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Mattel Shuts NYC Showrooms; Stock Hits Bottom
By Paul Tharp  
N.Y. Post
NEW YORK — Barbie had a bad day yesterday — she got kicked out of her pricey New York digs and her parent's stock hit bottom.

Mattel shuttered its two floors of glitzy showrooms in the Flatiron District, giving up 100,000 square feet of space, to save money.

But the surprising cost-saving step didn't have any impact on slowing a selloff rout that pushed Mattel's stock to a 52-week low of $9 a share.

And with all the troubles at Mattel, rivals have been emboldened to take on the company's franchise Barbie doll.

Mattel vacated its fifth- and sixth-floor showrooms over the last two days, but will keep office space on the second floor for its pre-school toys, including Sesame Street and Fisher-Price brands, but not Mattel.

Mattel's two floors were snapped up by the Gap Inc. for new offices, and by Internet incubator firm, IdeaLabs. The six-story building at 675 Avenue of the Americas is also home to a Barnes & Noble store.

The company's decision to close its important New York showrooms was a blow to the toy industry here, which is scattered around the Flatiron District and largely headquartered in the Toy Building at Fifth Avenue off Madison Square.

The world's biggest toy company, which suffered a surprise $18.4-million loss last quarter, will be saving only about $3 million a year by giving up its two floors of showrooms, according to real estate sources.

Mattel said no decision had been made about where, or when, it would reopen its showrooms here. The company used the space to show off its products to retail buyers, particularly during several months before the annual International Toy Fair held here in early February.

Ironically, it was Mattel that first bolted from the Toy Building five years ago to lead an exodus into other nearby buildings.

Stock of the El Segundo, Calif.-based toy giant has already lost more than two-thirds of its value since last spring — some $8.8 billion — due to bungled decisions by its temperamental chief executive, Jill Barad, who was pushed out last month with an $8-million golden parasol.

With Mattel in turmoil, other doll manufacturers are also preparing to launch big-budget attacks on Barbie's dominance for the first time in years.

"Most people in the fashion-doll category were always afraid to go up against Barbie, but there's a better opportunity now to go after some of Barbie's share," said toy analyst Christopher Byrne at Byrne Communications.

Among doll makers gearing up to grab some of Mattel's $1.5 billion in slipping market share are Jackks Pacific, which makes urban-edgy girl dolls, Thinkway and its high-fashion "Tanya" dolls, and Smartees, which makes girl dolls as lawyers, doctors and CEOs.

Mattel is still being headed by outside directors while it searches for a new chief executive to replace Barad. Meanwhile, analysts say that its rising debt levels and sinking performance won't help its stock price anytime soon.

"Barbie is still the top doll, but the company needs leadership and a clear communication on how they'll fix their problems before the stock goes anywhere," said toy analyst Beth Burnson of ABN AMRO.

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