Mattel's Barbie Shanghai Store Not Meeting Sales Expectations
Posted on November 18, 2009
Bloomberg reports that Mattel's massive six-story Barbie story is Shanghai is falling well short of initial sales expectations. Mattel has lowered sales estimates for the store from initial expectations by over 60%. Bloomberg says Mattel has already had to lower sales estimates for the Shanghai store several times. The new general manager of the store says initial sales targets were "astronomical."
"The initial sales targets were astronomical," said Dann Murphy, who took over as general manager as his predecessor left eight months after the store opened. Targets for the six-story outlet's restaurant and "retail experience," which includes designing personalized Barbie dolls, have been revised down three times since its opening in March.Paul French, founder of Shanghai-based market research company Access Asia, told Bloomberg the store is open long enough that it should be working by now. He thinks the initial concept behind the store was wrong.
"Every retail store operates at a loss when it opens, but they've been open long enough that it should be working by now," said Paul French, founder of Shanghai-based market research company Access Asia. "They overestimated their brand recognition in China. I just think the concept is wrong."Dann Murphy, the store manager, also told Bloomberg that the restaurant - the Barbie Cafe - is struggling because customers can't find it or aren't aware it exists. Murphy says, "Sometimes customers don't even know the restaurant is there. So they get to the sixth floor and are like, "Where am I?'"Mattel has revised the overall sales target for the store to between 65 percent and 70 percent of original expectations, said Murphy. The store has started meeting its sales targets on product sales, including dolls and toys, after the targets were downgraded twice, he added.
It is possible the store simply offers too much Barbie and that Barbie products work better when they are sold at other retail outlets. Shanghai could also be too distant of a destination for many of Barbie's most loyal fans. The store does have a lot to offer for Barbie fans including a Barbie fashion runway, a design center where you can customize your own Barbie, and a full-service day spa featuring Barbie beauty products.
This Wall Street Journal video provides a great look at the Barbie Shanghai store. Images of the store can be found on ArchDaily.