Battle of the dolls knocks the stuffing out of Mattel

Mattel, the world's largest toy maker, has revealed that for many of its young customers, Barbie is over the hill. Sales of the dolls slumped 13 per cent in the third quarter, pushing down Mattel's earnings by 5 per cent.

Mattel, the world's largest toy maker, has revealed that for many of its young customers, Barbie is over the hill. Sales of the dolls slumped 13 per cent in the third quarter, pushing down Mattel's earnings by 5 per cent.

As the miniature ideal of womanhood enters her 45th year, children's attention has been drawn to other, trendier dolls, according to analysts. Chief among the new arrivals are Bratz, a multi-ethnic series of dolls created by Isaac Larian, who founded the US-based MGA Entertainment, now billed as the world's biggest privately owned toy company.

Barbie was last month knocked off her perch as the best-selling fashion doll in the UK by Bratz, and retailers expect sales of the rival dolls this Christmas to reflect the growing popularity of the newer ones.

Mattel, which also makes Hokey Pokey Elmo and Matchbox cars, said net income fell to $256m (£142m) from $270m a year earlier. It said its total sales fell 2 per cent to $1.67bn.

Worldwide Barbie sales were down 13 per cent but sales of pre-school Fisher-Price products rose 7 per cent, and American Girl doll sales were up 9 per cent, driven by the opening of a shop in New York.

Separately, Mattel's smaller rival, Hasbro, reported it was also struggling. America's second biggest toy maker experienced a 2 per cent dip in revenue.

Both companies said the retail environment remained "challenging". Robert Eckert, the chief executive of Mattel, said: "We are dealing with broad consumer uncertainty related to higher gasoline prices and a lacklustre employment picture which translates into uninspiring consumer confidence levels."

Mattel and Hasbro attempted to temper expectations about the Christmas season. Mr Eckert said retailers were "less than sanguine" about placing large orders with manufacturers.

A weak Christmas would be a serious blow to the sector. Toy makers and retailers depend on the winter holiday season for most of their profits. About 50 per cent of toy sales are rung up in the fourth quarter alone.

Hasbro said third-quarter net income rose to $88.7m from $85.8m. Alfred J Verrecchia, the chief executive, said third-quarter top-line performance was "disappointing".