Papers of Ruth Handler, 1931-2002

Businesswoman Ruth Handler (1916-2002), creator of Barbie, was the youngest of ten children born to Polish immigrants who settled in Denver, Colorado. She moved to Los Angeles, California, and married childhood sweetheart Elliot Handler in 1938. While he studied industrial design, they formed Elliot Handler Plastics, and between 1939 and 1942 Elliot designed and manufactured novelty goods made of the new material lucite, and Ruth managed the business and sales. Their second venture, Elzac, 1942-1944, manufactured costume jewelry.

With their friend Harold (Matt) Matson they formed Mattel, Inc., which was incorporated in 1945. At first they sold doll furniture, and later branched out into musical toys. Capital loaned by family members in 1947 and 1949 helped expand the company which remained a Handler-owned and operated concern until 1963 when shares were first traded on the New York Stock Exchange. Manufacture was sub-contracted and the Mattel plant in Hawthorne, California, was used for assembly alone. In the 1950s, the company hired mostly women, of all races and nationalities and in the 1960s pioneered safety measures that became industry standards.

As executive vice-president in charge of sales and management, Ruth Handler took a gamble in 1955 and bought $500,000 worth of network advertising on the Walt Disney television program, "The Mickey Mouse Club." This led to sustained, year-round advertising direct to children and caused spectacular growth. New toy lines, including burp guns, western pistols, and model Winchester rifles, raised sales from $5 million to $14 million in three years. The company's slogan: "If it's Mattel, it's swell" was ubiquitous. The Barbie doll, created in 1959 by Ruth Handler and named after her daughter Barbara, and the Ken doll which followed in 1961 named for son Kenneth, soon accounted for a substantial proportion of the company's revenues. A talking doll, Chatty Cathy, and Hot Wheels (introduced in 1968) cemented Mattel's position as the dominant toy company in the world with over $100 million in sales.

During the mid-1960s the company adopted a new policy of acquiring non-toy companies in order to lessen dependence on the fluctuations of the toy market. Seymour Rosenberg was appointed Vice President of Finance, and a decentralized management of independent divisions was created that weakened the Handlers' oversight and control. Ruth Handler, now president of the company which had grown to include plants in Asia, Europe, Canada, and Mexico, was increasingly involved in national business organizations, serving on the Advisory Committee on the Economic Role of Women, 1973-1974, the American Cancer Society, California Division, 1972-1978, and the U.S. National Business Council for Consumer Affairs, 1971-1973. In 1970, Handler was diagnosed with breast cancer and underwent a mastectomy. A combination of these factors, as well as poor accounting practices, unwise product decisions, and a fire in their Mexican plant, led the company to post their first loss of $30 million in 1972. A bullish earnings report for the first quarter of 1973 was followed by another loss of $32 million later in the year.

The Securities and Exchange Commission (SEC) began an investigation in June 1973 charging Mattel with issuing false reports, overstating earnings, and understating expenses. A new COO and president, Arthur Spear, was appointed. By a consent decree (September. 1974) Mattel agreed to add independent directors and to appoint a special counsel and new auditors to investigate the company's financial practices. The report, issued in 1975 by Special Counsel Seth Hufstedler, singled out as personally responsible Ruth and Elliot Handler and Seymour Rosenberg, who had been fired in 1972. The report recommended that the company file suit against their accounting firm, Arthur Andersen, which had overlooked accounting irregularities. It found no evidence of insider trading, but declared that Mattel, in an effort to maintain the appearance of corporate growth, had given new meaning to the term "mismanagement."

The Handlers both resigned from the company in 1975. Meanwhile Mattel sued Arthur Andersen and in April 1977 settled out of court. Class action suits by shareholders were consolidated and settled out of court with the establishment of a $30 million fund to which the Handlers contributed two million shares in 1976. Then in 1978, Ruth Handler and four others were indicted for conspiracy, mail fraud, and filing false statements and reports. Ruth Handler pleaded not guilty but changed her plea to "nolo contendere," saying: "I believe that I am innocent of any criminal wrongdoing. But I decided with my attorney's concurrence to plead 'nolo.'" Handler and Rosenberg were sentenced to 500 hours of community service for five years and to pay fines. During her probation Handler was instrumental in creating the Foundation for People (an acronym for Program for Ex-Offenders on Probation for Learning Experience) to provide white collar probationers with opportunities to do useful public service.

Meanwhile, unable to find a well-fitting breast prosthesis after her mastectomy, Ruth Handler had gone into business in 1976 with Gerald Peyton, founding Ruthton Co., which manufactured silicon breast prostheses called Nearly Me. Handler managed the company, appeared frequently in the media and visited department stores where she personally fitted breast prostheses. In 1991 she sold the company.

Although neither of the Handlers had any formal business training, Ruth Handler completed a Business Executive course at the University of Caliifornia at Los Angeles (UCLA) in 1957 and was invited to teach a course on Consumerism at the UCLA School of Management in 1974 and on Managing Small Business in 1975.

Both Handlers were frequently honored for their business achievement. Ruth Handler was singled out as as Outstanding Business Woman by the National Association of Accountants (1961), Woman of the Year by the Los Angeles Times (1968), and one of seventy-five Outstanding Women in America by the Ladies' Home Journal (1971). Ruth and Elliot Handler were inducted into the Toy Industry Hall of Fame (1988) and Ruth was the first to be named Woman of Distinction by the United Jewish Association (1992). Her fame as the "mother" of Barbie continued to grow, especially after the publication of her autobiography, Dream Doll, in 1994. In 1994 and 1999 she was once more associated with Mattel, Inc., in celebrating the 35th and 40th anniversaries of Barbie.

Ruth Handler died in Los Angeles, California, on April 27, 2002.