This month, the number-one selling toy in the world – with nearly 500 million units sold every year and over 6 billion sold worldwide – celebrates its 50th anniversary. That’s right, Hot Wheels turns 50.
A Great American Story
In 1945, Elliot Handler – an innovator and rocket scientist – and his wife, Ruth, started Mattel out of a garage workshop in Los Angeles, California with their friend Harold Matson. They called it Mattel, a name created from Matson and Elliot.
Unbeknownst to most, the first Mattel products were simple picture frames, but Handler found himself with another business: taking picture frame scraps and making doll house furniture. Soon after founding Mattel, the Handlers bought out Matson and then turned their focus to toys.
Mr. Handler’s tinkering and design talents were legendary, but they were supported by his wife’s creativity and brains as well. In fact, Mattel’s biggest success was Ruth’s invention: Barbie, who debuted in 1959 wearing a black-and-white striped swimsuit. As legend has it, Ruth was inspired by her daughter’s fascination with paper dolls and named Barbie after her.
By 1965, driven mostly by the sales of Barbie, Mattel’s sales topped $100 million, and the company joined the ranks of the Fortune 500. In the late 1960s, the Handlers were looking for a toy that would appeal to boys as Barbie had to girls. Elliot dreamt up the idea for miniature cars that were realistic, albeit on a much smaller scale. And so the 1:64th scale die-cast cars were designed with cool paint jobs, wheels that really worked and of course the infamous orange track system that most boys (and girls) growing up in the 70s and 80s remember.
Today, Mattel (traded on NASDAQ under the symbol MAT), holds the distinction of being the world’s largest toymaker and is headquartered in El Segundo, Calif.
Employing over 32,000 people around the world, Mattel operates in 40 countries and sells products in more than 150 nations. Their products include some iconic brands, including American Girl, Barbie, Fisher-Price, Hot Wheels and Thomas & Friends.
The 50th Anniversary comes at a time when Mattel is struggling, as Mattel’s sales have been in a slump as they struggle to adapt to the toys demanded by kids today. And despite offering the number one selling toy in the world based on units sold, Mattel’s future is anything but clear.
In fact, last year Mattel lost $1.1 billion and its stock price nose-dived by about 30%. Further, Mattel is struggling with the decision of its second biggest customer – Toys “R” Us – to liquidate.
Recently, for the quarter ended March 31, Mattel posted a net loss of $311.3 million, or 90 cents per share. Those figures are larger than the net loss of $113.2 million, or 33 cents per share, a year ago. And Mattel has seen 4 CEOs in 4 years.
Mattel Celebrates Anyway
To celebrate their 50th Anniversary, Hot Wheels is introducing a year-long lineup of live experiences, new products and content designed to engage enthusiasts and new customers alike. From the Mattel press release, there will be:
- The Hot Wheels 50th Originals Collection: Replicas of five Hot Wheels originals from the "Sweet 16" with legacy graphics, original packaging and original detailed paint, and Redline wheels.
Each car will include a code where one-winner in the United States will win a life-size 50th anniversary Hot Wheels Camaro.
- The Hot Wheels Legends Tour: Hot Wheels is launching the largest Hot Wheels travelling car show in search of a custom car worthy of being made into a Hot Wheels die-cast toy. The tour launched at Hot Wheels headquarters in April 2018 and will be visiting 14 Walmart stores across America.
One winner will be chosen from each stop to win a spot for their car to be shown at the world-renowned SEMA Auto Show where one vehicle will be chosen and immortalized as a Hot Wheels.
- The 50th Anniversary Edition Camaro: The first Hot Wheels toy created was a 1968 Custom Camaro, and to celebrate its anniversary, Hot Wheels partnered with General Motors to create a life-size version of the die-cast.
Available for purchase in 2018, the full-sized 50th Anniversary Hot Wheels Camaro includes exclusive Hot Wheels features like a Crush-Orange paint job, referencing iconic Hot Wheels orange track, unique interior and wheels, and commemorative Hot Wheels badging.
Request from a Financial Planner
While there is lots of information about Mattel and its financial condition presented here, it’s important to know that this is not a recommendation to buy or sell Mattel or any other stock.
But I will recommend that you think about your favorite Hot Wheels memory and share it with me when we next meet to discuss your financial plan.
Because I’m willing to bet that you have a Hot Wheels story and I can’t wait to hear it.
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