Company History:
Toy Biz, Inc. is one of America's most profitable toy companies. Originally founded in Montreal, Quebec, the business was reincarnated as an American firm in 1988. Since that time, Toy Biz has focused strongly on creating toys based on Marvel Comic's cast of characters, which includes the Amazing Spider-Man, the Incredible Hulk, and the Uncanny X-Men. By the mid-1990s, Marvel-related action figures and playsets generated about 50 percent of Toy Biz's annual sales. In addition to its core Marvel license, Toy Biz held short-term rights to names and symbols associated with Gerber infant goods, the Muppet characters, Coleman camping equipment, Apple computers, Revlon beauty products, NASCAR auto racing, and others. One-third owned by Ronald O. Perelman's Marvel Entertainment Group since 1993, the firm appeared poised to become a wholly-owned subsidiary of this $5-billion group of companies early in 1997.
Canadian Roots
The history of Toy Biz can be traced to Chantex Inc., a Canadian company created in the late 19th century. Sol Zuckerman, the founder's grandson, inherited the business in 1961, when it was earning $160,000 in sales. The restless 21-year-old maintained the family firm as a core interest, bringing its sales to nearly $4.5 million by 1980. In the meantime, he devoted more of his concentration to the acquisition and operation of several Montreal nightclubs and toyed with the idea of running for public office. Zuckerman's tony discotheques were frequented by celebrities and he earned a reputation as a fast-talking, fast-moving wheeler-dealer. But Zuckerman beat a hasty retreat from the disco scene in 1980 after witnessing the assassination of a colleague by letter bomb. In the 1980s, he revisited the infants' and children's goods business that had bored him in years past.
Zuckerman transformed himself into one of Canada's highest-flying merger and acquisition artists during the ensuing decade, and his family business emerged as one of the country's fastest-growing enterprises. In 1980, he merged Chantex Inc. with Earl Takefman's Randim Marketing, Inc., a manufacturer and wholesaler of school supplies, to form Charan Industries Inc. By the time Charan went public in 1984 its annual revenues had multiplied fivefold from 1980, to $20 million. The firm's Charan Toy Co., Inc. subsidiary emerged as a leading toy company with a particular emphasis on licensing. In 1985, it held the Canadian rights to nine of the top ten toys in the North American market, including the immensely popular Cabbage Patch Kids name and logo.
Charan employed what analyst Ira Katzin of Prudential-Bache Securities Canada Ltd. (Toronto) called "a very novel approach" to consumer goods branding, an approach that would be carried on when Charan Toy was reborn as Toy Biz. The company was among the first to implement its brands--both licensed and proprietary--very broadly, applying the venerable Cooper hockey equipment brand (acquired in the mid-1980s) to Charan's existing childrenswear line, for example. This strategy would become commonplace throughout the consumer goods and entertainment industries and form a cornerstone of Toy Biz's success in the 1990s. |