A lot has changed at American Girl in the 25 years since Pleasant Rowland launched a mail-order children's book publishing/doll manufacturing company with 15 employees in downtown Madison, Wis., marketing its products as quality alternatives to Barbie dolls. Despite the phenomenal growth of the company, however, executives maintain that one thing has never changed: books are an essential component to the company's mission of simultaneously educating and entertaining girls.

The company, originally founded as the Pleasant Company in 1986 and renamed American Girl Inc. in 2004, has become a publishing powerhouse, releasing more than 40 titles each year for girls ages 8–12, selling 135 million fiction and nonfiction books since 1986, according to American Girl. Besides books, dolls, and doll accessories, the company publishes American Girl magazine and produces movie versions of its books, including 2008's Kit Kittredge: An American Girl (with executive producer Julia Roberts). More than 550 of its 1,946 employees—50 of them dedicated to the book division—work out of its headquarters, a 560,000-square-foot complex in an office park in a Madison suburb. There are nine American Girl retail stores around the country, with two more opening soon: one in Seattle, the other in Washington, D.C.

And American Girl has become a subsidiary of Mattel Inc., the world's largest toy company—ironically, the makers of Barbie dolls. Rowland sold the company to Mattel for $700 million in 1998 and retired less than two years later. "What we publish, how much we publish, what we spend on our publishing, how we market it, really hasn't changed since Mattel acquired us," insists Jodi Goldberg, director of content development, who's been with the company since 1990. She does acknowledge that the company makes "a much louder noise" in the marketplace due to the wealth of resources allocated toward entertainment, such as providing Web content and the "experiential" retail push in its stores, which can include parties and other events promoting its products.

The company is also marking its 25th anniversary with a lot of noise in the marketplace. Not only is American Girl releasing 12 collectible mini-dolls, re-releasing its movies in DVD format, and hosting special events in stores throughout the year, but, in November, just under 800 American Girl fans—half of them girls, half of them adult guardians —will set sail from Miami on a Caribbean cruise. The weeklong cruise will feature movie screenings, activities, and authors Valerie Tripp, Mary Casanova, and Lisa Yee, who will mix and mingle with their fans at meals, readings, and other events. "We wanted to have the ultimate American Girl experience," declared Shawn Dennis, v-p of marketing, who said that the cruise sold out in 48 hours. "Because we are celebrating our 25th, we really want to kick it up a notch to thank these loyal fans."

Perhaps the most obvious change inside American Girl's publishing division since its acquisition by Mattel is its move toward producing fiction featuring contemporary characters—such as Kanani, a Hawaiian girl introduced last year—as well as ramping up the publication of advice and activity books. In 2001 American Girl introduced its Girl of the Year line of contemporary books and limited edition dolls, and in 2010 launched its Innerstar University line of multimedia fiction—this after a decade or more of concentrating on fiction with American historical settings. In fact, American Girl's top-selling title is not even about a fictional character; it's an advice book: The Care & Keeping of You: The Body Book for Girls by Valorie Lee Schaefer, illustrated by Norm Bendell, which has sold more than 3.3 million copies since its 1998 release.

A Move Away from Indie Stores

If American Girl titles seem as if they're carried in more retail outlets than ever before, it's because the company has in recent years aggressively promoted its publications to chain bookstores and to select mass market retailers, like Target, Wegman's, and Michael's. The company's product placement strategy is twofold, explains book publications marketing and sales director Jenifer Warrell: they try to "match the brand with the consumer" shopping with certain retailers, and "make sure the brand is at the forefront" wherever American Girl products are sold.

"If you want to put one title in, that's great," Warrell said, "but your success is going to come from the brand having a presence."

Susan Jevens, a company spokesperson, subsequently added in an e-mail to PW, "Our publishing division's focus is on supporting the overall American Girl brand and our brand initiatives, such as character launches, instead of supporting individual books."

This strategy of emphasizing the overall brand rather than promoting specific titles may to some degree explain why several independent booksellers contacted by PW report a decline in American Girl sales in their stores in recent years. Hannah Schwartz, the owner of Children's Book World in Haverford, Pa., says that she used to "sell everything of theirs." These days, though, while their advice books continue to sell, activity books relating to the dolls don't. She thinks it's because the demographic has gotten younger. "When they first came out, it was right," Schwartz said. "Now, they're out of sync with the age of the kids who play with the dolls."

Another bookseller, Justine Stahlmann, a manager at the Red Balloon in St. Paul, Minn., thinks that American Girl books are as popular as ever, but no longer sell well at her store because of competition from the nearest American Girl retail outlet, which opened in a 20,000-square-foot space inside the Mall of America in 2008. "The store at the Mall is doing just fine," she said. "But it made a difference for us."

Operating its own retail outlets while aggressively seeking placement in big-box stores may have insulated American Girl from the problems facing book publishers that are more dependent on traditional bookstore sales. Last year, American Girl grossed a record total of $487 million in sales, almost double the $287 million in sales reported by Pleasant Company in 1997. The company posted $1.7 million in sales during its debut holiday season in 1986, when it introduced three historical dolls and their accompanying books. However, company officials declined to disclose what percentage of 2010's total revenues were book sales.

Despite speculation by some that books have figured less in the company's business plan since its acquisition by Mattel, Goldberg notes that the company's founder was an educator as well as an entrepreneur, "so books were at the heart of it from the very beginning. They still are." But there are concessions to current trends: only initial print runs are in hardcover now, while subsequent print runs are in paper. And this fall's new historical character, whose identity and story are being kept under wraps until August, will be introduced with the accompanying six-book series made available for the first time in both print and digital formats.

Goldberg readily acknowledges that the company is better known for historical dolls than its book publishing program. But, she adds, the dolls are well-known because of the books. "They absolutely go hand in hand," she says. For Dennis, it's really not about dolls or books anyway, as American Girl moves forward. "We're about the content," she emphasizes, while discussing the launch of the company's e-book line this fall. "We're happy to start finding these great new ways to get that content to girls."