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Girls and parent chaperones made their way through 40,000 square feet of ritzy real estate devoted to American Girl, Mattel’s crown jewel luxury doll. The maker of Barbie is trying to resurrect its glamour, seeking to capture nostalgia for American Girl dolls that became ubiquitous in the 1990s, with the opening two weeks ago of a flagship store in New York’s Rockefeller Plaza.
But American Girl is under threat. After an era of stable growth, sales of the $115 doll slipped in 2015 and 2016, and are down 18 per cent so far this year. Mattel has had an equally torrid year, suspending its dividend last month after having lost a third of its stock value as sales dropped 10 per cent.
Privately owned Danish group Lego is also battling falling sales. Having grown to become the world’s most profitable toymaker in the $90bn global toy market, it reported its first sales slide in a decade in September as first-half revenues slipped 5 per cent.
The internet has upended toymakers’ decades-old business models, allowing cheap independent products such as fidget spinners and slime to usurp traditional big-budget rollouts. Such crazes can spread online in a matter of hours, while large-scale carefully planned launches take months.
Josh Loerzel, vice-president at Zing, an Oregon toy manufacturer that makes fidget spinners, says “this has flipped the script . . . it’s about how quickly you can react”.