Toying With a Power Play : With Civic Help, a Local Industry Could Gain Global Prominence

Most Californians would be surprised to learn that there are 487 toy companies in the Los Angeles area. And the true count might be 600 or more, says Charlie Woo, head of Mega Toys Inc., a prime mover in the industry of toy importers, distributors and manufacturers near Downtown Los Angeles that has grown like a bird’s nest, twig by twig, in the last decade or so.

The industry is a living example of the unpredictable benefits a community reaps from ambitious people and global trade.

Woo and his family started out in 1979 importing toys from warehouses in their native Hong Kong. Their customers were “people who worked in restaurants and other jobs, who would buy toys wholesale to sell at weekend flea markets,” Woo explains.

“Then their business grew. I bought four warehouses, and my customers became my tenants and my competitors,” he says, driving past storefronts and warehouse buildings--and derelicts--on Wall and Winston streets in Downtown’s bleak Skid Row.

The small companies that have set up business in these unpromising surroundings employ more than 5,000 people and do about $1 billion in sales a year, sending toys throughout the United States and into Mexico and South America.

They represent one part of a local toy industry that, with support from city and county government, could bring further global prominence to Los Angeles. El Segundo-based Mattel, the world’s largest toy company at 21,000 employees and $3 billion in annual sales, is the giant of the local scene. Other companies range from Applause Inc. in Woodland Hills, a leader in stuffed animals that employs 600, to A&A; Plush in Compton, the U.S. arm of a Seoul teddy bear supplier, with 20 employees.

Imperial Toy, housed in Henry Ford’s 1913 car factory near Downtown Los Angeles, supplies soap bubbles, marbles, jump ropes and makeup kits to children the world over; Bandai America in Cerritos distributes Mighty Morphin Power Rangers, today’s hottest toy.

In fact, more than 60% of the $12 billion in toys sold in U.S. retail stores last year were probably distributed from Southern California.

Yet most Southland toy companies must struggle to get on the radar screen of big retailers like Toys R Us and Kay-Bee. When the Toy Manufacturers of America hold their 1,600-exhibit Toy Fair in New York next month, the Southern California contingent will be looking for recognition. It will be trying to persuade toy vendors to hold a future trade fair in Los Angeles. But the competition is stiff: Toys R Us, the largest retailer, is now ordering suppliers to show their wares at its facilities in Dallas.

“Los Angeles City Hall should mount an effort; they’ve got a convention center to fill,” says Woo, who came here in 1968 to study physics at UCLA.

The present is a crossroads for many local toy companies. They need to learn more about customs and consumer product regulations; international customers from Mexico to Argentina account for roughly half their business. And they may have to manufacture more goods locally, because Mexico--which needs jobs for its low-wage labor--is balking at importing U.S. toys that originated in low-wage China.

Fortunately, help is available--from RLA, which arranges educational meetings for entrepreneurs with government officials, and from Mattel, which helps keep them up to date on forms and regulations.

Fermin Cuza, Mattel’s vice president for international trade, sees helping small competitors as gaining allies. “When I go before trade and customs officials, I can speak for groups of companies rather than Mattel alone,” he says.

The local industry also has many things going for it, notably geographic location and the ports of Los Angeles and Long Beach. Local companies can get toys from Hong Kong into a customer’s hands anywhere in the United States in 14 to 16 days; it would take 25 to 30 days for goods to move to the East Coast. When the Alameda Corridor is completed, goods will move even faster through Los Angeles.

Above all, the local industry has knowledge and adaptability. In a grimy area on East 4th Street, Tai Tung International receives customers in a well-lighted showroom filled with brightly colored dolls and toy trucks.

“We sell to companies that have truck stops across America and they buy trucks,” says May Fong of Tai Tung, which manufactures in Hong Kong and has another outlet in Jersey City, N.J.

In a Compton warehouse, A&A; Plush receives an Argentine gift shop owner who wants to order their furry animals, many now made in Qingdao, China.

“Wages in Korea got too high,” explains marketing manager Allan Kim, “so production moved to Qingdao.” Qingdao, in northern China, is across the Yellow Sea from Seoul, so trade has cut a new route leading through Los Angeles to Buenos Aires.

Yes, but does an industry based on imports and distribution make good jobs in this community?

Sure, beginning with business for bankers, accountants, customs brokers and lawyers.

“The Chinese-American banks, Cathay Bank and Far East National Bank (led respectively by Wilbur Woo and Henry Hwang) knew how to finance the toy trade first,” says Charlie Woo. “Now Bank of America has learned how to do it.”

It also makes jobs for warehouse workers and, in the new age, for higher-paid employees who can work with electronic data interchange. Imperial Toy Executive Vice President Jordan Kort--son of Fred Kort, who survived the Treblinka death camp and founded Imperial 25 years ago--explains.

“We and our customers are linked on-line, so inventory is updated constantly,” Kort says, standing near a line of bubble mix containers that already have pre-printed labels and prices for the Walgreen’s chain in the East.

“Today’s just-in-time distribution demands a more technically competent person. . . . . It’s more than putting a box on a pallet,” Kort says. “And we’re proud of people who come in unskilled and grow into the position. You see them take on responsibility and become motivated. It’s very positive.”

The lesson of the toy business’ growth is very simple: Drive and hard work can build a life, an industry, a great city.