Mattel's Commitment to Ethics
Core Product: Hot Wheels
One unexpected bright spot in Mattel’s 1998 toy lineup was Hot Wheels, the 30-year-old line of die-cast miniature cars. Hot Wheels sales were up 40% for the quarter that ended June 30th 1998, easing the impact of a 15% drop in sales of its competitive Barbie doll line. The boost in sales of Hot Wheels can be traced to a deal with NASCAR, under which Mattel manufactures toys with the auto racing association’s logo. Hot Wheels has also ventured into entertainment licensing for the first time, producing vehicles tied to films like
"Armageddon."
Looking to the future, Mattel sees other advantages in licensing the Hot Wheels name to diverse manufacturing companies, ranging from sporting goods to bedding. Heading up that effort will be Robert McCandlish, former Chicago Cubs pitcher and current director of boy’s licensing for Mattel. McCandlish, who joined Mattel in 1996, is known for extending brands beyond the toy aisles to products such apparel, school products, and collectibles. He was also responsible for overseeing the introduction of the successful NASCAR line. Moreover, Mattel is confident this new license will give Hot Wheels more adult appeal.
So far, more than 70 companies, including JEM Sportswear and Mead, have agreed to the licensing arrangements. Hot Wheels licensing deals could bring in nearly $100 million in sales, boosting the car line to annual revenue of $400 million. This would make Hot Wheels the top toy vehicle in the world, even stronger than the Matchbox line that Mattel recently acquired.