Falling sales force out Mattel CEO

Published Feb. 4, 2000|Updated Sept. 26, 2005

With the report of another steep loss, Jill Barad resigns, leaving the board to pick up the pieces.

Mattel Inc.'s embattled chief executive Jill Barad, one of corporate America's most visible and accomplished women CEOs, resigned Thursday under pressure after the giant toymaker reported its third disappointing quarter in a row.

Barad, chairman and chief executive of Mattel Inc. for three years, announced her resignation after an unscheduled meeting in New York of Mattel's directors. The board said it was searching for a replacement for Barad and that two directors would serve as top officers in the interim.

The company, based in El Segundo, Calif., has been struggling for the last couple of years to broaden its offerings beyond dolls, cars and preschool toys. Last May, it acquired Learning Co. for $3.8-million to broaden its software and interactive game offerings. But the price proved far too high since the unit not only failed to meet sales projections but dragged down the company's performance.

On Thursday, the downward spiral continued as Mattel reported a steep loss of $18-million for the fourth quarter ended Dec. 31. Its Learning Co. software division also posted additional losses _ $183-million for the quarter. What's more, the problems are not over: Mattel said Thursday that it would take another revamping charge of $75-million to $100-million in the first quarter to reflect continuing problems at the softwaremaker.

"There is nothing I can say to gloss over how devastating the Learning Co.'s results have been to Mattel's overall performance," Barad said Thursday. "Because there must be accountability, I and the board agree that I must resign today as chairman and chief executive and from the board."

Mattel's stock closed down 93} cents Thursday to $10.87{. It hit a one-year high of $30.31\ in April.

Barad joined the company in 1981 as a $38,000-a-year product manager and rose to occupy the corner office in 1997. Barad's departure ends a two-year reign in which she garnered much publicity for transforming the tired, $200-million Barbie line into a $1.9-billion brand.

Only one of four female CEOs to head a Fortune 500 company, Barad also was considered a pioneer among women executives in corporate America. The other female chief executives include Andrea Jung of Avon, Carleton S. Fiorina of Hewlett-Packard and Marion O. Sandler of Golden West Financial.

Dan Lauer, chairman of Haystack Toys in St. Louis, called Barad's work on Barbie "brilliant."

But Lauer said Barad and Mattel failed to recognize the sea changes taking place within the toy industry at the fiber-optic pace of the Internet. He sees Barad's resignation as a broader symptom of toy companies failing to capture the opportunities of e-commerce.

The Learning Co. makes educational and entertainment software that includes "Sesame Street," "Myst" and "Where in the World is Carmen Sandiego?"

"She blew their Internet strategy. She never clearly defined it," said George Whalin, president of Retail Management Consultants in San Marcos, Calif. "She has made a whole lot of mistakes at a company that was literally magical and could do no wrong for a long time."

_ Information from the Chicago Tribune and New York Times was used in this report.