The lobby of Mattel Inc.’s 15-story headquarters in El Segundo looks like a child’s fever dream.

Where there isn’t a life-size Hot Wheels vehicle, there are two large Rock Em’ Sock Em’ Robots, a 5-foot-tall replica of the rainbow stacking rings from Fisher-Price and a Starbucks wrapped in American Girl memorabilia.

The 15th floor, where the executives stay, looks more like the lair of a wealthy, mysterious patron that takes their toy collecting hobby very, very seriously. The walls are lined with fine art commissioned by Mattel to reimagine its various franchises in the styles of Andy Warhol, Madsaki and Jean-Michel Basquiat.

“Take a look at this one,” Steve Totzke said, pointing to a Donald Baechler painting that had actual Barbie clothes plastered to the canvas.

Totzke is the president and chief commercial officer at Mattel. He will sometimes take meetings in his office in front of a backdrop of boxed Barbies, UNO cards and toy cars, using fancy phrases like “systems of play” and “attachment rates” (like how many Barbies will play in one Barbie Corvette, or how many Hot Wheels cars are sold compared to the track sets) to describe how Mattel can continue to feed childhood memories and adult nostalgia to the public.

“The emergence of the adult fans in the toy industry (is important),” Totzke said. “We have talked about children and nostalgia – it all builds to the adult fan, that’s been the fastest growing segment the last few years.”

A changing company

Totzke started at the company in 1996 as the director of sales and quickly climbed his way up the corporate ladder. The way children play has changed significantly since he started, he admits. Children are no longer navigating mazes of toy aisles in retailers or waking up early to watch Saturday morning cartoons. Just like adults, they live much of their recreational life online: on iPads, their parents’ smartphones, social media and the big screen.

“Traditional television does not get the same viewership that it once did,” Totzke said. “So how we create the demand for both the kids and their parents, that’s really changed over the last five years.”

Creating demand looks like the 2023 Greta Gerwig movie “Barbie,” which became a cultural phenomenon and a box office blockbuster. It looks like a slew of animated series on streaming services, including “Hot Wheels Let’s Race” on Netflix, an animated “Barney’s World” show on Max featuring a certain purple dinosaur from our imagination and a big budget adaption of “Masters of the Universe” with Amazon MGM Studios. It also looks like doubling down on the physical world with the Hot Wheels Legends Tour, an event that allows people to trick out their cars for a chance to turn their designs into a Hot Wheels car.

Then there’s the Mattel Adventure Park, a theme park in Arizona featuring Hot Wheels roller coasters (one is called the “bone-shaker”), a life-size Barbie Beach House, a Masters of the Universe-themed laser-tag arena and a mini golf park with courses based on Pictionary and the Magic 8 Ball. Its second theme park in Kansas City will feature the same attractions and is expected to open in 2026.

“This would be the first time that we’ve been able to have all of our great brands in one location, 365 days a year, so you can actually travel to it and you can plan a vacation around it and go,” Totzke said.

Push into entertainment

The non-toy experience is a big part of Mattel’s new vision. Ynon Kreiz became the chief executive and chair of Mattel in 2018, turning the toy company into an entertainment brand that focuses on franchising its treasure trove of valuable intellectual property into television shows, films, video games and theme parks. Months after Kreiz started, Robbie Brenner came on board as the president of Mattel Films. Josh Silverman joined the company as the chief franchise officer after spending years running consumer products for The Walt Disney Co. Together, along with the rest of the company, Mattel looks at new ways to refresh its IP and resurrect brands that haven’t been on the market in a while, like Polly Pocket in 2018 or Barney in 2024.

“It’s a little bit of our vault strategy,” Totzke said. “When you have 80 years of heritage and you have 80 years of brands, sometimes you’ll rest them.”

Right now, Totzke is gearing up for the holidays, which the company expects to see positive returns from despite inflation, overall economic uncertainty and a recent controversy with its new Wicked dolls. Analysts feel the same – James Hardiman from Citi said in a research note that, “At a minimum, we would expect to see a surge of Barbie sales in the upcoming season and beyond, with what we can only assume will be a Barbie sequel or sequels in coming years.”

It seems like Kreiz’s strategy paying off – the company’s third quarter results in October showed a net income of $372 million, up $226 million from the year prior’s $146 million. Its earnings per share was $1.09 for every $0.41 share. At the same time last year, that ratio was $1.14 earnings per share to every $1.08 share. Mattel’s gaming division, Mattel163, is expected to garner $200 million in gross billings by the end of the year.

Mattel’s share price is noticeably lower than its all time high in 2013 when it reached $45.69 per share. This year it has seen some highs and lows but Mattel’s current stock price of $19 is roughly the same as it was a year ago.

“We continue to execute on our multi-year strategy to grow our IP-driven toy business and expand our entertainment offering,” Kreiz said in a statement. “…We expect topline growth in the fourth quarter driven by a good holiday season, market share gains and a toyetic theatrical slate and are well positioned for long-term growth and shareholder value creation.”

But the toys are still a big focus for the company, according to Kreiz. Not for nothing, but when the Business Journal visited Mattel’s headquarters to photograph Totzke, executive makeup and hairstylist Judy Haft was present with a careful eye and a small paintbrush to tame flyaways – on the dolls.

“Retailers prioritize the category as a strategic lever,” Kreiz said. “Toy shoppers drive traffic to the store, they spend more time in the store, and they have, typically, a bigger basket or basket that is worth more.”

But Mattel isn’t just a toy brand anymore – nor is it an entertainment company or a video game company. Its core, defensible value is its intellectual property, per Totzke.

The priority is “first and foremost, continuing to keep these brands relevant for decades,” Totzke said. “You have to make sure that you’re keeping it fresh, not just the content fresh, the product needs to be fresh. It needs to be fun. It needs to be new. There’s certainly a lot of focus on making sure that these brands stay as relevant today as they were 40, 50 and 60 years ago.”