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Businessweek Archives

Barbie: Valley Of The Doll

In Business This Week: HEADLINER


Barbie may be the reigning queen of toyland, but this wasn't her best year. In 1996, the Holiday Barbie had sold out by Dec. 10. But in late January this year, the dolls are still weighing down shelves--despite price cuts. And Mattel saw its $99 Talk With Me Barbie, whose embedded microchip lets her talk about a range of topics, not even make the top-sellers list.

Not that her maker, Mattel, is in trouble. Hot Wheels, Winnie the Pooh, and Tyco Sesame Street characters such as Sing & Snore Ernie sold well. In 1998, Mattel's earnings, before merger charges, should rise 36%, on a 6.6% sales increase.

Still, Barbie, which kicks in 40% of Mattel's sales and 55% of profits, shows signs of age. Sales, which have grown 15% a year since 1990, will be up 11% in 1997. And analyst Gary Jacobsen expects growth of only 5% in 1998.

But this may be something that a little surgery can fix. New, anatomically more realistic Barbies will be on the market this spring. And versions with an updated face are already out.By Kathleen Morris in Los Angeles EDITED BY PAT WECHSLERReturn to top

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HENRY KRAVIS MADE BIG headlines on Jan. 20, when Kohlberg Kravis Roberts announced a deal to buy Regal Cinemas, the nation's second-largest owner of movie theaters. But the acquisition was engineered by one of Kravis' rising lieutenants, Clifton Robbins. A 39-year-old Stanford business school graduate with 11 years at KKR, Robbins is starting to step out from Kravis' long shadow, completing such deals as Stop & Shop, Borden, and KinderCare Learning Centers. To do the Regal deal, Robbins brought in Hicks, Muse, Tate & Furst, which is already buying United Artists Theatre Group. The buyout firms plan to combine KKR's Act III Cinemas with UA to produce the world's largest chain, with 5,347 screens.EDITED BY PAT WECHSLERReturn to top


AFTER YEARS OF HAGGLING, the U.S. and Japan are nearing an air-transportation accord. But Northwest Airlines, the leading U.S. carrier to Japan, is still unhappy. Japan's two airlines would get broad access to the U.S. market. And while American carriers would triple their 46 flights a day, they would face restrictions on forging alliances and setting fares, according to Elliott Seiden, a Northwest vice-president. By giving Japan everything it wants now, he adds, the Japanese will have no incentive to give U.S. carriers more access in the future.EDITED BY PAT WECHSLERReturn to top


NISSAN NORTH AMERICA SUED Republic Industries on Jan. 20 to stop the sale of two Florida Nissan dealerships. But Nissan does not want to declare war. "It is not a parting of the ways," says Nissan spokesman Kurt Von Zumwalt. "We want to do business with Republic." The suit follows a year of unsuccessful negotiations with Republic to limit the chain's acquisition over dealerships. Last year, Republic resolved a dispute with Toyota Motor over dealership acquisitions but still faces challenges by Honda Motor.EDITED BY PAT WECHSLERReturn to top

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