Mattel Takes Back Disney Princesses From Hasbro — Will the Deal Boost Stock Price?

Mandatory Credit: Photo by Toby Talbot/AP/Shutterstock (6273869c)Barbie dolls sit on the shelf at Woodbury Mountain Toys in Montpelier, Vt.
Toby Talbot/AP/Shutterstock / Toby Talbot/AP/Shutterstock

Elsa, Anna, Jasmine, Ariel, Snow White, Mulan, Cinderella and all their friends are returning to Mattel, and Wall Street thinks this bit of business news is just magical.

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In a move that could tip the balance of power in the toy industry, on Jan. 26 Mattel revealed it won the license to make toys based on The Walt Disney Company’s princess lineup, pushing the California-based stock price higher in early trading.

It was a huge win for Mattel, which lost the Disney license to arch-rival Hasbro in 2016 and has struggled to find its footing ever since. Mattel will begin selling new Disney toys in 2023, CNBC reported. The business will be managed by the same group that oversees its Barbie franchise, bringing together that iconic brand with the equally iconic “Frozen” and Disney princess brands. Financial terms of the deal weren’t disclosed.

Mattel shares surged more than 8% in pre-market trading on Jan. 26, helping to reverse a month-long decline that mirrored the broader stock markets. Hasbro’s share price was down about 1.6% early that same day.

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Mattel’s new licensing deal builds on its existing licensing relationship with Disney for Pixar Animation Studio’s “Toy Story” and “Cars” franchises, as well as its new global licensing agreement for “Lightyear.”

“As the worldwide leader in dolls, we look forward to bringing our unique Mattel Playbook approach to brand management, product and marketing expertise,” Mattel president and chief operating officer Richard Dickson said in a statement, per CNBC.

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Pandemic Continues to Hurt Toy Business

The new licensing deal comes during a period of dueling dynamics in the toy industry. On one hand, toymakers benefited from the “play from home” trend that began during the COVID-19 pandemic, with more kids stuck at home with their parents. But more recently, the combination of inflation, labor shortages and global supply-chain disruptions have led to higher production costs and a scarcity of raw materials.

This has made things tricky for investors, as both Mattel and Hasbro have experienced choppy stock performances over the last year even as the broader markets moved higher.

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Hasbro has had the edge over the past decade, according to a recent SeekingAlpha blog from Harold Vogel, CEO of Vogel Capital Management. He pointed to Hasbro’s strong brand lineup, which includes Play-Doh, My Little Pony, Nerf, Baby Alive, Star Wars and the recently added Indiana Jones.

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But Vogel added that “the relative investment attractiveness of the two companies have swapped places. Mattel finally appears to be in a better position than Hasbro.”

Vogel expressed this sentiment before Mattel won back the Disney princess franchise, it’s worth noting. With that franchise on board, Mattel is likely in an even stronger position moving forward.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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