Mattel plays "wait and watch" game

By Aarthi Sivaraman

NEW YORK (Reuters) - This holiday season, the world's No. 1 toy maker, Mattel Inc MAT.N, will play a game of its own -- wait and watch.

The owner of such brands as Barbie, Hot Wheels and Fisher Price would rather make and deliver toys depending on how consumer demand shapes up in the 2009 holiday season than end up with excess stock, Chief Executive Robert Eckert said at the Reuters Global Retail Summit on Thursday.

Its caution comes after toy makers and retailers had a tough holiday season last year, when grim economic times squelched parents' ability to spend even on toys for their children.

Several retailers sold toys at significantly lower prices to empty out their inventories, and are now trying to match merchandise levels with consumer demand. Toy manufacturers are taking the same path.

"We'll all be a little conservative this year," Eckert said, participating in the summit by telephone. "We'd rather chase demand than build too much product, but that's the environment we're in. We accept it and retailers accept it and we are working together on it."

But that strategy could mean a higher risk that Mattel could end up with no stock for a hot-selling product.

For example, its $80 Mindflex game that challenges players to control a small ball using the brain's electrical activity, is tougher to make on short notice, Eckert said, meaning it could be in short supply if shoppers like it.

Also, Mattel is touting a more grown-up version of the Dora the Explorer doll, and $30 "Elmo Tickle Hands" gloves this year to attract shoppers.