Barbie closes her Shanghai Dream House

Mattel Inc, the world’s largest toymaker, closed its Shanghai Barbie store yesterday -- the company’s first and only one in China. The store was opened in 2009 in an attempt to expand the market for the company's famous doll.

More on CNNGo: 12 hours inside the Shanghai Barbie store -- could you do it?

Mattel didn’t offer a reason for the closure of the 3,500 square meter Shanghai store which opened in celebration of Barbie’s 50th birthday, but it's well known that the venue has been in trouble, with Mattel lowering sales targets by almost 30 percent in 2010, at least the third time it has dropped targets since the store opened.

The Shanghai Barbie store was spread across six floors, complete with a central staircase decorated by 875 Barbie dolls.

Apart from selling dolls, the Shanghai Barbie flagship store on Huaihai Lu was meant to be more than just a retail experience, offering a restaurant, bar, tea lounge, spa, custom Barbie dolls and children’s fashion section. Clearly something in the equation, which has been tried before in the United States with Mattel's American Girl stores, didn't click with Chinese shoppers.

"Barbie in the United States has a very long history, people grow up with the brand, their parents grow up with the brand, so brand recognition is very high -- in China, though, nobody really knew what Barbie stood for," said Ben Cavender, an analyst with China Market Research, to reporters.

“It would’ve made more sense for them to have set up in malls instead of occupying a building on Huaihai Lu," Cavender said in another interview. "Shops in malls also would have increased awareness of the brand," he continued.

The Shanghai Barbie store closure doesn't indicate Mattel is pulling out of China though, as the company said in a press statement that it will have a “new brand strategy” in China as it expands operations across the country this year.

The new strategy just doesn’t involve a flagship store in Shanghai.

“Mattel continues to be committed to developing the Barbie brand in China,” said a company spokesman. “In 2011, the company will take all of the great experiences previously only available at the Barbie concept store in Shanghai to many more consumers in broader areas across China.”

More on CNNGo: Best Buy closes nine branded stores in mainland China

This is the second high-profile China pull-out in so many weeks, as Best Buy shuttered their stores in their own restructuring, choosing to continue to engage the China market through their joint venture partner Five Star.