Barbie and Bratz, the grande dame and the young chippie of the doll world, are ratcheting up their turf war this holiday season.

The pitched battle for dominance in the $2.8 billion market has taken on added significance, with both brands experiencing slack sales during a shopping season analysts expect to be lackluster.

Sales of Mattel Inc.’s Barbie, a brand that accounts for almost a third of the toymaker’s total sales, is likely to remain weak during the holiday period, despite a recently released DVD, “Barbie as the Princess and the Pauper,” and an endorsement deal with teen idol Hilary Duff.

Bratz, a product of Van Nuys-based MGA Entertainment Inc., faces what analysts expect to be a falloff in sales after triple-digit growth in each of the last three years. “(Bratz) distribution is very widespread, which is never a good thing,” said Margaret Whitfield, managing director and toy analyst with Ryan Beck & Co. in Livingston, N.J. “Interest seems to be waning.”

Local retailers are sounding skeptical about both dolls.

“We don’t sell as many Barbie and Bratz as we used to,” said Leonard Lieberman, owner of Star Toys in Brentwood. Lieberman said he is carrying less of both lines, noting: “Shelf space is valuable, and I’d rather put something I think is going to sell there.”

At the KB Toys Inc. store in Burbank, the Bratz line sells somewhat better than Barbie, but the real winners are electronic toys, including Game Boy systems and Nintendo DS.

“Many retailers bought the Bratz line aggressively in 2004 and some have been disappointed,” Banc of America Securities analyst Gary Cooper wrote in a Nov. 18 report. He noted that as Barbie struggles and Bratz revenues decline, the doll category will experience increased competition.

“For the most part Barbie has retained its shelf space if not retailer support but another holiday of meaningful decline in Barbie and retailers may take some shelf space from Barbie,” Cooper wrote. “Alternatively, Bratz gained shelf space in 2004 but given its decelerating revenue, this line is likely to give back some of that shelf space next year.”

Barbie still tops

Lisa Marie Bongiovanni, a spokeswoman for El Segundo-based Mattel, downplayed the pressure for Barbie to perform this holiday season. “Barbie is and continues to be the No. 1 brand for girls worldwide,” she said.

Indeed, a recent survey conducted for the National Retail Federation found Barbie would be the most popular toy purchased for girls this season, with 21.7 percent of consumers polled planning to purchase Barbie merchandise, compared with 16.5 percent of consumers shopping for Bratz dolls.

While third-quarter sales fell 13 percent last quarter from the like period a year earlier, Barbie still accounts for more than 30 percent of the Mattel’s total revenues, which were $4.9 billion last year. Sales of Bratz dolls in 2003 were estimated at between $600 million and $800 million. While sales have slowed, the company forecasts double-digit growth this year.

“We believe market share for Barbie is stabilizing,” Whitfield said, noting new products such as the Fashion Fever line of dolls, outfits and accessories and the ‘tween-targeted My Scene line of dolls.

MGA President and Chief Executive Isaac Larian conceded that Bratz sales had slowed this year, putting the blame on delays at the port. “We’ve had a lot of hot-selling goods sitting on the water for a few weeks, and we’re not able to get them to the stores on time,” he said.

As for Barbie’s attempts to become more fashionable, “Haven’t they been talking about that for the past couple of years?” he asked, citing Mattel’s short-lived Flavas line as evidence. “We don’t think Fashion Fever is really fashionable. The bigger problem is that little girls just don’t want Barbie anymore. It’s not cool to have a Barbie.”

Fickle customers

It’s not just Bratz that Mattel has to look out for. Dollmakers that have watched MGA chip away at Barbie since launching the line in 2001 see an opportunity to make strides of their own with new products for 2005.

Newer dolls such as RC2 Corp.’s Earth 2 Jane, Playmates Toys Inc.’ “evergirl” fashion dolls and Jakks Pacific Inc.’s Sky Dancers, a line of winged dolls sold by Galoob in the mid-1990s, are likely to pick up the real estate.

“Bratz broke the door open and demonstrated they could not only give Barbie a run for its money, but could establish a major competitive brand against Barbie,” said Jay Foreman, president of Jakks’ Play Along division. “The trade is really receptive to somebody trying to have a brand that not only competes with Barbie, but competes with Barbie and Bratz.”

Foreman says that Jakks’ shelf space is already up significantly from a year ago due to the company’s revival of Care Bear and Cabbage Patch Kids. “We’re getting more promotional placement in stores and our everyday shelf space has increased,” he said.

RC2, which will begin selling the Earth 2 Jane line in late spring through licensor G Studios in Newport Beach, previewed the concept to buyers in October and “had a very favorable response,” said spokeswoman Diane Busman.

Even MGA’s Larian, while still enjoying success with Bratz, acknowledged the toy business is fickle.

“Kids are like aliens,” he said. “One day they wake up and they think, ‘This thing is not cool.’ It could happen with Bratz or any other brand if you do not keep it fresh. That’s what we have tried to avoid. What you’ll see at retail stores come February 2005 for Bratz is nothing like what you see in the stores now.”