Following Mattel’s financials struggles this year, Hasbro has now made a bid to acquire its major competitor in the toy market. A buyout that would increasingly consolidate the major players in the toy industry. Mattel has struggled to revive some of its fading brands like Fisher Price, Barbie, and Hot Wheels. Just like every other retail industry, the unprecedented growth of e-commerce and the changing habits of consumers have affected the toy industry. The toy industry has also been affected by the changing playing habits of children, who have begun to forego their toys for electronic alternatives like tablets. Mattel’s stock has fallen 52% over the past year, and now has a market value of only $5 billion. On the other hand, Hasbro has seen an 8% increase in its stock, and is now valued at $ 11.4 billion.
The Toys R Us bankruptcy last month also hit Mattel hard too. The drop in sales for the toy retailer had long reaching effects that drove Mattel’s sales down too. To add on to Mattel’s struggles, Toys R Us owes the toy distributor $135 million, more than half of what it owes to Hasbro. It isn’t the first time a major acquisition has been proposed in the toy industry. About 20 years ago Mattel sought to buy out Hasbro, but was rejected stating antitrust laws. And the same issue will most likely arise this time around too. Regulatory issues may well be the largest hurdle that will have to be overcome if the 2 dominant toy-makers move forward with this deal. It seems that more and more we hear about struggling businesses as e-commerce continues to grow. We are at a pivotal point in time where many of the consumer habits industries are familiar with are changing, and those that aren’t prepared like Mattel and Toys R Us, are being left behind. So the question now is are you making changes so that your business can continue to thrive and not take a nose dive as times change?