November 22, 2024

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[THE INVESTOR] Korean toy maker Sonokong, whose largest shareholder is Mattel, on Aug. 8 reported an operating loss of 4.4 billion won (US$3.90 million) for the third consecutive quarter in the April-June period.

Since the highly publicized stake sale to Mattel in October last year, the Korean firm has continued losing money, with its accumulated losses reaching 6.46 billion won. 

Turning MeCard card tranfomers car toys.

Sonokong last posted an operating profit in the third quarter of 2016 with 590 million won.

The company said political and social issues have affected consumer sentiment negatively overall since the second half of last year.

Especially, sales of its cash cow “Turning Mecard” were hit hard. The toy transform from a car to a robot once it passes a magnetic card. In the beginning of 2014, its popularity skyrocketed with many parents standing in long queues at toy stores, but the demand has significantly decreased in recent months.

The company said it plans to launch a new dinosaur-themed “Turning Mecard” toy in time for the holiday season to restore profits.

Sonokong Chairman Choi Sin-gyu sold 11.99 percent of his 16.99 percent stake in the company to Mattel Marketing Holdings for 13.97 billion won on Oct. 10. He remains the second-largest shareholder.

Under the deal, the Korean firm secured exclusive rights for sale, marketing and distribution of Mattel products, excluding games, in Korea, while the two firms agreed to join hands for Asian expansion together.

By Alex Lee (alexlee@heraldcorp.com)