Guess what's sales took a tumble? American Girl!
In a dismal month for Mattel, American Girl only made 8 million dollars- a drop of 30 percent from 2016! Mattel cites the reasoning for the drop as: "Declines driven by lower licensing income and initial sales in the prior year through external distribution channels."
Licensing income is money made from allowing other companies to use your brand name and logo (for example, TV shows like Bizzardvark and books like My Weird School had to go through American Girl to show the dolls/reference the brand, and then AG got licensing income). The other reason, in other words, is that AG did so well during Quarter 3 2016 due to Kohl's and Toys R Us deals.
Here's some interesting tidbits from the conference call:
In addition, as we shared in June, American Girl and Thomas remain in turnaround. Our action plans are well underway, and we expect to see benefit of this in 2018. In the third quarter, American Girl results were particularly stressed by comping revenue from a large partnership deal in the Middle East. Okay. Helpful. And then Margo or Richard or whoever else may be on the call, on American Girl, because there were some decisions that were made previously, Toys "R" Us is one of your distribution partners there. And when it was presented at the time, it became kind of an important partner along with Kohl's. How do we think about an American Girl reinvigoration, as you also have to reduce the exposure of that brand to Toys "R" Us? So, I'll start and Margo can step in on this. But, as I mentioned to you, our objective here is to drive a return to the premium brand positioning of American Girl. And it's not something that's going to be, to some extent, a fix overnight, but there are several programs in place, essentially sort of house style investments, building new consumer relationships, significantly driving new girl engagement with refresh content that we're starting to build, and ultimately ensuring that our products have the premium quality and appeal that they have always had historically. In messaging as well, we're driving new marketing. We're launching a new program called Character Counts, which essentially is the essence of the American Girl narrative. We're working on customer service aspects of both our store and our call-in. And we are also leveraging data collection. And we'll continue to optimize all of the marketing along the path to purchase in the right place to get this back to premium status.
Pray for American Girl! Let's hope the target market gets off YouTube and gets AG dolls!