Mattel Loses CEO Margo Georgiadis But Should Keep Her Plan

(Bloomberg Gadfly) -- Mattel Inc. seems to change CEOs about as quickly as kids cycle through favorite toys.

Margo Georgiadis, the toy giant's top executive for about 14 months, has been in the early innings of a sweeping transformation plan. But she won't be around to see it through.

Georgiadis is leaving Mattel, the company announced Thursday, to become the CEO of the company behind Ancestry.com. Mattel board member Ynon Kreiz will replace her.  

Some investors might not be particularly sad to see Georgiadis go, given that Mattel's stock has been battered on her watch.

Mattel Loses CEO Margo Georgiadis But Should Keep Her Plan

But I see her departure as a loss. In part, that's just because the revolving-door dynamic at Mattel in recent years isn't particularly healthy for any company. Georgiadis's predecessor, Chris Sinclair, lasted only two years as CEO. Bryan Stockton was ousted in early 2015 after holding the job for three years. Such instability at the top likely wears on the rank-and-file. 

More importantly, though, Georgiadis, a Google veteran, was an asset because she had deep experience in the technology sector, something rather valuable to Mattel at a moment when it needs to figure out how to become a more digital-centric business.

And her turnaround plan made a lot of sense. I particularly liked her ideas about beefing up Mattel's scripted content offerings and presence in digital gaming, a potentially profitable category.

Let's not forget, too, that Mattel's lousy sales in recent quarters aren't necessarily a great barometer of the strength of Georgiadis's vision for the company. Her strategic plan had just been unveiled in June; a $650 million cost-cutting effort had only been announced in October.

The bankruptcy of Toys "R" Us Inc. -- a major Mattel partner -- has been a heavy drag on its results.

Mattel Loses CEO Margo Georgiadis But Should Keep Her Plan

In other words, I don't think we really had a chance to see what Georgiadis could do. That's a shame, because I think she had a good shot at succeeding.

That said, we may yet get to see whether some of her plans can, indeed, fix Mattel. In the press release about his appointment, Kreiz said he is "committed to building on our existing strategy as we continue to aggressively implement our transformation plan."

That suggests he largely plans on sticking to the path Georgiadis mapped. And he'll be working with the senior leaders she recruited, including CFO Joe Euteneuer and chief technology officer Sven Gerjets

Kreiz may end up being a satisfactory choice to lead the company. Like Georgiadis, he isn't a toy industry lifer. He was previously CEO of Maker Studios, a media company acquired in 2014 by Walt Disney Co., and earlier led Endemol Group, a television production company.

Media content is key to Mattel's future, so it's helpful Kreiz knows that landscape well.

And perhaps a change at the top creates fresh occasion for Mattel to explore dealmaking as an avenue for salvation. Georgiadis reportedly rejected a Hasbro Inc. takeover approach last year, a tie-up Gadfly has noted previously could make sense for both companies.

But lucky for Kreiz, even if he doesn't pursue M&A, Georgiadis has left him with a pretty solid playbook.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Sarah Halzack is a Bloomberg Gadfly columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.

To contact the author of this story: Sarah Halzack in Washington at shalzack@bloomberg.net.

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