Mattel, underscoring the toy industry's lingering malaise and the firm's own lackluster performance, announced Friday that it lost a whopping $100.7 million in the final quarter of fiscal 1987 and $113.2 million for the entire year.
The Hawthorne company, perhaps best known as the maker of Barbie dolls and Hot Wheels, attributed the bulk of the losses to the cost of reorganizing its sagging worldwide operations last year.
The sweeping changes, which cost about $96 million, included the closing of five plants--two in the Philippines, one in Taiwan and two in the Los Angeles region--and the laying off of about 5,000 workers.
By comparison, in 1986, the company lost $8.3 million, a figure that included a $26.9-million loss in the final quarter.
In addition to the costs of reorganizing, Mattel, like the rest of the toy industry, faced a bleak toy sales market throughout 1987 that further depressed earnings.
Industrywide, according to analysts, toy sales in 1987 remained flat at $12.5 billion, largely the result of consumers rejecting the fancy and costly electronic gadgets and toy makers failing to entice them with new toys or exciting updates of any traditional ones.
In Mattel's fourth quarter, ended Dec. 26, sales were $233.8 million, about 14% below the $271.9 million of the prior year. Full-year sales were $1.02 billion, about 4% below the $1.06 billion recorded the year before.
Mattel's results were not a major shock to the industry. In mid-December, the company predicted a loss and confirmed that yet another round of layoffs was under way. Last month, the company revealed that it had axed 178 employees at its corporate headquarters in Hawthorne, including six unidentified vice presidents. Throughout 1987, the company said it had trimmed its headquarters staff by 22%, to 1,720 workers from 2,200.
Last month, in the wake of a bitter strike at its production facility in Manila, Mattel announced that it would close the plant and pull out of the Philippines. In December, the company said it had closed its other plant in the Philippines.
Mattel, which does all of its manufacturing overseas since closing its Los Angeles and Paramount plants in 1987, has said it would shift the Philippines work elsewhere in the Far East.