American Girl at Toys R Us (copy)

American Girl expanded its presence to Toys R Us in 2016, as shown above. But that relationship hurt the Middleton company's revenues in the 2017 third quarter after Toys R Us filed for bankruptcy.

STATE JOURNAL ARCHIVES

Middleton-based American Girl cut its staff on Thursday, ending the jobs of 57 employees, including 21 in Wisconsin.

That amounts to a 3.2 percent work force reduction in Wisconsin, and 2.9 percent companywide, spokeswoman Julie Parks said.

“American Girl has been facing some major headwinds for the past several quarters,” Parks said. “The measures today were part of American Girl’s ongoing efforts to truly control costs, align work force with demand, and improve efficiencies where and when we can.”

In the third quarter, which ended Sept. 30, revenue for the upscale doll, book and accessories company was down 30 percent from the third quarter of 2016.

For the first nine months of 2017, American Girl had $234.2 million in revenue, down 18 percent from $285.9 million for the same period in 2016, parent company Mattel said in October.

American Girl has 1,926 employees, including 656 in Wisconsin. Of those, there are 452 at the Middleton headquarters, 61 at the DeForest distribution center, and 143 at the Wilmot distribution and call center in southeastern Wisconsin.

This week’s cuts affect 19 employees in Middleton and one each in DeForest and Wilmot.

The other 36 job losses are in 10 of the company’s 20 retail stores, primarily in Scottsdale, Arizona, and in Seattle, where the bistros will end regular dining, Parks said.

This is the third round of employee reductions in four years at American Girl. In March 2016, the company eliminated 19 jobs in Middleton. In March 2015, as part of a worldwide corporate scale-back by Mattel, the company cut 18 American Girl employees in Wisconsin, including 15 in Middleton.

Parks said other companies’ large-size dolls and the growing prevalence of online entertainment for girls have become increasingly difficult competition for American Girl, whose 18-inch doll and book cost $115.

American Girl also said Thursday it is closing its suburban St. Louis store in February, in a move unrelated to the job cuts. Parks said the Chesterfield, Missouri, shopping mall where the store is located is in foreclosure. Ten full-time and 27 part-time employees will lose their jobs. Parks said American Girl has not decided if it will reopen in the St. Louis area at another location.

It is the first store closing since American Girl started opening its own stores in 1998. After the closing, American Girl will have 19 stores in the U.S., seven specialty boutiques in Canada and two stores in the United Arab Emirates, with a third opening later this month. An agreement for three shops-within-shops in Mexico expires at the end of January and will not be renewed, Parks said.

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Judy Newman is a business reporter for the Wisconsin State Journal.