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$this->bbcode_second_pass_quote('', '[')b]Mattel CEO: Oil Rise Takes Toll on Barbie
Tue Mar 15, 3:06 PM ET
NEW YORK (Reuters) - Rising oil prices will be a top concern for No. 1 toy maker Mattel Inc, in 2005, affecting everything from the price of plastic in Barbie dolls and packaging to the cost of trucking merchandise to the store, Chief Executive Bob Eckert said on Tuesday.
"If oil continues to be where it's at today, we're going to face a problem with resin and transportation costs," Eckert said during a presentation at the Banc of America consumer conference.
The toy company, which makes Barbie dolls, Hot Wheels cars and dancing Elmo dolls, said in January it planned to raise prices across the board by 2 percent to 4 percent to offset raw material and labor costs.
"Retailers don't have a high appetite for price increases," Eckert said. "People recognize over time that as costs go up we are all going to have to pay for it, including gasoline at the pump."
Eckert added he had recently paid $2.50 for a gallon of gasoline.
"The price of resin has been a problem and a large number of manufacturers have notified retailers they need to raise prices anywhere in the 3 percent to 5 percent range just to cover costs," said Jim Silver, publisher of Toy Book and other industry magazines. "This won't effect consumers that much."
Eckert also said in his presentation that the toy industry is still grappling with store closures and inventory management.
In the past few years, hundreds of toy stores have closed, and toy makers have moved to selling toys in non-traditional retailers like video stores, sporting goods retailers and grocers.
Toys R Us Inc. (NYSE:TOY - news) is exploring options for its toy business, and may end up selling the entire company. Industry watchers expect at least 100 Toys R Us toy stores to close.
"It's quite possible there might be fewer Toys R Us stores so we're try to build contingency plans," Eckert said. "People are still going to buy toys. There will be winners and losers at retail and we want to make our toys available where people want to shop."









