Mattel Inc. Chief Executive Margo Georgiadis is leaving the toy maker after about a year in the job, a surprising shake-up at a company searching for a strategy that can end a four-year sales slump.
Former studio executive Ynon Kreiz will succeed Ms. Georgiadis, Mattel said Thursday. When Mr. Kreiz takes over on April 26, he will be the fourth person to hold the Mattel CEO title in as many years.
The maker of Barbie dolls and Hot Wheels cars has been struggling to adapt to a fast-changing industry where online content and movies are increasingly critical in capturing children’s attention. It also faces growing competition from smartphones, and had to cope with a shift to online shopping and the demise of traditional retail outlets like Toys “R” Us, which filed for bankruptcy last September and is liquidating its U.S. stores.
Mattel reached last year into the world of Silicon Valley by hiring Ms. Georgiadis away from Alphabet Inc.’s Google unit. Mr. Kreiz comes from the entertainment world, where he most recently was CEO of Maker Studios, a creator of content for YouTube.
After The Wall Street Journal reported earlier Thursday that Ms. Georgiadis was preparing to leave, Mattel said Mr. Kreiz would succeed her as CEO. The El Segundo, Calif., company said Ms. Georgiadis informed the board she would leave “to pursue a new opportunity in the technology sector.” The company behind the Ancestry.com website and DNA testing service later said it had hired Ms. Georgiadis as its CEO.
Mr. Kreiz’s ascent since being named a board member last June has been rapid. The company tapped into his expertise in multimedia and content creation, areas that have become crucial in the toy industry but where Mattel was lacking. Mr. Kreiz was the first new board member named after Ms. Georgiadis’s hire.
In February, Mattel said it planned to name the 53-year-old as board chairman at next month’s shareholder meeting, but last month abruptly elevated him to executive chairman, giving him more involvement in day-to-day decisions.
Ms. Georgiadis, 54, who joined Mattel in February 2017, was unable to reverse the company’s slide. She overhauled Mattel’s management team, suspended its dividend and unveiled plans to slash $650 million in costs.
Mattel shares have fallen nearly 50% since Ms. Georgiadis took over, chopping its market value to just under $5 billion. On Thursday, the shares rose about 1% to $13.60 in after-hours trading.
The company’s annual sales have slipped below those of rival Hasbro Inc., which the Journal reported last fall was exploring a potential takeover. It is unclear where those discussions currently stand.
One large Mattel shareholder said Thursday that despite the CEO change, the board should explore a sale or merger.
“We think Mattel is a great company with great brands,” said Charlie Bobrinskoy, vice chairman at Ariel Investment LLC, which owns about 3% of Mattel’s shares outstanding. “We think there would be huge synergies in a merger with any number of different partners with whom brands would fit wonderfully. Content is critical today and now is the time to pursue a potential combination with one of these partners.”
A Mattel spokesman said Thursday that Mr. Kreiz and the leadership team were “committed to building on our existing strategy as we continue to aggressively implement our transformation plan.”
Ms. Georgiadis’s exit from Mattel would further shrink the number of women running major U.S. businesses. As of March 13, there were 26 women CEOs in the S&P 500, according to Catalyst, a research firm. The tally included Ms. Georgiadis.
She was recruited to join Mattel in late 2016 as it was signaling confidence in the coming holiday season. But Mattel’s products didn’t sell as expected, and the company had to cut prices to try to salvage the most critical period in the year. Sales and profits plunged as a result.
Instead of inheriting a company on the upswing, by the time she joined after the holidays, Ms. Georgiadis found herself trying to stabilize what was then the world’s largest toy company.
Before she arrived, Mattel leadership was trying to recoup more than $400 million in sales it lost when Hasbro took over a major Walt Disney Co. license tied to the “Frozen” movie and other princess dolls. But the slew of smaller products it turned to in an effort to close the gap added complexity and costs, and didn’t have lasting power. Other Mattel brands, like Monster High and American Girl, also slumped.
Mattel continued to struggle last year as it tried to reduce excess inventory at retail and had to cope with the bankruptcy of Toys “R” Us. Mattel’s sales fell 11% last year, its fourth-straight year of declines. The company reports its latest quarterly results next week.
The company recently added several board members, including a former Lego executive and Mr. Kreiz. He ran Maker Studios, the content platform that is home to YouTube stars like PewDiePie, before selling it to Disney. Previously he was CEO of Endemol Group, an independent television production company.
Ms. Georgiadis will join Ancestry on May 10, Ancestry said Thursday. The Utah-based company has been searching for a permanent CEO since October when it also said it would delay plans to become a public company. Ancestry was valued at $2.6 billion in a 2016 private funding.
Before joining Mattel, Ms. Georgiadis was president, Americas at Google, where for six years she led commercial operations and ad sales.
She received a pay package initially worth more than $35 million to join Mattel, though much of it was equity awards, restricted stock and stock options — all of which have lost value with the stock’s steep decline.
“Sometimes what you think is a good marriage ends up being a poor fit,” said Jim Silver, editor of TTPM.com, a popular toy review website.
Mr. Kreiz, meanwhile, brings a wealth of connections in the entertainment industry to Mattel’s corner office, as well as acumen as a deal maker. “He knows everybody in Hollywood,” Mr. Silver said.