Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : MAT - Mattel - toysRthem -- Ignore unavailable to you. Want to Upgrade?

To: Grainne who wrote (48)	6/18/1998 10:05:00 AM
From: Zoltan!	Read Replies (1) \| Respond to of 706

>>Well, Duncan, I guess my first question would be why Toys R' Us is selling fewer Mattel products. R' Us is losing share overall. They are reducing inventory levels to improve their performance. Mattel had actually been less severely impacted than its competition. It is nice to see that Mattel seems to be leaving the company alone, at least. I am a little concerned about Mattel's foray into the internet and away from retail stores, because I think there is a real impulse factor in the sales of their products. The child walks by a Mattel toy, likes it, and appeals to a parent, who agrees to buy it because it is not very expensive. This is not a purchase that would ever be made if the toy had to be ordered. Precisely. Your own logic tells you that $695 toys are not impulse purchases.

To: Grainne who wrote (48)	6/18/1998 11:26:00 PM
From: Mark Marcellus	Read Replies (1) \| Respond to of 706

<<I don't know exactly how to describe the market for [American Girl] without sounding elitist, but while some girls who played with Barbie as little girls end up owning these later, there is much of the Barbie market that could not afford them at all. >> Christine, I wouldn't underestimate the potential benefits to Mattel of having Pleasant on the payroll. Keep in mind that her pricing and strategy up to this point have been driven by the reality that she had to find a niche where she could effectively compete against the major players. The high cost and high quality, coupled with Pleasant's considerable marketing skill, is what protected her niche and made it impossible for the big companies to encroach on her turf. Given the resources available to her at Mattel I have no doubt of her ability to compete in the mass market if given the opportunity. This was also a logical time for Pleasant to sell. For the reasons you've mentioned, she would have been unable to continue at the same rate of rapid growth her company has experienced to this point. She could have settled down as the CEO of a modestly growing niche company, but obviously she's chosen not to go that route. There are still many questions, as there always are in a merger like this. Will Pleasant be able to function effectively in a large company? Will Mattel be willing and able to manage the transition of selling into new channels? Will the Pleasant Company be able to become part of the Mattell family without losing its identity and purpose? Regardless of how all of the above issues work out, this is a great deal from the point of view of a Mattel shareholder. At worst, MAT has made an acquisition at just over 2 times sales which will easily pay for itself, barring a major screwup. The mailing list they get for free. FWIW, Mark