Mattel's Gotta Move: Trying to Bust Away from China's Grip
Mattel intends to raise costs on select toys to compensate for tariff expenses.
Looks like Mattel, the makers of Barbie and Hot Wheels, are getting ready to kick things into high gear and ditch their over-reliance on China for production. By 2026, they plan to slash China's slice of U.S.-bound production to single digits, hoping to set up shop primarily in countries such as India.
This diversification move comes as a response to those blasted tariffs and the uncertainty of global trade. In 2025 alone, our mate Mattel expects to shift around 500 products from China factories, almost a double from the 280 they moved last year.
Tariff Troubles Mean Higher Prices for You
The trade wars between the U.S. and China have dealt a hefty blow to Mattel's pockets too. To cover their costs, they're considering hiking prices on some of their products in the States. They reckon around 40-50% of their goods will set you back an extra $20 or so.
But, don't worry - they're planning to keep some of their most coveted toys cranked out in more than one country to prevent any possible shortages. They're focusing on maintaining a steady supply chain to keep their goods rolling into stores without a hitch.
Oh, the Uncertainties of Trumplandia
Despite these plans, Mattel's CEO, Ynon Kreiz, admitted that the volatility surrounding Trump's trade policies makes it tricky to make accurate predictions about consumer spending and sales for the rest of the year. In fact, they've withdrawn their annual earnings forecast to reflect this uncertainty.
While Mattel reported decent sales for the first quarter, the company still reported a wider loss. They dished out a loss of $40.3 million, up from $28.3 million in the same quarter last year. Mattel's stock dropped less than 1% following this news.
Source:
- Diversification: [1] Reuters. Mattel to dial back China exposure, more than double product relocation this year.
- Tariff Costs: [2] Business Insider. Mattel's earnings for Q1 2022.
- Mattel, known for manufacturing Barbie and Hot Wheels, is planning to Increase production in countries like India to reduce their reliance on China, as a result of tariff-related trade uncertainties.
- In an effort to manage costs related to tariffs, Mattel might raise prices on some of their products by around $20 or more next year.
- The CEO of Mattel, Ynon Kreiz, has expressed concerns about the unpredictability of Trump's trade policies, which makes accurate predictions about the industry's outlook challenging.
- Despite recording decent sales in the first quarter, Mattel posted a wider loss this year, with a loss of $40.3 million compared to $28.3 million in the same period last year, causing their stock value to dip less than 1%.
