By MELISSA T. CASTRO
While the Barbie pop-up shop at Mexico City’s Palacio de Hierro Polanco is drawing hundreds of visitors, all wanting to catch a glimpse of the 30 special edition dolls shipped in for the occasion, Mattel (the company that produces Barbie) is causing pain in the Mexican business sector.
Mattel announced on Wednesday, July 25, that it will be closing all its manufacturing factories in Mexico later this year.
The announcement came as part of a $650 million restructuring plan by Mattel to get the company back on track financially, after its shares have continued to drop in value in recent months.
Mattel’s second-quarter revenues in 2018 plummeted by 14 percent as compared to the same period for the previous year, representing a loss of $240.9 million.
For Mexico, the closure of the Mattel manufacturing plant represents a loss of 2,200 jobs.
Mattel’s Chief Executive Officer Ynon Kreiz expressed his regrets at the closures, but said that the layoffs were necessary to preserve the company’s “creative qualities.”.
Mattel has faced several challenges in the last year.
Sales of its other brands, such as American Girls and Fisher-Price, have registered sales drops of 33 percent and 14 percent, respectively.
The company has struggled to resonate with today’s youth, who have grown up in the electronic era of on-demand experiences.
Mattel has pushed to overcome this issue by creating toys that tailor to today’s Generation Alpha.
Barbie’s career list now includes the new title of robotics engineer and Fisher-Price now has Code-A-Pillar, a coding game for toddlers.
The closure earlier this year of toy retail giant Toys “R” Us left Mattel reeling.
“We were in a turnaround and, as expected, had a challenging second quarter driven by that closure,” said Kreiz.
“Play’s still the thing,” he added, as a way of reassuring that despite the layoffs, Mattel will still be present for this generation and those to come.