• Retailers have been slashing prices amid poor reviews
  • Silver lining is the buzz doll created for struggling brand

Mattel Inc. Chief Operating Officer Richard Dickson is hoping to shake loose the innovation and creativity the toymaker needs to revive sales. A talking Barbie doll hasn’t been much help.

Introduced in November, Hello Barbie generated the most buzz the toymaker has received in years, if not decades. But for the most part, it’s been a dud. Online reviews highlighted problems like a malfunctioning charging station and a shaky Internet connection. On Amazon.com, 57 percent of reviews gave it one star out of five. And major retailers have slashed its $75 list price, with Wal-Mart Stores Inc. cutting it to $52.49.

“The sell-through was so-so, but it generated a lot of publicity and made Barbie relevant,” said Jim Silver, editor of toy review site TTPM.com.

Dickson, who was anointed Mattel’s savior after arriving in 2014, hasn’t been shy about shaking up a company many critics said had become stodgy and boring. With annual sales of about $1 billion, Barbie has been his primary focus. That’s because until the world-famous doll recaptures the attention of today’s kids, Mattel’s turnaround will remain in doubt.

Wider Hips

The revamping of the flagship doll has included adding versions with darker skin and wider hips. Both were intended to counter longstanding gripes from advocacy groups that the Barbie line portrayed unrealistic body types and didn’t cater to minorities.

So far, Dickson’s changes have been paying off. Mattel thrilled investors in February when it reported a better-than-expected fourth quarter as Barbie increased sales for the first time in more than two years. Another test of the turnaround will come after the market closes on Wednesday, when Mattel reports first-quarter results. Analysts on average are expecting a net loss of 13 cents a share and revenue to decline about 7 percent to $861 million.

Mattel’s miss with Hello Barbie isn’t all bad, said Silver. The company didn’t make a big bet on the product, shipping only an estimated 10,000 units, compared with 250,000 for a hit toy, he said. The doll, powered by artificial intelligence similar to the technology used by Apple Inc.’s Siri software, also garnered the brand plenty of headlines and thrust it into technology media for the first time.

“I always looked at Hello Barbie as a prototype car,” Silver said. “You create prototypes to create buzz.”

Pushing Boundaries

While Mattel wouldn’t say whether it’s making another version of the doll, it does plan to bring new toys with artificial intelligence to market.

“Hello Barbie is representative of Mattel’s relentless goal to push boundaries and question limits,” Alex Clark, a spokesman for El Segundo, California-based Mattel, said in an e-mail.

In addition to generating publicity, Hello Barbie drew criticism when it was unveiled in February 2015. One group, the Campaign for a Commercial-Free Childhood, said its Web connection and speech-recognition software had the potential to violate children’s privacy. Others raised concerns that it could be hacked, possibly exposing children to criminals. Mattel responded by saying there were safeguards in place, and released the doll nine months later.

“With how much it was in the news, it made Barbie a topic of discussion again,” Silver said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE