Mattel 1999 Annual Report Download - page 7

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PLEASANT COMPANY
Mattel’s acquisition of Pleasant Company in July 1998 gave us a first-class business that has con-
tinued to grow. Internet sales accounted for $ 1 5 million of this growth, which helped us reach
our goal of $60 million for company-wide Mattel Internet sales in 1 9 9 9 . Pleasant Company has
also capitalized on innovative concepts such as the American Girl Place retail store.
Pleasant Rowland, founder of Pleasant Company, has been Vice Chairman of Mattel while
continuing as President of Pleasant Company. The American Girl brand, a beloved favorite of girls
somewhat older than those who play with Barbie, appeals to the sensibilities of girls of that age
in a way no other doll product can do. In addition, Pleasant Company, through its successful
catalog operation, has propelled Mattel forward in the world of direct-to-consumer marketing.
MATTEL INTERACTIVE
Our weaker than expected overall results in 1 9 99 primarily reflected problems with The
Learning Company. This acquisition, which was undertaken to support a still-persuasive
e-commerce and interactive strategy, coincided with a slowdown in CD-ROM sales, leading to
inventory problems and discounting, which resulted in an operating loss totaling approximately
$206 million, pre-tax, before restructuring charges. Nevertheless, our Mattel Interactive division
has good potential based upon its technology, its market position and its brands such as Reader
Rabbit, Carmen Sandiego, The Oregon Trail and The Print Shop, along with traditional Mattel
brands like Barbie, Hot Wheels, Matchbox, Fisher-Price and American Girl. In February, at the
American International Toy Fair in New York, we debuted an extremely well-received range of