Eckert to craft makeover for troubled toy marketer

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Two marketing giants named new CEOs last week as Kraft Foods president-CEO Robert Eckert resigned to take the reins at Mattel.

Mr. Eckert, 45, a 23-year-veteran of the Philip Morris Co. unit, succeeds former Mattel CEO Jill Barad. Ms. Barad was forced to resign in February amid turmoil at the toy marketer that included steep earnings losses.

Kraft named Betsy Holden, 44, to succeed Mr. Eckert. Ms. Holden most recently held the title of exec VP, responsible for operations, research and development and quality, procurement, consumer insights and communications and e-commerce.


The departure of Mr. Eckert from the food behemoth, which saw 1999 sales of $17.5 billion in North America, surprised many inside the company, but analysts said the move was logical.

"People [at Kraft] are tired of seeing their stock options go toward cigarette litigation," said Bill Leach, an analyst at Donaldson, Lufkin & Jenrette. "Because they're tied to Philip Morris, the options tend to be worth a lot or nothing -- at the moment nothing -- which takes away any motivation to sell cheese."

If Ms. Barad was able to depart Mattel with a package valued at upwards of $40 million after almost bankrupting the company, certainly the potential for Mr. Eckert -- should he achieve a turnaround at the company -- is immense, Mr. Leach said.

The only real barometer of Mr. Eckert's possible success is his past track record, according to analysts watching the situation.

"Eckert is very well-respected in the industry," said Andrew Lazar, food analyst at Lehman Bros. "He has done a solid job at taking brands in slower-growing categories and innovating around them to keep the volume needle moving forward, spending back on innovation and new products."

Mattel desperately needs resuscitation after more than two years of chaos in which it lost a bevy of top executives and its stock slid from a high of $46 per share in 1998 to the recent average of $10 per share.


Contributing factors included the $3.5 billion acquisition -- spearheaded by Ms. Barad -- of software company The Learning Co., which continues to lose money and has spurred several lawsuits. Combined with sluggish sales of Barbie, Mattel's biggest brand, that loss crippled the marketer, leaving it ripe for new, effective management.

At Kraft, Ms. Holden has been the architect of an accelerated growth plan that has already proven successful. "We have been on a roll with the fastest profit growth in the food industry," she said. Kraft has a five-point plan to aggressively market core businesses; focus on new products; increase acquisitions; gain greater share of new distribution channels, like natural and organic retailers and put greater emphasis on marketing toward the growing ethnic population.


Ms. Holden's past duties included overseeing Kraft's $800 million media budget and its relationships with its roster agencies: FCB Worldwide, Leo Burnett USA and J. Walter Thompson Co., all Chicago, and New York-based shops Y&R Advertising and Ogilvy & Mather Worldwide.

Of those, all but JWT also service Mattel's estimated $530 million U.S. account.

O&M expects Mr. Eckert's move to strengthen its alliance with Mattel, which has been shaky recently. The agency's relationship with Kraft has always been on a firm footing, said one executive close to O&M.

Ms. Holden's previous responsibilities will be shouldered by Irene Rosenfeld, group VP-president of Kraft Canada.

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