Stuffy Old Dakin Comes Roaring Back : Toys: New lineup of popular critters--and new faces at the top--are returning the Burlingame-based firm to profitability.
A kindly purple dinosaur, an asthmatic Chihuahua and a cat whose driving is a literal smash are helping to return a leading stuffed toy and gift company to plusher times.
This menagerie is part of Dakin Inc.’s strategy to pull out of a deep slump and return to profitability.
“There is a new spring in the step of the Dakin company,” said Robert G. Solomon, Dakin’s chairman and chief executive since he acquired a controlling interest in the firm a year ago.
Adding characters from hit movies or television shows--such as Barney the dinosaur and Toonces the driving cat--to Dakin’s core critters is Solomon’s plan for turning the Burlingame-based company around.
For decades, Dakin has been a leading maker of stuffed toys, known as plush in the industry, a market estimated at $1 billion.
The company peaked in 1989, when it had $225 million in sales, mostly from its Garfield line licensed from the comic strip. But when the paunchy pussycat’s popularity waned, so did Dakin’s revenue, plunging to $75 million in 1991. The company lost more than $50 million over 1990 and ’91.
Privately held Dakin expects sales to remain at about $75 million this year and post a loss for 1992, Solomon said. But the company “began to show a speck of black ink” in the current quarter and projects a profit for 1993, he said.
Solomon, 38, previously was chairman and CEO of Applause Inc. of Woodland Hills. The company, a Dakin rival, pioneered turning out licensed plush characters, starting with Smurfs and later with Cabbage Patch Dolls, Sesame Street characters, Roger Rabbit and E.T.
Solomon bought a controlling interest in Dakin for an undisclosed sum last December. Since taking over, Solomon has reorganized Dakin, which he described as “reactive and staid” when he joined it.
Solomon ousted top executives, including the heads of sales and marketing, and brought in new ones, some from Applause. He moved marketing, sales and product development to Southern California--closer to big licensing companies--and created a new licensing division.
In recent months, Dakin won the rights to several hot products, notably Barney, the purple dinosaur with a popular children’s show on public television.
“Barney is probably one of our No. 1 best sellers,” said Gale Jarvis, executive vice president of toy retailer F.A.O. Schwarz in New York. “It was doing well before it got in” the store.
Other new licenses include Ren & Stimpy, the cartoon Chihuahua with asthma and his feline sidekick seen on Nickelodeon and MTV. Then there’s Toonces, the cat who can drive but inevitably crashes on “Saturday Night Live.”
New licensed products will appear next year, including figures from the upcoming Steven Spielberg movie “Jurassic Park” and “Thumbelina,” an animated musical produced and directed by Don Bluth, who directed “The Land Before Time.”
But Solomon, determined to avoid the hangover Dakin got from over-dependence on Garfield, is also keeping up the company’s core business. Bears, puppies, kittens and other animals appear as stuffed toys, hand puppets, mobiles and super-soft versions for infants.
His formula is to have about a third of the company’s sales from the core animals, a third from hot licenses and a third from seasonal products--items tied to holidays.
Toy industry analysts said Dakin’s strategy and products look promising.
“The company is being turned around. The game plan appears to be quite well thought out,” said David S. Leibowitz, senior vice president of American Securities Corp. in New York.
Using licenses is one of the few ways plush toy companies can give themselves a chance to succeed, said John Taylor, an analyst with L. H. Alton & Co. in Portland, Ore.
Dakin is “going to need to rely on its wits and charm to get the most attractive licenses,” he said.
F.A.O. Schwarz’s Jarvis also foresees continued success for Dakin.
“They’re a good strong group of people who know how to run a business and revamp it and make it more exciting,” she said.
