Staff Reporter

As Mattel Inc. released disappointing fourth-quarter earnings, much of the talk was about the toy maker's problems at the retail level. But part of the trouble may be more basic:

Girls are giving up their Barbie dolls earlier than ever.

Toy industry analysts and child psychologists say that as children feel more pressure to grow up faster and faster, they also are giving up their traditional toys, such as Barbies, Matchboxes and Hot Wheels, at an ever-earlier age.

All those toys are made by Mattel.

"Kids are getting more sophisticated, and their goal and their outlook is more adult-centered than child-centered," said Dr. Dee Shepherd-Look, a clinical psychologist and Cal State Northridge professor specializing in child psychology. "They're taking on the accoutrements of junior high, then high school, then adulthood more quickly."

In years past, girls played with their Barbies until they were 12 or 13, but today many 8- and 9-year-old girls are forsaking their Barbies and moving on to wearing jewelry, styling their hair and playing computer games, said Shepherd-Look.

Jill Krutick, an analyst with Salomon Smith Barney, agreed that the world's largest toy maker has had a hard time dealing with the changes in children's toy-playing habits.

"I think the primary issue is that the demand curve for traditional toys is aiming down," she said. "The number of years (children) are playing with traditional toys seems to be contracting. It's been a real challenge (for Mattel)."

That challenge was made clear in the fourth quarter ended Dec. 31, with Mattel reporting net income of $63.8 million, compared with $195.1 million for the like period a year ago.

Sales of Barbie dolls fell 14 percent in 1998, following two years of double-digit sales growth.

More encouraging was the company's full-year net income of $332.3 million, up from $285.2 million a year earlier. But sales for 1998 were $4.78 billion, down from $4.84 billion.

Much of Mattel's problems last year came from the scaling back of inventory at Toys 'R' Us, the nation's largest toy retailer. The cutback ended up costing Mattel about $250 million in lost sales last year.

But changing play habits are perhaps a bigger long-term hurdle. The company last year began taking steps to try to keep customers until they're older including the acquisition of Learning Co., a Cambridge, Mass.-based maker of computer games and educational software.


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