(Reuters) - Mattel Inc (MAT.O) said on Thursday that board member and digital media executive Ynon Kreiz will replace Chief Executive Margaret Georgiadis, who is stepping down after only 14 months at the helm of the maker of Hot Wheels and Barbie dolls.
Mattel, whose shares have lost nearly half their value in the past year under Georgiadis’ tenure, is facing weak demand for its well-known toys at a time when children increasingly prefer videogames.
The bankruptcy and liquidation of Mattel’s top customer and toy retailer Toys ‘R’ Us has heaped more pressure on the company and highlighted the troubled retail environment.
Kreiz is a former head of digital media company Maker Studios, which assembled a stable of YouTube stars and was acquired by Walt Disney (DIS.N).
Kreiz’s appointment as CEO, effective April 26, will likely help Mattel shift its focus toward using entertainment to increase Mattel’s brand equity and revenue, Global Toy Experts CEO Richard Gottlieb said.
“It appears that the Mattel board is betting that Kreiz, with his history in entertainment, can turn things around,” he added.
The departure of Georgiadis, a technology executive hired from Alphabet Inc’s Google (GOOGL.O) to modernize Mattel, caught some experts by surprise.
“I think the high tech experience that Margo had maybe wasn’t just working out,” said Jackie Breyer, editor-in-chief of The Toy Book, a trade magazine covering the toy industry. “The idea is to try and get a fresh start especially in the wake of the Toys R Us liquidation.”
Under Georgiadis’s leadership, Mattel ramped up efforts to cut costs, replaced veteran finance chief Kevin Farr in September and suspended its dividend.
Georgiadis will serve in an advisory role at Mattel until May 10, after which she will take over the role of chief executive in genealogy website Ancestry.com.
Kreiz, who also served previously as chairman and CEO of television production company Endemol Group, said that as the new head of Mattel he would make more use of its IP that includes iconic consumer brands such as American Girl and Fisher-Price.
Kreiz will become chairman of the board after his election at an annual shareholders’ meeting slated for May 17, Mattel said.
Mattel is scheduled to release its first-quarter results on April 26 and its conference call will be hosted by executives including Georgiadis.
The company’s shares closed down 3.2 percent at $13.45 and were up 1 percent in extended trading.
Reporting by Aishwarya Venugopal in Bengaluru; editing by Arun Koyyur and Tom Brown