Workers paid for management mistakes one more time as Mattel Inc. (NYSE: MAT) laid off 2,200 people.
Ynon Kreiz, Chairman, the new CEO of Mattel, was left holding the bag by his predecessors. Old product lines and the bankruptcy of a major distributor–Toys “R” Us have killed sales. Revenue fell 14% to $841 million in Q2. Mattel posted a net loss of $241 million. Kreiz was unusually upbeat for the head of a faltering company. However, optimism is part of his job. He commented on the results:
Mattel is a company with great potential. We see a lot of opportunities, but there has been a big discrepancy between our financial performance over the last few years and where the company should be. While the industry is evolving, the toy market continues to grow, and we should be able to reverse our own trends given our strong standing and the quality of our assets. With that said, we are in a turnaround and as expected, had a challenging second quarter driven primarily by the Toys “R” Us liquidation. At the same time, we saw continued strong performance by Barbie and Hot Wheels, and we made substantial progress on our Structural Simplification program to restore profitability and improve productivity in the near-term.
Based on his observation, it is hard to understand why anyone had to leave. However, he has to face the fact that Mattel shares have dropped about 55% over the past two years.
Poor Mattel media executive Alex Clark was left holding the bag with his number and email address at the bottom of the announcement. Kreiz and CFO Joseph Euteneuer decided to pass.