Mattel said Monday Chief Executive Bryan Stockton has resigned after three years leading the toy maker, which has struggled to compete as its Barbie and Fisher-Price struggle with slowing sales in a competitive toy aisle.
Stockton will be succeeded by Christopher Sinclair, who was named Mattel’s (MAT) chairman and interim CEO effectively immediately. The announcement also coincided with a preliminary sales report that indicated worldwide net sales slid 7% to $6.02 billion for 2014, with profit for the period stung by the sales weakness, lower gross margins, and costs associated with the company’s MEGA Brands acquisition.
“Mattel is an exceptional company with a great future but the board believes that it is the right time for new leadership to maximize its potential,” said Mr. Sinclair. Sinclair, who has served as a board member since 1996, spent much of his career working for food companies and private equity firms.
Mattel also reported that worldwide net sales slid 6% for the key fourth quarter, which is a critical time for the toy industry. Mattel didn’t give a reason why sales were so weak, but it is likely because of a poor performance for the flagship Barbie and preschool Fisher-Price line. Barbie posted double-digit sales declines for the first three quarters of 2014 and is poised to report its third consecutive annual sales drop when Mattel finalizes its 2014 results. Fisher-Price has also reported a poor performance.
Analysts and toy insiders have said Mattel’s toys haven’t been compelling enough in the toy aisle, even as peers like Hasbro (HAS) and Lego have maintained momentum and continue to report higher sales. In fact, Lego is now bigger than Mattel, knocking Mattel off its top perch last year. Upstart competitors have also taken some business away from Mattel, those insiders have said.
An earlier version of this story incorrectly stated Bryan Stockton was CEO for two years. He served in that role for three years. The story has been updated to reflect this.