Mattel unveils its strategy for its next leg of growth

With its toy business on better footing, Mattel said Friday it is looking to further expand its presence into other segments like consumer products, digital gaming and filmmaking.

The toymaker hopes this strategy will allow it to tap into consumers’ enthusiasm for toys like Barbie, Hot Wheels and Uno, and deliver new ways for kids and adults to experience its brands.

“The first part of the turnaround was to restore and then improve profitability,” CEO Ynon Kreiz told CNBC in an interview. “Making sure the toy company is on solid foundation and strengthen our balance sheet. This has been the focus and we’ve always said the opportunity to capture full value was mid-to-long term.”

On Friday, Mattel will lay out this new strategy in a pretaped presentation for analysts. It is a playbook that many others in and outside of the toy industry have used — take beloved franchises and make them available to consumers across multiple segments.

This strategy has been proven effective. Providing new entertainment content — like movies, television shows or video games — keeps the brand in the cultural zeitgeist, and helps fuel sales of a variety of items, from apparel to housewares.

Take Barbie. The dolls have been on toy shelves for more than 60 years, and yet the brand posted its best full-year sales results of all time in 2021.

“In the case of Barbie, which is about best and shining case study, it’s really about the limitless potential of every girl,” Richard Dickson, president and chief operating officer at Mattel, told CNBC. “We’ve embraced that brand purpose and really marked and managed the brand to truly reflect that in everything that we do.”

Five years ago, Mattel reevaluated its Barbie brand, launching figures with more than two dozen different ethnicities and with a wider range of body types. At the same time it introduced new lines of Barbie dolls that celebrated real women like actress Zendaya, animal activist Bindi Irwin and dancer Misty Copeland as well as offered more career paths in areas like science, politics and business.

“Evolution makes a brand relevant, but purpose makes a brand immortal,” Dickson said.

It is a strategy rival Hasbro knows well, and one that it has recently come under fire for employing.

Activist investor Alta Fox Capital Management, which owns a 2.5% stake in Hasbro, nominated five directors to Hasbro’s board and penned a letter to shareholders, which was distributed Thursday, urging Hasbro to spin off Wizards of the Coast and digital gaming, its fastest growing segment, and asking the company to reevaluate…