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American Girl sales are plummeting. Can the iconic ’90s brand be saved?

It was a cultural phenomenon that defined the childhood of millions. Now, after years of decline, the struggling toy company is trying to reverse its losses by returning to what made it great in the first place.

In 1990, when I was in first grade, a children’s book author named Valerie Tripp visited my school. She was there to talk about a new series she had written for a four-year-old startup called American Girl. The company’s mission was to publish books about girls living in different periods of American history—like the Pioneer Era or the Revolutionary War—and sell dolls based on each character.

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Tripp had been brought on to develop the first characters of the series. From the start, my favorite was Molly McIntire, a 9-year-old living through World War II. I found it astonishing that Tripp was willing to portray the harsh realities of Molly’s life: Molly’s father had been sent to the front lines of the war, but he hadn’t written home in a while. She was worried he might never come back. Most adults in my life were busy shielding me from difficult things, and yet the American Girl books treated me like I was a capable, intelligent person who could handle concepts like warfare and mortality.

[Images: American Girl]

I recently spoke to Tripp again, 28 years after I first met her as an 8-year-old. I pointed out how the books were willing to tackle topics like slavery and child labor—issues that are still rarely addressed in books targeting children just starting elementary school. “This comes from respect for the reader,” Tripp tells me. “I felt that it was my job to reassure my reader that difficult things will happen to them, much like they happened to Molly. You’re going to experience big changes in your lifetime and you’re not going to end up where you began. But here’s the thing: You will be all right.”

That was an empowering message, one that I want to pass on to my daughter, who has just turned four. Since my daughter will soon be able to dig into the Molly stories herself, I have located my original books (which Tripp signed nearly three decades ago) and put them on her bookshelf, so they’re there when she’s ready for them. But when I dug around the American Girl website to find a Molly doll, I found that the character had been discontinued six years ago. In fact, the entire American Girl brand bears little resemblance to the one I first encountered as a child.

Then, and now

American Girl—which was founded by schoolteacher Pleasant Rowland in 1986 and then acquired by Mattel in 1998—has evolved beyond its roots in historical fiction. After decades of growth, the brand’s sales have been in free fall for the last few years. In 2018 alone, sales dropped by 28% compared to 2017. In contrast to Molly, the brand’s current Girl of the Year, Blaire Wilson, lives in our own time and aspires to be a farm-to-table chef. In her book, Blaire’s biggest challenge is finding time for her best friend while also helping to plan a wedding on her family’s farm.

American Girl still sells some $98 historical dolls whose stories are set in different periods of America’s past, but today it also offers other generic dolls that aren’t very distinct from others on the market. There’s a line of $60 baby dolls for toddlers called Bitty Baby, which have no story attached to them at all. Four years ago, American Girl launched a new brand of $60 dolls for preschoolers called Wellie Wishers, who live in the present day and teach kids about empathy and friendship. For $98, you can also design a doll from scratch—customizing its hair color, nose shape, and skin tone—to look exactly like your child. (American Girl dolls have always been on the more expensive end of the toy market: The original doll and book combo cost $82 in 1986, which is about $150 today adjusted for inflation.)

[Photo: American Girl]

It shouldn’t have come as a surprise that the American Girl of my youth has morphed into something else. It has been three decades, after all, since I first met Molly. But part of me is nostalgic for the past. I’m not the only parent who grew up with American Girl and is now revisiting the brand as an adult, partly because I have a child of my own. In February this year, two historians in their thirties launched the American Girl Podcast, which goes back to the original books from the 1980s and 1990s, and unpacks them.

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“The people who are drawn to what we do (on the podcast) connected seriously with a particular set of historical stories that helped define who we are,” says Allison Horrocks, one of the show’s hosts. “We talk jokingly about a character like Blaire. But at the same time, I’m not a young person, so even though Blaire does not resonate with me, I understand she could resonate with a different generation.”

American Girl is tasked with a tricky business challenge: It must win over today’s children by creating dolls, content, and experiences that resonate with them, while also winning over their parents, who like me, are yearning for the brand that shaped their own childhood. And based on American Girl’s financial woes, it may be struggling to cater to the needs of two very different generations of consumers.

The evolution of American Girl

In 1990, founder Pleasant Rowland launched a line of baby dolls sold through American Girl, beginning a shift away from an exclusive focus on historical fiction. By the late 1990s, American Girl had become enormously popular, raking in annual revenues of $300 million a year (or about half a billion dollars today, factoring inflation). When Mattel purchased the company from founder Pleasant Rowland for $700 million in 1998, it continued churning out dolls that didn’t come attached to “stories” or historical eras.

“The basic thesis is that around the time of the acquisition, there was a movement towards dolls that resemble you,” Horrocks says. “I loved that in the early years, the books allowed you to meet girls whose lives were not at all like yours, but were also similar to you in other ways. And I think that has changed with the new stories.”

[Photo: American Girl]

Mattel—a $4.5 billion toy corporation which also owns Barbie and Hot Wheels—has spent the last two decades attempting to keep the American Girl brand relevant. That has meant not just reimagining the dolls and stories, but developing new ways for children to engage with those dolls and stories.

Jamie Cygielman, who became the general manager of the American Girl brand in May and previously ran marketing at Barbie, points out that consumers expect different things today than they did 30 years ago. For instance, in a retail landscape where Instagrammable pop-up shops like the Museum of Ice Cream are hugely popular with kids, Cygielman believes that creating immersive in-store experiences is very important. Mattel began building out stores immediately after the acquisition, and today, at the brand’s large flagship stores in Chicago and New York, you can not only purchase dolls, you can also purchase experiences for the dolls.

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[Photo: American Girl]

These experiences create new ways for children to interact with their doll, and they also create an entirely new revenue stream. For $10 customers can get their doll’s hair styled and for $15, they can give their doll a spa day, complete with cucumber stickers for her eyes and a fake face mask. Cygielman says the brand has just launched a doll hospital too. “If you want to bring your doll in for a wellness visit—like girls do when they go to their doctor—they can do that,” she says. “There’s a little eye station to get their eyes checked, and they can get glasses for the dolls.” (Eyeglasses and sunglasses for dolls cost $10 a pop.)

And while American Girl still publishes stories to go with some dolls, the brand is no longer wedded to books as the only vehicle for storytelling. Some stores have a narrative component, for instance. The brand has a pop-up in New York called Julie’s Groovy World, that takes children into the life of a 1970s character called Julie Albright, where they can explore paraphernalia from that period, like rotary phones and VW Beetles from the era.

Cygielman says the brand has also been developing content for the American Girl YouTube channel, like how to make DIY dresses for dolls and simple recipes. “The stories we tell through American Girl are really about the rites of girlhood,” she says. “Pleasant Rowland set them against the context of various historical periods, but what’s enduring is the things that are important to girls as they’re growing up, whether that’s their friends, family, or challenging the status quo. The question is how we bring these stories to life today by deploying content our customer base will find relevant and exciting.”

Yet these efforts to generate enthusiasm for the brand through stores and digital content haven’t resulted in increased sales. American Girl has seen a decline in sales for years now, and 2019 hasn’t been an exception, with sales dropping 32% in the first quarter compared to the same quarter last year and 22% in the second. In March this year, American Girl closed two stores in the Mall of America in Minnesota and Boston, leaving the company with 17 remaining stores. And while Mattel has managed to revitalize the Barbie franchise and Hot Wheels is thriving, American Girl is effectively dragging its parent company down. In 2018, Mattel’s sales dropped by 8% from the year before.

Returning to the mission

In some ways, American Girl’s efforts to drum up sales have followed the playbook of other toy companies. Many of the brand’s current products, like the Bitty Baby, Wellie Wishers, and customized dolls, are similar to other products that exist on the market at much lower price points. (Baby dolls are ubiquitous in the toy aisle, and for $19.97, you can buy a customizable doll on Amazon.) While American Girls’ in-store experiences are immersive, so are those at the Disney and Lego stores. “Now the brand is selling a lot of product that really isn’t differentiated enough in terms of purpose,” Allison Horrocks, the podcaster, says.

Ultimately, the thing that has always set American Girl apart from its competitors is its emphasis on historical storytelling. And perhaps returning to these roots will give the brand its best chance of standing out in a crowded market and reversing some of its losses. American Girl still releases historical characters, although they are a much smaller proportion of the business compared to the pre-Mattel days. Cygielman says American Girl is still fully committed to helping children process the joys and challenges of childhood much like Valerie Tripp did in the very first books she wrote for the series. And when American Girl does release a new historical doll, it invests a lot of research in the process, and tries to make her story relevant to the issues girls are currently facing.

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[Images: American Girl]

While the early historical dolls Pleasant Rowland launched were popular, American Girl faced some criticism for not being diverse enough. It wasn’t until 1993 that the brand featured its first African American character, Addy Walker, who escaped from slavery with her family during the Civil War. After the acquisition, Mattel seems focused on telling stories that encompass a broader array of American experiences.

Cygielman points to Melody, a character released in 2016. Her story is set in 1964 Detroit at the height of the Civil Rights movement. She’s a 9-year-old African American girl who is confronting racism directly. At a time of increased racial tensions in America during the Trump presidency, Melody’s story is particularly poignant. And indeed, the brand itself hoped girls would be inspired by Melody to tackle social inequalities head on. “With the struggle for equality and justice still prevalent today, Melody bridges the past and present for girls and shows them how ordinary people can do extraordinary things when they come together to make a meaningful difference,” American Girl said in a statement when the doll debuted.

According to Cygielman, the brand was extremely deliberate about crafting Melody’s story, making sure it was not only accurate, but also represented the authentic point of view of an African American girl living through that moment in history. The company created a six-person advisory board that was involved with every aspect of Melody’s development, from the story to her fashion accessories. Board members included the late Horace Julian Bond, the chairman emeritus of the NAACP board of directors, and several professors of African American studies. The author of Melody’s book, Denise Lewis Patrick, grew up during the Civil Rights era. “She was someone who had firsthand experience as a young African American girl during that time,” Cygielman explains.

Horrocks believes that this kind of careful, heavily researched storytelling is what has always set American Girl apart. It’s also these accurate historical narratives that made the dolls worth their very high price point. In other words, there’s an argument to be made that the brand might do better if it invested more heavily in the historical storytelling instead of building elaborate in-store doll hospitals. “American Girl used to be something distinctive because of its historical roots,” says Horrocks. “Parents felt like they could justify the expense because it was educational.”

Perhaps the brand could even bring back some of the older dolls from the archive. “A lot of the characters who were most popular among women who would now be having children themselves have been put in the vault,” Horrocks says. “I could see there being a longer-term strategy of having a delayed release of these characters and putting them on the market. I think they’d do well.”

While Horrocks and I would love to see American Girl return to its roots, it is also true that the brand faces stark challenges in a toy market that’s increasingly driven by electronic toys and characters from movie franchises. Some of the top toys this Christmas include a Playmobil palace featuring Frozen 2 characters and a Monopoly set that allows kids to use voice commands to play. But some parents are pushing back against these high-tech toys in favor of old-school ones that encourage different kinds of learning. Melissa & Doug, which makes wooden toys for young children, has been thriving; a new company called Lovevery has received funding from top Silicon Valley investors to create analog toys for kids from the time they are born. When these children enter elementary school, their parents will be looking for developmentally appropriate and educational toys for them. If American Girl continues to invest in its historical storytelling, it could very well be what they’re looking for.

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For my part, I’d love to buy my daughter a Molly doll in a few years and watch her experience her story the way I did. The magical thing about the American Girl books is that they didn’t just allow you to immerse yourself in the past; they made you realize that you too were a part of history. In some ways, this was the point of the whole American Girl endeavor. “I was trying to tell the reader: You’re making choices that will have an effect on history,” Tripp tells me. “You’re far more influential than these fictional characters. You need to take yourself seriously and see yourself as a responsible actor because you have a role to play in the world.”

Tripp’s message came through loud and clear when I read the Molly books, and it shaped who I became as an adult. It’s a lesson that doesn’t get old.

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About the author

Elizabeth Segran, Ph.D., is a staff writer at Fast Company. She lives in Cambridge, Massachusetts

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