their value in the past 12
months. Its market value this week fell below that of competitor
Hasbro Inc. for the first time since 1993.
Shares of Mattel fell 43 cents to $22.65 Thursday.
"We still have challenges and lots of work to do," Mr. Sinclair
said in a statement. "The board and management are focused on
achieving a rapid turnaround."
Despite the difficulties, the company hasn't turned to an
outsider. Mattel in January elevated two internal candidates, Mr.
Dickson and Chief Commercial Officer Tim Kilpin, naming them
president of their divisions. But in the end it tapped its
longest-serving board member to take on the CEO job.
Mr. Sinclair doesn't have managerial experience in the toy
industry. After losing a four-way CEO succession race at PepsiCo in
early 1996, he became chief of its global beverage business.
After leaving, Mr. Sinclair ran the supermarket chain Quality
Food Centers Inc. until it was later sold. His deep background in
the food industry jibes with that of Mr. Stockton and his
predecessor, Robert Eckert, who both spent two decades at Kraft
Foods before getting into toys.
Mr. Dickson, 47, will continue to steer the creative side of the
business and will now oversee commercial operations. Mattel wooed
Mr. Dickson back last May, a move that deepened the company's bench
of potential CEO candidates and put a seasoned brand champion in
the C-suite.
Mr. Dickson earlier had led a revival of the Barbie brand before
leaving for a top job at apparel company Jones Group Inc. in
2010.
His evaluation for a higher role was interrupted by a disastrous
holiday season for Mattel, as sales fell 5.6% in the fourth quarter
amid a misplaced plan by Mr. Stockton to delay marketing until
closer to Christmas. That move was further hampered by poor
execution after Mattel didn't promote the same products in stores
as they did on television.
After presenting the results Mr. Stockton abruptly resigned and
Mr. Sinclair became interim CEO.
Mr. Dickson has quickly left his mark on Mattel in his short
time back. Last year, he reorganized the creative team and put the
largest toy brands into separate business units. He has also
created a division called the Toy Box that has more leeway to take
risks and develop toys the way a startup would.
At February's International Toy Fair in New York, Mr. Dickson
showed off two products seen as changing the way of doing business
at Mattel: a modern version of the View-Master that incorporates
virtual-reality technology from Google Inc.; and Hello Barbie, an
interconnected version of the doll that understands and responds to
speech. Both are examples of working faster and incorporating
technology into its products, two knocks against the company in
recent years.
Mattel in the past has used the chief operating officer position
to groom a new chief. Before Mr. Stockton became CEO in 2012,
Mattel promoted him to the newly created role of chief operating
officer, essentially anointing him the soon-to-be successor.
Mattel faces other questions, too. The most immediate among
them, for investors, is the future of its dividend payout. Several
analysts expect the company to cut it soon, given that Mattel
executives have favored a payout of around 60% of prior year
earnings.
With the business suffering, Mattel has said it needs to spend
more on research and development to try to stage a comeback.
"The turnaround plan is likely to require some cash investments,
and not cutting the dividend may seem unrealistic," Needham &
Co. analyst Sean McGowan wrote in a research report this week.
At $1.52 a share, Mattel's annual payout is higher than its
entire per-share profit generated last year. Its dividend yield of
6.7% is also the fifth-highest yield among S&P 500 components,
according to FactSet Research, though that is chiefly due to the
big stock decline over the past year.
Write to Joann S. Lublin at joann.lublin@wsj.com and Paul Ziobro
at Paul.Ziobro@wsj.com
Access Investor Kit for Google, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US38259P5089
Access Investor Kit for Google, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US38259P7069
Access Investor Kit for Hasbro, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US4180561072
Access Investor Kit for Mattel, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US5770811025
Access Investor Kit for PepsiCo, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US7134481081
Subscribe to WSJ: http://online.wsj.com?mod=djnwires