Mattel: Trouble In Toyland
He gave America action toys based on hit films such as Batman and Terminator 2. But President Bruce Stein didn't have the superpower to work with Mattel Inc.'s iron-fisted chairwoman, Jill E. Barad. After two and a half years as Mattel president, the 44-year-old Stein became the fifth Barad lieutenant to quit in the seven years during which Barad has been president or chief executive of the $5 billion toy giant.
According to Mattel sources, tensions between Barad and Stein had been rising in recent months. After differing with Barad on a range of issues, Stein resigned on Mar. 3. The final conflict was said to be over the lack of responsibilities Barad allowed him. Mattel insists the parting was friendly. Stein's position was "eliminated in a reorganization of the top management," a spokesman says.
The news comes at an awkward time for Mattel. After consistent double-digit earnings gains, Mattel delivered a nasty shock to Wall Street late last year when it announced a $500 million revenue shortfall--one month before yearend. The problems included huge inventory cutbacks by Toys `R' Us and weak demand for Mattel wares, mainly cash-queen Barbie. Analysts expect the company to earn $427 million this year, up 20% from 1998 but 13% below 1997. The stock closed Mar. 3 at 24 3/4, down 2.9% for the day and 47% below its 52-week high.
Stein's departure follows that of other Mattel execs who, sources say, left over Barad's demanding management style and unwillingness to listen to bad news. Barad could not be reached for comment. Just three years back, company President James Eskridge left after a power struggle with Barad. The top exec on the Barbie brand left last spring and was just replaced Mar. 3.
As for Stein and Barad, the compettitive friction goes back years. The two worked at Mattel in the mid-'80s, with Barad heading the Barbie brand and Stein the Hot Wheels unit. Stein left for Kenner Products Inc. in 1987. His rehiring by Barad in 1996 surprised some in the industry, although Barad was said to value his marketing savvy. Still, when push came to shove, the action figure was no match for Barbie's protector.