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Toylines (alphabetical order)
Babe (1998)
Godzilla (1998)
Kim Possible (2004)
Samurai Jack (2004)
Scooby Doo The Movie (2002)
Scooby-Doo! (2001)
Tenchi Muyo (2001)
The Adventures of Pinocchio (1996)
Wishbone (1996)
Toylines (chronological order)
1996 The Adventures of Pinocchio
1996 Wishbone
1998 Babe
1998 Godzilla
2001 Scooby-Doo!
2001 Tenchi Muyo
2002 Scooby Doo The Movie
2004 Kim Possible
2004 Samurai Jack
Company history
About Equity Marketing Inc    
Producer of Burger KingĀ® Kids Club promotional toys: The Simpsons, Nightmare before Christmas, the Lion King, Toy Story, Space Jam, Pokemon.

Design and manufacturing services for Tyco, Applause.

1995: First toy license: Looney Tunes.
1998: Master toy license for Babe.
Profits 'r' Us    
Equity Marketing, Inc. (nasdaq: EMAK - news - people) sounds more like an investment bank than a company that culls the lion's share of its profits from creating plastic dinosaurs, pigs and Mighty Morphin Power Rangers. You've probably bought some of the company's products without even knowing it, because Equity designs and manufactures toys based on characters from movies like The Lion King, Toy Story and The Lost World: Jurassic Park, that Burger King bundles with its kids meals.

But if you think that promotional freebies are merely a five and dime business, think again. The global market for giveaways used to attract people to a particular restaurant, a particular video store or a particular brand of gas is about $60 billion annually.
Equity's mission is to create toys based on popular movie and cartoon characters that businesses give away to increase sales of their core products. In the 10 years that Equity has worked with its biggest customer, Burger King, the company has sold more than 650 million toys. It costs the company 10 cents to manufacture each toy, which it sells to Burger King for 13 cents, a 25% mark up. This helps to explain the company's adolescentlike growth spurt. Last year Equity revenues jumped 33% to $112 million while profits soared 60% to $7.4 million. One reason for the company's stellar performance is that it doesn't worry about stagnating inventory. If the kids give the thumbs down to the Hercules doll, that's not a big problem for Equity, since it's Burger King that eats the surplus.

Despite Equity's rising position in the global toy market, Donald Kurz, the company's president and co-chief executive officer, insists that he is not a toymaker. "We're really in the licensing and promotions business," he says.
More about Equity    
Founded in 1984 as a company that marketed free trips for airlines through promotions--originally under the umbrella of Marketing Equities International--Equity Marketing was subsequently split off into a separate entity in 1991, when Kurz and his co-chief executive officer, Stephen Robeck, engineered a leveraged buyout. They then relocated the company, from New York to Beverly Hills, to be closer to the movie business.

When The Lion King came out in 1994, Burger King, which is owned by U.K.-based Grand Metropolitan PLC, bought 30 million Jungle Cat toys from Equity, and saw sales of its kids meals triple. Equity's sales that year jumped 39%.

Some top Equity properties: Lost World: Jurassic Park (Universal Pictures) Looney Toons (Warner Bros.: international distribution) Toy Story (Disney: license for home-video release)Babe, the sequel (Universal Pictures) Godzilla (Sony Pictures) Hercules (Disney: license for Latin America) Anastasia (20th Century Fox)

Too much reliance on one business partner can be unhealthy. Last year, Burger King made up 69% of Equity's total business, down from 85% in 1993. To further move away from its heavy dependence on Burger King, Equity is shifting more of its emphasis to retail toys. While promotional toys yield robust gross profits, retail toys offer double the margin--50%--according to Gerard Klauer Mattison analyst Sean McGowan.

But Furman Selz analyst Rothberg warns that although Equity's toys boost the client's image, the success of their campaign depends on the toy. "You're not always going to have that killer license," he says.

To shore up its promotions business, Equity moved into the acquisitions realm and, last year, purchased EPI Group Ltd., which came equipped with the toy giveaway license for Shell Oil. Given the kind of market in which Shell participates--characterized by a large number of locations, a commodity product and competitive pricing--Equity's profits should get pumped up even more.
In addition, Equity recently forged promotions deals with Blockbuster Entertainment, Holiday Inn, Pillsbury and Pepperidge Farms, and, via its Shell contract, is revving up business on the NASCAR circuit.

Although Equity's products are sold at major retailers like Toys R' Us, Kmart and Wal-Mart--the retail toy division accounts for 25% of the company's revenue, and growing--it's one-shot promotions that have fueled the company's growth. And despite the fact that Equity and Burger King are frozen out of the Disney license here in the States--Disney inked an exclusive deal with McDonald's last year--Equity is working with the magic corporation to produce toys for the relatively untapped Latin American market, which is helping Equity to become a more global player.

Sure, there are risks in being in the toy promotions game. Equity often has as little as six months to fill a massive order, from conception to manufacturing the toys in China to final distribution, with no margin for error, since such promotions are usually preceded by gaudy ad campaigns. And uncertain economic situations can translate into disappointing sales figures.
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