Mattel CEO Ynon Kriez says it's too soon tell how the war in Iran is impacting the company, but he says their supply chain is diversified and flexible. He also talks about explosive demand for Hot Wheels and Barbie dolls, and how its partnership with OpenAI is working.
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But we begin with Mattel, the toy maker which relies for a large part of its business on petroleum-based plastics. It makes iconic brands like Barbie and Fisher-Price, has accelerated efforts to diversify its supply chain as it navigates oil price volatility and tariff uncertainty. Joining us now is the CEO Ynon Kreiz. He joins us from the UBS Global Consumer and Retail Conference in Midtown Manhattan. Ynon, thanks for your time. Let me first get your take on the war in Iran. It doesn't look like it's going to let up anytime soon. How are you dealing with it at Mattel?
Well, hi Matt. Thanks for inviting me. You know, like the rest of the world, we're following developments and we'll see where things go. We believe over the next few days or a couple of weeks it will be easier to know where things are heading.
It feels like it's just constant supply chain disruption. Perhaps you've gotten more used to trying to tackle it, Ynon, after COVID and tariffs, but now there's this concern. What happens to petroleum-based products like those, like toys that happens at Mattel? How do you think about hedging higher oil prices? How do you deal with that internally?
Well, supply chain is one of our competitive advantages. Over the last few years, we continue to diversify and evolve our supply chain and develop a system that is flexible and modular and is able to respond and adapt to changing market conditions. Typically, when supply chain is tested, we stand out. We stand out and we navigate situations. It's not that we're insulated, but we have the system, we have the capabilities and expertise to navigate changing market conditions.
We heard from Donald Trump at the beginning of his second term saying that, you know, maybe kids only need one or two dolls, not 30. No one gave the message to my daughters, but we've seen toy prices actually come down in the last few months. Obviously, there was a rise when we put the tariffs on, and I think we've got this brilliantly charted by our economics correspondent, Michael McKee, but then we've seen drops in December, in January, in February. We're seeing toy and game prices falling. Can you explain that drop?
Well, the toy industry is a growth industry. It grew in 23 out of the last 25 years. It grew strongly last year at over 6%. And we saw positive consumer demand for our product in the fourth quarter and the full year both in the US and internationally. So we do see demand for our product. We saw it last year. Growth came from both prices but also volume. So the industry is healthy. We know that play is a fundamental human behavior, that parents will always prioritize spending money on their children, especially when it comes to quality product and trusted brands. And it's also a strategic category for retailers in that it's driving foot traffic and toy shoppers spend more time in store and typically have a bigger basket. So it is a strategic category for retailers and we expect the toy industry to continue to be resilient, not completely insulated but resilient in challenging economic times and we believe it's a growth industry that will continue to grow over time.
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