In a Barbie doll world, the Bratz bad girls make good business for MGA Entertainment. The company, which in 2011 ended an epic legal battle with archrival Mattel over the Bratz line of multiethnic dolls, manufactures children's fashion dolls under the Moxie Girlz, Novi Stars, and Lalaloopsy names. MGA Entertainment owns Little Tikes (maker of the iconic Cozy Coupe), and produces Rescue Pets brand plush animals, as well as lifelike baby dolls through a partnership with Zapf Creation, in which MGA holds a 65% stake. Founded in 1982 as ABC Electronics, the manufacturer later changed its name to Micro Games of America and then shortened it to MGA when its focus shifted from games to dolls in the late '90s.
MGA Entertainment reaches retailers around the world. Since 2007, MGA Entertainment has owned the exclusive license to sell Zapf Creation's products in American markets. In return, Zapf Creation is paid a distribution fee to sell MGA products in certain European markets. MGA recently took orders for a doll featuring Lady Gaga from retailers in 10 countries.
The aptly dubbed "doll wars" has taken a toll on MGA's finances. The company has incurred more than $137 million in legal fees associated with copyright and trade secrets issues. It also missed out on the benefits of its top-selling Bratz, whose revenues were diverted to an escrow account until all appeals were exhausted. In 2011 Mattel's claim to the dolls was denied and its rival awarded $319 million in damages and legal fees. Mattel moved to appeal the award in spring 2012, but dropped its claim that MGA infringed on its copyright. MGA Entertainment also faces an uncertain future as the Toys "R" Us IPO stalls. The toy maker along with other manufactures rely heavily on the chain to showcase its products. Without an IPO to pay off its considerable debt, Toys "R" Us' appears an increasingly risky retail partner.
As part of its rebound strategy, MGA has brought out a line of Bratz True Hope bald dolls in solidarity with cancer sufferers. Other efforts in 2012 include a partnership with tween apparel, accessories, and lifestyle retailer Justice (owned by Ascena Retail Group) to debut the cosmic Novi Stars brand of dolls. The introduction follows MGA's rollout of the Bratzilla doll line, enchanted good witch cousins of the Bratz.
MGA also acquired the license to make a doll with Lady Gaga's likeness and voice. However, the toy manufacturer in mid-2012 sued the pop star (and her management and licensing companies) for more than $10 million, alleging they broke the agreement by delaying approval of the toy, which threatens to miss the fall and Christmas shopping season. – less