Mattel Inc. Buys Kransco to Become Top U.S. Toy Maker : Retail: The deal will add Hula Hoops, Frisbees and Morey Boogie boards to the El Segundo-based company’s line.
Barbie, that swinging California girl who has outlasted dozens of fads with nary a wrinkle to show for it, can now claim the granddaddy of all fads, the Hula Hoop, as another of her many accessories.
On Monday, Barbie’s maker, Mattel Inc., bought Kransco, the San Francisco company that makes Wham-O brand Hula Hoops and Frisbees, Morey Boogie boards and the increasingly popular Power Wheels ride-on toys. The acquisition, for an undisclosed price, will add $175 million in sales annually and crown El Segundo-based Mattel as the nation’s top toy maker. The deal is expected to close May 31.
Only eight months ago, Mattel bought Fisher-Price Inc. and at the end of 1993, Mattel and Hasbro, maker of GI Joe, were neck-and-neck in sales volume, at $2.7 billion each.
Though Kransco is small--with about a fourth of the sales of Fisher-Price--it brings several top-selling brand names to Mattel’s already formidable and category-leading product lineup. At the same time, it further diversifies Mattel’s sales, which are typically dependent on Barbie and holiday gifts.
The Hula Hoop is still considered the California craze by which all other crazes are measured.
The simple toy, a wide plastic ring that its user rotates around the waist, hips, neck or knees, was introduced in 1958 by the two entrepreneurial Southern Californians who had founded Wham-O 10 years earlier and had sold their first Frisbees just one year earlier.
In its first spring and summer, the Hula Hoop gyrated and wobbled its way to unit sales of 25 million. By the next year, Americans had bought more than 100 million Hula Hoops and other knockoff versions. Kransco bought Wham-O in 1982.
The Hula Hoop has staged a revival in popularity about every seven to eight years--all seemingly without much push from its makers. The latest, most significant revival came in 1989-90 when a Hula Hoopster became a popular guest of Johnny Carson’s on the Tonight Show and sales more than doubled their typical yearly volume of a million.
While Mattel plans to put its considerable marketing and international distribution muscle behind the Frisbee, Boogie board and other Kransco toys, the company could be the beneficiary of another unintentional hoop boom: The Hula Hoop has a central role in the current Tim Robbins movie, “The Hudsucker Proxy.”
Mattel and Kransco have had a decade-long relationship; one of Kransco’s Power Wheels cars carries the Barbie label and look.
The Power Wheels line of battery-operated toys, which sell from about $180 for the basic model to more than $350 for its Porsche line, is the real jewel in the Kransco toy box. It accounts for about 80% of the company’s sales and holds a commanding 80% to 90% of the burgeoning market for such toys, said analyst Sean P. McGowan of the Gerard Klauer Mattison investment firm in New York.