Special Report: Playmates’ 30th Anniversary

Playmates' 30th anniversary has brought about a lot of reflection among its senior executives on where the company started, and the exciting new directions the toy maker is pursuing....
February 1, 1997

Playmates’ 30th anniversary has brought about a lot of reflection among its senior executives on where the company started, and the exciting new directions the toy maker is pursuing.

From its humble beginnings manufacturing baby dolls in Hong Kong to the breakthrough merchandising of Teenage Mutant Ninja Turtles to recent slam-dunk licenses such as the Warner Bros. feature Space Jam, the company has undergone changes not only in product focus but in corporate philosophy.

‘By starting out as a manufacturing company, Playmates became known for making good product-good quality toys,’ says Tim Wills, vice president of marketing, boys. A decade after founder Sam Chan began doll production in Japan, he saw an opportunity in the West and opened a U.S. subsidiary.

Playmates built a reputation for itself in the promotional doll arena in the mid-’80s, with the successful introduction of a talking doll named Cricket. Playmates’ image as a girls toy maker began to change in 1986, when now-president Richard Sallis was hired. Shortly thereafter, he launched his first successful boys campaign after he landed the Teenage Mutant Ninja Turtles license, initiating a toy line plus five episodes of animation. This catapulted the company into a new arena-that of idea generation.

Introduced by Playmates in 1988, the Turtles toy line skyrocketed to US$115 million in sales within one year. Turtles’ speedy evolution from concept to hot-selling product has become emblematic of the way Playmates d’es business.

‘The sooner we get in, fully understand the whole development process, really know the characters, really know how we’re going to translate a property’s play pattern, the vehicle, the accessories-the better,’ says Leslie Levine, vice president of licensing. ‘We move very rapidly to get to the end product, probably faster than any of the larger companies.’

That sometimes means pushing things to the limit, says Levine.

‘Like anyone else, we’d like to have the time so it’s not all on rush, it’s not all overtime. We like to have the proper approval and time frames where everything’s on a prompt schedule rather than an expedited schedule. But usually we’re on an expedited schedule,’ she notes.

According to Gina Beebe, vice president of marketing, girls, that accelerated pace d’es have its advantages. She cites the example of the children’s show The Big Comfy Couch, a license Playmates picked up last year.

‘We signed that in June of [1996] and were shipping goods in October,’ Beebe says. ‘I spent 18 years at Hasbro and I know that Hasbro cannot do something that fast, neither can Mattel. Tyco used to be able to do it but now everyone’s concern is: is Tyco going to be melded right into Mattel?’

A Target Stores buyer who works closely with Playmates says he’s as impressed with the toy maker’s recent efforts on the Turtles license as he was with the stellar success of the launch. ‘They’ve probably squeezed as much out of Turtles as anybody in the history of toys, with the possible exception of [Mattel's] Barbie. They’ve maintained that license longer than just about any other boys action license. That’s because they’ve updated it, they’ve been creative, and they’ve been responsive.’

Playmates president Richard Sallis is often cited as a creative, proactive presence by partners, retailers and animation studios. His willingness to take risks, such as with the unproven Teenage Mutant Ninja Turtles, has helped build the company’s reputation as an entrepreneurial organization.

‘Richard Sallis is very hands-on, a very straight shooter,’ says John Gertz, president of Zorro Productions. ‘You have a sense at other bigger companies that they throw the thing against the wall and if it sticks, great; if it d’esn’t, it d’esn’t matter. Sallis gives you the feeling that they’re putting heart and soul into it.’

The buyer at Target Stores concurs. ‘We meet with them a couple of times during the year so that we can give them input. They’re very receptive and responsive. Richard [Sallis] is a brilliant person when it comes to marketing and planning new licenses. I have very high respect for him.’

Wills adds: ‘Playmates is in a unique position where we are very flexible, in terms of taking ideas and running with them, making them happen. Playmates falls perfectly into this little niche where we can take an idea and make it big. Or we can take an idea and make it semi-big.’

The toy maker’s current roster has no shortage of big projects. Toys based on key licensed property acquisitions in 1996 include an all-new version of Flash Gordon and Space Jam’s talking Michael Jordan toys. The Space Jam line also featured the first collectible figures that have ‘his airness’ in golf and baseball outfits.

According to the Target Stores buyer, the line is a hit. ‘We stocked it again this fall, and again, Playmates was very creative. They brought on a broad assortment that did very well in the marketplace.’

The toy maker’s present licenses reflect another standard begun by the Teenage Mutant Ninja Turtles campaign: that of staying ahead of the pack with fresh product ideas.

‘Because licensing is so broad and it reaches so many categories-publishing, home furnishing, apparel-it has taken off and become very collaborative. We all recognize the need and it’s not successful without that collaborative effort.

‘Partners are communicating, meeting, talking. We’re picking each others’ brains early on, getting each other involved in the process as early as possible,’ notes Levine.

‘We’re cross-promoting with the home video partners, tying in, working together with the retailers,’ says Levine, adding that Playmates will often tailor merchandising efforts to suit retailers’ needs, including point-of-sale and promotional items.

Today, Playmates executives comb a variety of sources to find winning ideas for kids. ‘We try to stay current, see as many people as possible,’ says Levine. She credits her partner, David Okada, senior vice president of research and development and a 27-year veteran of the toy industry, with much of Playmates’ toy development over the past eight years.

Okada was part of the General Mills group responsible for Strawberry Shortcake. Prior to that, as vice president of product design at Kenner, he oversaw Star Wars. Okada and Levine both came to Playmates from Mattel in 1995, and both deal with the inventor community to obtain hot licensing ideas. Levine also attends Toy Fair and the Licensing Show.

‘LIMA (Licensing Industry Merchandisers’ Association) and all of its members have done a really good job of bringing in retailers and promotion partners, whether they’re packaged goods or fast food. They’ve brought in tie-in partners and video partners-so we’re not just talking to ourselves anymore.’

Levine also attends the television markets NATPE, MIP-TV and MIPCOM. At all of these shows, Levine focuses on the burgeoning overseas marketplace. ‘More and more, international is becoming a source for key properties,’ she notes.

Playmates executives unanimously agree that the recent consolidation of the industry has benefited Playmates. ‘I think it’s good for smaller companies,’ says Wills. ‘The retailers know they have to do business with Mattel, but that d’esn’t mean they want to put all their eggs in one basket.’

Beebe agrees. ‘They don’t want to have to deal with just one manufacturer, so a second-tier manufacturer like Playmates is in a very positive position.’ The Target Stores buyer notes that the smaller company has no disadvantage in terms of competing for shelf space.

‘It’s all based on product, so a company’s size is not an issue at all,’ he maintains.

As for Playmates’ close relationships with licensors, ‘it’s always been pretty collaborative and I think it’s getting better because we’ve been able to staff up-to spend more time with the partners making sure that nothing falls through the cracks,’ notes Beebe.

For 1997, Playmates looks forward to the relaunch of the Teenage Mutant Ninja Turtles, a revamping of Waterbabies dolls, and a host of hot property introductions at Toy Fair. Its now legendary status in the boys action arena is still strong, but, says Wills, ‘in the last year and a half to two years, Playmates has sought to rejuvenate its heritage in girls toys.’

When it comes to producing fresh and marketable kids ideas, Playmates is poised to produce a winning lineup in both categories.

Playmates: A firm worth betting on

The world of licensed toys has been likened to a horse race in which the licensor tries to predict which toy company will have a first-place finish in the marketplace. Known as much for its ability to pick kids’ brains as its top-quality toys, Playmates has a reputation as a firm worth betting on.

‘From the very beginning, Playmates saw that our line had potential. What happened then was very interesting,’ says Rand Marlis, president of Creative Licensing Corporation in Los Angeles.

The case in point was the 1996 launch and ongoing success of the Primal Rage toy line, based on the hit arcade and home video game.

‘Everyone was thrilled that we released the line. [Playmates] put out the [sales] projections. Then the line befuddled everybody by doing better than projections. And it continues to do better than projections,’ says Marlis.

Even after sales forecasts were boosted and toys continued to fly off the shelves, Playmates handled the unforeseen retail demand skillfully, Marlis says.

‘What they did was ensure that the line expanded to meet the demand, yet prevented it from being a two-month wonder in with a quick oversaturation in the marketplace and then [the line] would be destroyed. They understood how to manage the business.’

‘Playmates injected a lot of great technology and packaging-all the right elements-and brought a lot of fun into Star Trek: The Next Generation,’ explains Neil Newman, vice president of strategic property development at Viacom Consumer Products.

‘They also had fantastic quality, so the collectors just went berserk for this stuff.’ Newman characterizes the studio’s collaboration with Playmates as intense and ongoing.

‘Playmates has really helped to grow the brand over the years-they’ve been that kind of partner.’

A constant give-and-take between toy maker and studio has developed in which Playmates executives are never afraid to stick their necks out if they believe in something, Newman adds.

‘It’s pretty vigorous and sometimes it’s not pretty. There can be a lot of squabbling back and forth on things and everybody has very strong opinions. But I think that these folks have very good relationships with retailers. They stay very close to the fan base and they listen to all their constituencies. A lot of the creativity comes from that. They listen very well, and Lord knows we say a lot,’ adds Newman.

Licensors working with Playmates appreciate the toy maker’s ideas and expertise, says Karen McTier, senior vice president of North American sales at Warner Bros. Consumer Products, licensor of such properties as Space Jam and Looney Tunes characters. ‘We are not as dependent on toy companies as others because we have the WB Toy Company,’ she says, noting that since Warner Bros. has its own toy design unit, the company can do its own toy sourcing and manufacturing. Still, when it came to Space Jam, Playmates got the call.

‘Space Jam was on a very tight schedule. With Playmates, we were able to really pull together as a team and make a lot of quick decisions and meet all the deadlines we had to meet,’ says McTier, adding that the availability of [Playmates president] Richard Sallis for brainstorming expedited the creative process.

‘I think with a larger company, there are a lot of layers of management and a lot of people that have to be consulted before a final decision is made,’ she says. ‘You can end up with too many cooks spoiling the broth.’

Having direct access to ‘the guy at the top’ was also a boon to John Gertz of Zorro Productions when initiating his U.S. toy launch. Zorro already had a European toy licensee, Ideal Loisiri, when Gertz began his search for a U.S. partner.

‘Playmates owned part of Ideal at that time and Zorro was extremely popular in Europe. Ideal basically called Playmates and told them they should get on board.’

Gertz was impressed with how promptly Playmates was able to respond. ‘Richard Sallis flew up here and made a deal on the spot.’

The Zorro line, which will be unveiled at Toy Fair, is based on a soon-to-be-released feature film with Antonio Banderas and Anthony Hopkins, which will spin off into an animated TV series with Warner Bros. ‘My primary interest in Playmates was and is the creative people they have there,’ Gertz says. ‘It’s a people-oriented thing. I’ve known the team at Playmates for a long time, and I think they have absolutely excellent products and terrific imagination. The people who design their toy line are first-class creative people,’ he says.

‘I think the thing that Playmates has, from what we know of the market these days, is that it has focused on action figures and high play value toys,’ says Gary Richardson, CEO of Mirage Studios, licensor of Teenage Mutant Ninja Turtles.

Richardson reflects a sentiment common among several licensors who work with Playmates. By maintaining a focus and specialty, Playmates can gain an advantage over the larger toy manufacturers who continue to diversify into everything from bikes to plush toys. Playmates hasn’t departed from its roots.

‘Playmates decided to focus on a few key products, primarily on the Turtles and the Star Trek lines, which are evergreen products. At [larger companies], they have a shotgun approach where they’ll try a lot of new things every year and if you’re not a big hit right away, you’re on the bargain basement floor and they’re off to the next new phenomenon,’ says Richardson.

He notes that Playmates takes great care in cementing its relationships with licensors.

‘Playmates will act almost like a partner in launching a product into the world,’ explains Richardson. ‘The president knows us, knows our product, knows what he wants to do and sort of gives the marching orders.’

Waterbabies are ‘reborn’ this year

When asked to describe her recipe for invigorating Playmates’ girls toy line, Gina Beebe, vice president of marketing, girls, fires off a list of carefully chosen ingredients: ‘Fresh new product offerings never been done before. New sizes. New features. New packaging. New advertising.’

Nowhere is this strategy more apparent than in the Waterbabies relaunch Beebe has cooked up for Toy Fair, designed to to push the line closer to its former position as the top U.S. promotional doll, a distinction it held from 1991 to 1995.

‘At Toy Fair ’97, we’ll have a lot more in the girls toys area than we have in the past. We’re calling 1997 a rebirth year for Waterbabies in that we’re launching new brand segments, and we have a major commitment this spring as far as advertising for the new Little Playfuls, which are six-inch Waterbabies,’ says Beebe.

One secret ingredient in the relaunch is its unusually early advertising push, designed to beat other toy makers to kids’ post-Christmas spending. ‘It’s a good time [to run spots] because TV is less expensive,’ says Beebe.

‘What we want to do is generate enough heat before too much pre-Easter [competitive] advertising gets on the air.’

Beebe predicts that early TV exposure will make the line more appetizing to retailers.

‘We already received tremendous support on this Waterbabies campaign when we showed [retailers] our early spring stuff,’ says Beebe.

What catches the retailer’s eye, she notes, are updated packaging and design, signs that the toy maker is refreshing the line, making adjustments to make the product more contemporary. And of course, there is the toy maker’s advertising commitment.

‘We’re going on TV with Waterbabies and when [retailers] see that we’re supporting them there, they will support us on the other end,’ says Beebe. Playmates, which introduced its second top girls line, Baby So Beautiful, in 1995, hired Beebe last summer in a bid to beef up girls toys.

Playmates has built a strong reputation in recent years as a boys toy company, probably due to the overwhelming success of Teenage Mutant Ninja Turtles, notes Beebe. That perception, she adds, is not entirely justified, since more than seven million Waterbabies were sold when the line was introduced six years ago. At that time, the only other hot new doll line was Cabbage Patch Kids.

‘Waterbabies is obviously an important brand for us,’ Beebe says. ‘With the change in the company-hiring me to head up girls toys-we’re trying to have a more balanced portfolio, with an equal share of boys and girls offerings.’

Beebe’s first task at her new position was to get in touch with her industry contacts to undertake what she calls ‘an inventors sweep.’

‘I talked to these people and told them that we’re looking for promotional dolls. Based on those visits, we brought in two promotional baby doll concepts that we will launch at Toy Fair.’

Beebe adds that large promotional dolls had a great year in 1996, and are forecasted to do as well in 1997, yet she isn’t content to rest there.

‘I see opportunities in the small doll area, and we will be showing two offerings there. One is movie-related.’

According to Beebe, taking on the category dominated for years by Mattel’s Barbie is daunting, but worth the risk because ‘the dollars are there.’ Success hinges on retailer participation.

‘If the product is right, if your advertising is right, if the packaging is right, the retailers will be there to support you.’

Additional lines that Playmates is developing include a preschool line called The Big Comfy Couch, based on the animated TV series of the same name.

‘Right now, The Big Comfy Couch has more girl appeal. But we do see an opportunity for a product that will appeal to young preschool boys as well. We are the master toy licensee [for the show] and we started shipping the Molly doll a couple of weeks ago,’ Beebe says, adding that initial sales figures are promising.

The girls toy market is increasingly hard to predict, according to Beebe. For ideas on how to reach girls, she taps a number of sources, including the inventor community, TV programming, and girls trends and fashion experts.

‘The thing about little girls is you lose them younger and younger these days,’ says Beebe. ‘They are so influenced by everything they’re exposed to in the media that at a younger and younger age, they’re getting out of dolls and out of toys. So we look carefully at what they like to do, and what sorts of products we can market to them.’

Star Trek line a classic evergreen

The ever-evolving Star Trek TV series inspired two early toy product lines based on its now-legendary characters and, surprisingly, both fizzled.

‘A now-defunct company called Mego, and then Lewis Galoob Toys, tried to make products,’ explains Playmates’ Wills. ‘They both failed miserably. They put a lot of product in the marketplace and it really hurt.’

Yet these failed attempts were only that: a couple of misfires. They did not mean that Star Trek had no toy future. Playmates was awarded the license in 1992, and the franchise has never looked back.

The toy maker continues to market action figures based on Star Trek: The Next Generation, and new products continue to unfold from both the classic Star Trek series and Star Trek: Deep Space Nine.

The line is flourishing not only for kids, but as a hot ticket among serious collectors.

Star Trek was an ideal toy merchandising platform, and only needed to find the right partner, says Viacom Consumer Products’ Newman.

‘Star Trek is part of American pop culture. It’s the best of what you would consider an evergreen property. It’s a good, steady business,’ says Newman.

One important aspect of Playmates’ approach was the company’s investment in top- quality renditions of the Star Trek figures.

‘Playmates came in and started working on a very basic strategy, which was to make the best replication of figures and put a lot of playability into them. The execution was beautiful: brand-new packaging, brand-new sculpting, and they started making lots of product,’ says Wills.

Beebe says the company has invested heavily in its production capabilities.

One of the things that Playmates d’es extremely well is a particular kind of sculpting that makes its toys look very lifelike, she says.

‘We spend more money on our sculpting than most companies. If you look at Star Trek figures-like the Whoopi Goldberg figure from a couple of years ago-they look exactly like the characters,’ she adds.

From the beginning, Playmates struck a close

working relationship with its licensor, including senior executives.

‘There are very few senior folks on this end that would ever hesitate to pick up the phone and reach Richard Sallis at Playmates,’ Newman says. ‘We have that kind of dialogue, so we’ve certainly used them as a sounding board on Star Trek,’ he adds.

Wills notes that some of the collectors of the Star Trek figures are adults-and extremely demanding fans. ‘Some are fanatics. It’s their fantasy. But at the end of the day, they have a lot of disposable income and they spend a lot of money on their interest.’

Wills explains that this collector base is vocal in its response to the products. ‘They will yell and scream and let you know that something’s not going right, or if they love a character or hate a character. It’s a tough market to be in some days,’ he says. ‘But it’s a fun, fun business.’

Teenage Mutant Ninja Turtles live on

When Hong Kong manufacturer Sam Chan founded Playmates 30 years ago, he probably never guessed that his family-owned company would one day spawn the hottest boys action figures since G.I. J’e. Today, the toy maker’s 1988 launch of Teenage Mutant Ninja Turtles is seen as a historic marketing coup-one that the company plans to equal with this year’s Turtles relaunch.

The Turtles story has the same kind of legendary status in the toy business as it has in the consumer marketplace. It’s a textbook case of a smaller player beating out the competition through a combination of marketing savvy and gut instinct.

‘Long before kids see or test a toy line, somebody somewhere in a company has to have a vision. They have to have a gut feel for it,’ says Playmates’ Wills.

‘Richard Sallis, our president, saw Teenage Mutant Ninja Turtles and said, ‘You know what? There’s something there.”

Sallis believed in that hunch enough not only to tool up for a full action-figure line, but also to invest in five episodes of animation and a huge retail push, despite the fact that boys’ action figures were nearly extinct at the time.

Teenage Mutant Ninja Turtles revitalized the category, exceeding US$200 million in retail sales in 1990, 1991 and 1992. At their peak, Turtles sales constituted about 90 percent of the action-figure market and attracted the attention of all the major Hollywood studios, opening the door for many of the key toy licenses Playmates holds today.

At the outset, Sallis assembled a team of players to work the concept-which had been brought to him in its original, black-and-white comic book form by artists Kevin Eastman and Peter Laird-into a full-blown entertainment and merchandising blitz. Ironically, the same things that attracted Sallis to the Ninja Turtles characters were what had scared larger companies away-namely its offbeat sensibility.

‘Everybody passed on Turtles. It was definitely counterculture,’ Wills explains, adding that this is not unusual for the toy business. Many products that have become major hits were passed over by big toy manufacturers.

Gary Richardson of Mirage Studios was impressed by Playmates’ ability to take a risk on the project. ‘It plays into the commitment on the part of the creators. There wasn’t a marketing study done that says, ‘OK, there are going to be four green Ninja turtles and they’re going to do this, and the kids are going to love it,” he notes. ‘The Turtles set the standard for what we do now. It was so unique, there was no way to bet on it. It was Sallis’ knowledge of the kids industry than enabled him to see that this had some intrinsic, unexplainable feel to it that was going to make it a huge hit,’ says Richardson.

Initially, Playmates’ decision to push forward met with skepticism within the industry, says Wills. Other toy makers wondered whether Playmates, best known for its doll manufacturing, had bitten off more than it could chew.

Sallis’ innovative approach involved taking a concept that had already achieved limited success in a small niche of children’s entertainment – comic books in this case – and translating that success to other categories. Fred Wolf, president and executive producer of Fred Wolf Films, creator of the first five animated episodes, decribes that process as ‘collaborative.’

‘They came up with some really wonderful toy products, and we worked very closely with Playmates trying to incorporate what they had in mind for the toy market. The toys they came up with had great applications as they related to our storyline. It was a wonderful experience working with Playmates on that level,’ says Wolf.

One way of working with a toy company involves dealing with original toy concepts that haven’t appeared in any other form, describes Richardson.

‘[In this case] It’s just a particular artist or a creator with an idea for a children’s product. They then make a presentation to toy companies or animation companies or studios, long before there’s any collateral material out there in the public.’ Once a licensee group of several components is formed, all the players participate in what the line is going to look like, clearly define its target market and how the products will be launched, he explains.

‘There are definitely different requirements for a successful toy line than there are for a successful comic book,’ he adds. ‘You need to make some changes in order to make it work in a different field.’

The initial Turtles team, which in addition to Playmates included Surge Licensing, Mirage Studios and Fred Wolf Films, collaborated perfectly.

‘Suddenly, it was the number one toy line. Every kid in America had the Turtles,’ says Richardson. ‘After those five animated viewings, it just started building. It was quirky and it was different, and it just caught with kids.’

The live-action movie that followed, produced for US$10 million, grossed US$143 million, according to Wills. Equally impressive was Playmates’ creative approach to maintaining the brand over a 10-year span.

‘They created farmer Turtles and troll Turtles and space Turtles and monster Turtles and Dino-Turtles-and it worked,’ Richardson says.

‘Ninja Turtles were unique in that they were capable of being accepted in many different styles and personae.’

Needless to say, Playmates has a tough act to follow with its 1997 Turtles relaunch. But Wills explains that the all-new Turtles will reflect the gutsy flair that made the original line a hit.

‘We’ve worked with a new entertainment partner, Saban [Entertainment], and they’re putting together a new live-action TV show,’ Wills says. The Ninja characters themselves will have aged from 14 to 18 years, a female character will be introduced, and the grittier look of the Power Rangers will be emulated, explains Wills.

‘There has never been a female Turtle,’ he says. ‘Now, very interesting things are going to happen in the group, because she is not a sister, but she is a female Turtle.’ Playmates’ overall strategy with the relaunch, Wills explains, is to rethink the property and make it ‘a little bit older and a little bit harder-edged.’ And certainly, with Playmates’ track record behind it, the relaunch strategy is bound to be smarter than ever.

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