Dive Brief:
- Mattel on Tuesday announced that it plans to launch Mattel Brick Shop, a Lego-like competitor that will slot into the toy building sets category, according to a company press release. Mattel is introducing the new brand at the Nuremberg International Toy Fair.
- The company said Mattel Brick Shop will incorporate features, materials and techniques that inspire people to try something new. The brand will offer creative, sturdy and easy-to-follow builds, as well as an opportunity for post-build customization at competitive prices.
- Mattel Brick Shop’s inaugural product is scheduled to drop in May. It said new building sets will be released on an unspecified timeline in the coming years.
Dive Insight:
Mattel’s Lego competitor comes as the toy manufacturer works to maintain momentum on its multiyear growth strategy.
“Our commitment is to deliver building sets that surpass builder’s expectations, with elevated designs and authentic details at accessible price points and I’m looking forward to revealing our first product line in a few months,” Roberto Stanichi, Mattel’s executive vice president and global head of vehicles and building sets, said in a statement. The company did not immediately respond to a request for additional comment about the upcoming product launch.
In North America and internationally, Mattel said it competes with several large toy companies, including Lego. Mattel’s building blocks and sets segment is currently centered on its Mega Bloks line. The company has partnered with several top franchises, including Pokémon and Hot Wheels in its building sets segment.
“Lego created a massive market for building sets that appeal to both children and adults,” Zak Stambor, a senior analyst for retail and e-commerce at Emarketer, said in an email to Retail Dive. “Now Mattel hopes to tap into that broad appeal and spark new growth. But execution matters. Mattel’s building sets need to carve out a unique identity or else they run the risk of feeling like a pale imitation of Lego.”
Competition in the toy segment is rising as the industry is trending toward shorter life cycles for individual toy products, driven by consumers using more sophisticated technology, Mattel said in its latest annual report. Additionally, competition is influenced by the fact that a small number of retailers — some of which offer and promote their own private-label offerings — account for a large portion of overall toy sales.
In what the toy company called a “milestone year,” Mattel’s 2023 full-year sales of $5.4 billion were flat compared to the prior year and the company began 2024 by setting a goal to achieve $200 million in cost savings by 2026. The company ended the third quarter of its 2024 fiscal year with a 4% net sales decline to $1.84 billion. Net income swung sharply upward in the quarter, rising 155% from $146.3 million to $372.4 million, but for the full year, Mattel still expects net sales to range from flat to slightly down. The company plans to report its Q4 earnings next week.
On Monday, Mattel also announced a partnership with Ferrari to develop new Hot Wheels products. The collection will include a range of Ferrari classics and the luxury automaker’s newest models. Mattel said those products are slated to drop this spring.