Barbie out of fashion as Mattel slumps

Barbie sales fell 13% in the first quarter, adding to a much worse-than-expected slump for Mattel, the world's largest toy company.

It was the second consecutive quarter of falling sales for the doll, which has been a key part of the firm's product range for almost six decades.

Mattel said sales dropped by 15.4% to $735m (£574m) for the three months to 31 March.

That was the biggest slide since 2009 and short of the $801m forecast.

Barbie sales had increased for the first nine months of 2016, aided by new marketing efforts and the launch of dolls in a range of skin tones and body shapes.

The move was an attempt to counter criticism that dolls like Barbie set an unrealistic body image for girls.

Mattel said last year the new body shapes offered girls "choices that are more reflective of the world they see today".

Sales of Fisher-Price also fell 9% in the first quarter of this year.

Mattel was forced to slash prices to move unsold stock left over from the Christmas season, which combined with weak first quarter sales resulted in $113.2m loss.

That was higher than the $73m for the same period last year earlier.

Shares in Mattel fell more than 6% in after-hours trading in New York, and have sunk by a quarter in the past 12 months.

Margo Georgiadis, who became Mattel chief executive in February, said: "What we didn't expect was the prolonged impact from the leftover retail inventory. It's essentially isolated to North America and a few markets in Europe."

The former president of Google's Americas division plans to develop more tech-enabled toys to go on sale in the next couple of years, as well as expanding in Asia.

Mattel has been trying to increase sales in China by striking deals with the likes of online retail giant Alibaba.

Hasbro also makes Play-Doh

Meanwhile, arch-rival Hasbro has enjoyed spectacular success after winning the rights to sell toys based on Disney princesses, including Elsa from Frozen, when Mattel's contract expired last year.

Last month it reported a 52% rise in sales for its girls division in the holiday quarter, sending shares to a record high.

Hasbro will post results for the first quarter on Monday.