Playskool, Inc.

views updated

Playskool, Inc.

1027 Newport Avenue
Pawtucket, Rhode Island 02862
(401) 431-8697
Fax: (401) 727-5047

Division of Hasbro, Inc
Incorporated: 1928 as Playskool Institute
Employees: 795
SICs: 3944 Games, Toys & Childrens Vehicles; 3751 Motorcycles, Bicycles & Parts; 3940 Toys & Sporting Goods; 3942 Dolls & Stuffed Toys

Playskool, Inc. is a leading manufacturer of childrens and infants toys. Its core line consisted through much of the companys history of wooden toys such as blocks and peg boards, which were considered by the public and by child experts as educational. The company also owns some of the best known American toy brands, such as Mr. Potato Head and Play Doh. The Playskool brand name is found on diverse items such as clothing, stuffed animals, and ride-on vehicles. Playskool is the largest manufacturer of wooden blocks in the United States. The company licenses its name to a line of preschool books published by Dutton and has entered the interactive computer game market with software based on the Mr. Potato Head character.

Early History

Playskool was founded by a former Milwaukee schoolteacher, Lucille King, in the 1920s. King apparently had abandoned her teaching career and was working at the John Schroeder Lumber Company in Milwaukee when she came up with the idea for Playskool toys. She and another teacher had developed plans earlier for wooden toys for use in the classroom. King took her plans to the lumber companys management and launched the Playskool Institute in 1928. Kings line of toys consisted of basic, durable wooden items that aimed to develop coordination and stimulate the minds of children. By 1930 Playskool produced more than 40 different toys, including a pounding bench, wooden beads and blocks, a table-mounted sandbox, a pegboard, and others. Playskool Institutes slogan was Learning While Playing, and some items were billed as Home Kindergarten. Another slogan the company used was Playthings with a Purpose. As early as 1930 Playskools toys were endorsed by child guidance experts, and the aura of educational enrichment clung to the brand.

Playskool Institute first operated as a division of the John Schroeder Lumber Company. In 1935 the lumber company sold the division to a Chicago manufacturer, Thorncraft Inc. Thorncraft next sold Playskool to Chicagos Joseph Lumber Company in 1938. Harry Joseph, the lumber companys head, then hired Manuel Fink, a buyer for a leading Chicago department store, to head the Playskool unit. Fink brought in Robert J. Meythaler to assist him. Meythaler was trained as an accountant and also was an amateur woodworker. He quickly sensed the possibilities in the Playskool line, and within a few years of being hired by Joseph Lumber, he and Manuel Fink bought the Playskool division themselves. They named the new company Playskool Manufacturing Company.

Meythaler built on the educational cachet with which the brand already was invested by advertising in magazines for sophisticated consumers such as Parents, Redbook, and Psychology Today. Some of the early Playskool toys were deemed to boost a childs intelligence or, at least, to prepare children for intelligence tests. For example, a wooden mailbox introduced in the 1940s had differently shaped holes and pegs. Learning to push the round peg into the round hole and the square peg into the square hole prepared children for a standard test of development. Playskool also extended its line of educational toys by acquiring other manufacturers. In 1943 the company bought the J.L. Wright Company, manufacturer of Lincoln Logs. J.L. Wright was the son of famed American architect Frank Lloyd Wright. While with his father during the building of the landmark Imperial Hotel in Tokyo, J.L. Wright came up with the idea for interlocking logs as a construction toy for children. Lincoln Logs was a leading brand in the American toy market and is still manufactured.

Another essential purchase Playskool made was that of Holgate Toys in 1958. Holgate was a Philadelphia woodworking company dating back to 1789. The company specialized in utilitarian products such as broom handles and brushes until some time in the 1930s, when a daughter of the firms treasurer married a notable child psychologist, Lawrence Frank. Frank had been a leader of a movement in the 1920s to establish child study institutes in the United States. He persuaded his father-in-laws company to begin producing wooden toys, which, like Playskools, would be good for children. Holgates toys were designed by Jerry Rockwell, brother of the artist Norman Rockwell. Jerry Rockwell is credited with designing some of the most enduring toys in the Holgate and, later, Playskool line, including a cobblers bench, stacking rings, nesting blocks, pegboards, and lacing shoes. When Playskool bought Holgate in 1958, Rockwell went to work for the new company. There he created Playskools Tyke bike, another enduring favorite toy that is still part of the Playskool line.

Growth in the 1960s

Another important acquisition was that of the South Bend Toy Manufacturing Company, which Playskool bought in 1960. South Bend had an established line of doll carriages and also made equipment for wooden outdoor games such as croquet and horse shoes. Playskool built its product line up carefully, buying companies that meshed well with its own existing lines. In 1962 it acquired the Halsam Company, an established manufacturer of wooden blocks. Halsam also owned the Embossing Company, which was the only American manufacturer of embossed wooden blocksthe common alphabet blocks. The Embossing Company also was also a major manufacturer of checkers and dominoes. Playskool got the block, embossed block, and checkers and dominoes lines when in it bought Halsam in 1962.

In 1960 Playskools sales stood at about $12 million, which was considered respectable in the notoriously difficult and unstable toy business. Robert Meythaler continued to direct the companys marketing efforts toward magazines for educated parents, and the theme Learning While Playing was still in use. By 1966 sales had almost doubled, to $23 million. Meythaler attributed this big jump to the introduction of the federal Operation Headstart program. Headstart emphasized just the type of play-learning that had long been associated with Playskools products, and the popularity of the program expanded the market for educational toys.

The Milton Bradley Years: 196884

Playskool had to start up new factories in the mid-1960s to keep up with demand. Though the sales outlook for the company was good, costs associated with plant construction led to steep declines in earnings. In 1968 Playskool was bought out by the Milton Bradley Company. Milton Bradley, located in Springfield, Massachusetts, was famous for its board games, including Monopoly. As a subsidiary of Milton Bradley, Playskool retained its focus on preschool and infant toys. The company did begin advertising on television, which it had previously shunned, and in 1970 spent $1.5 million on print and TV ads. Playskool advertised during the popular childrens show Captain Kangaroo, while still reaching out to parents and teachers through magazines such as Good Housekeeping, Mc-Calls, and Instructor.

Playskool retained its own headquarters, separate from Milton Bradleys Massachusetts establishment. In 1973 Playskool consolidated its various offices and plants into a giant million-square-foot complex on Chicagos northwest side. The company operated there throughout the 1970s. By 1980 Playskools factory employed approximately 1,200 people. In that year the city of Chicago issued $1 million in industrial revenue bonds to help Playskool modernize its production facility. Though the bonds were issued as an incentive for the factory to stay in the city and add jobs, Playskool soon announced that it was laying off almost half its work force. Then in 1984 the largest toy company in the United States, giant Hasbro, Inc., bought Milton Bradley, Playskools owner. Hasbro was known for its G.I. Joe doll, one of the best-selling toys on the American market. Shortly after Hasbro purchased Playskool, the company announced it would close the old Playskool plant in Chicago. The factory employed approximately 700 workers, and Hasbro announced that most of them would be dismissed. Manufacturing was to be consolidated with other Hasbro plants on the East Coast. This action prompted a lawsuit by the city of Chicago, which was incensed at the factory closing coming on the heels of the renovation the city had subsidized. The case made national news, as it was one of the more prominent of a series of similar apparent abuses of industrial revenue bonds. Outraged civic groups in Chicago organized a boycott of Hasbro. Eventually, Hasbro agreed to keep the factory operating for a short time while it retrained and found jobs for the dismissed workers.

Under Hasbro in the 1980s and 1990s

In 1985, the year after Hasbro bought the company, Playskool unveiled an updated line of infant products, such as bibs and bottles, under its Tommee Tippee brand name. Hoping to snare a wider share of the infant market, which was swelling because of a mini baby boom, Playskool spent an estimated $5 million on advertising, using Hasbros ad agency. Like other Playskool products, the Tommee Tippee line had been researched extensively and was advertised in magazines catering to sophisticated and educated parents. Playskool also used television spots, with the theme Feeling good about the Playskool years. Under Hasbros ownership, Playskools management worked out of Pawtucket, Rhode Island, operating Playskool as a division of the parent company. Most of Hasbros toys were for older children, and Playskool toys were made almost exclusively for children under six. Hasbro let the Playskool division concentrate on toys for preschoolers, even putting the Playskool brand name on existing Hasbro preschool toys. For instance, Playskool put its brand name on Play Doh, a favorite childrens modeling clay. Play Doh had been acquired by Hasbro in 1987 when it bought Tonka Corp., which owned Play Dohs maker. So this well-known product became Playskool Play Doh, and its line was revitalized with tie-ins to other Playskool and Hasbro toys.

Playskool also extended its product line by offering lower-priced toys that were in direct competition with toys sold by Fisher-Price, the long-time leader in the infant and preschool market. Playskools rattles, shape sorters, stacking toys, and musical mobiles gained market share for the company, as these were all priced under Fisher-Prices similar models. Playskool licensed toys from other designers as well, lending its name to items that were perhaps not as educational in focus as its original line. In 1991 Playskool bought the rights to Teddy Ruxpin, a talking teddy bear made by Worlds of Wonder. Teddy Ruxpin, selling for about $60 retail, had been one of the most popular toys of the mid-1980s, bringing in about $200 million annually at its peak. When the bear lost its fad appeal, its manufacturer went bankrupt. But Playskool bought the rights to produce and market not only the Teddy Ruxpin bear itself, but peripheral products such as software associated with it. In a similar move, Playskool signed a licensing agreement in 1993 with the creators of the Barney dinosaur. Barneys television show fixated children worldwide in the early 1990s. Playskool produced a talking Barney doll, a Barney phone, Barneys Animal Keyboard, and Barney Play Doh, among other Barney items.

Playskool products proliferated in the mid-1990s. Some toys remained close to the companys early theme of Learning While Playing, such as a preschool baseball game that developed coordination and a toddler tricycle. Other new Playskool toys were extensions of other brands, such as Play Doh play sets and Mr. Potato Head products. Playskool also marketed a variety of general preschool toys such as its Magic Glamour Party makeup and jewelry and the Cool Tools toddler tool set. Infant items included a swing, walker, and musical crib toy. And as Playskool had licensed Barney and Teddy Ruxpin, the company also licensed its name to other vendors. In 1995 the Dutton publishing company signed an agreement with Playskool to use the toy makers name on a series of childrens books. The books were to be color coded to match Playskools Ages and Stages program. Playskool used four different colors on a line of infant and toddler toys called Ages and Stages, to indicate four levels of child development. The book publisher wanted to build on the visibility of the Ages and Stages theme to market books for young children. Also in 1995 Playskool entered an agreement with Nickelodeon, the childrens cable television network, to develop products based on its popular shows.

Despite all the new products, Playskool apparently was not producing profits. In 1996 Hasbro switched the Playskool division advertising account, worth $30 million, from Griffin Bacal to Arnold Communications in Boston. A year later Hasbro switched the account again, moving it from Arnold to Grey Advertising in New York. In 1997 Hasbro attempted to scale back the Playskool organization, dropping unprofitable toys. More difficulty for the company followed, as it launched a new series of toys that became controversial. In January 1997 Playskool began marketing a line of toys and infants products made with a special antibacterial plastic. The antibacterial agent, Microban, was infused in the plastic and was supposed to reduce the spread of bacteria from children sharing toys. Microban received a lot of publicity, both good and bad. But by the end of 1997 Hasbro was forced to pay a fine and retract claims it had made regarding Playskools Microban-treated toys. By 1998 Playskool had scaled down its toy line considerably, dropping from 80 to 100 items. The brand was sustained by licensed products such as those associated with Barney and another childrens television character, Arthur. The company also placed its hopes in Teletubbies, a British television sensation. Hasbro licensed Teletubbies for Playskool, and manufactured Teletubbies dolls to hit the market when the show began airing on American television in April 1998.

Hasbro admitted that its preschool division was not performing well in the late 1990s and attempted to bring it back to profitability by cutting some items and bringing in more licensed products. The toy market had changed considerably since Playskool was invented in the 1920s. At the end of the 1990s the toy industry was dominated by two major players, Playskools parent Hasbro and its rival Mattel. Many of the best-selling toys of the 1990s were tied to movies, such as Star Wars, Jurassic Park, and Batman. Playskools original educational mission seemed somewhat at odds with the intense competition and faddishness of the 1990s toy marketplace. Yet Playskool was part of a huge company with expanding international markets and extensive marketing ability. It seemed possible that Playskool as a brand would evolve into new toy areas. Hasbro had great success with a new division of Interactive Games, computer-based games for children. Playskools Mr. Potato Head was the star of one such game, for children aged three to seven years. Hasbros ability to turn the Playskool brand to many different uses seemed indicative of Playskools strength and renown and, no doubt, its continued prevalence.

Further Reading

Bayer, Tom, Playskool Relaunches Tommee Tippee, Advertising Age, October 21, 1985, p. 80.

Berg, Eric N., King of the Playroom Hath Fallen, New York Times, December 25, 1989, pp. 37, 39.

Byrd, Veronica, Playskool Gives Voice to Purple Dinosaur, New York Times, July 9, 1993, p. D3.

Dutton Creates Playskool Imprint, Publishers Weekly, January 30, 1995, p. 40.

Furger, Roberta, Spud Alert, PC World, May 1996, p. 306.

Greenhouse, Steven, Suit on Toy Plant Ended in Midwest, New York Times, February 2, 1985, p. 42.

, Tighter Rein on Incentives for Business, New York Times, January 13, 1985, p. E4.

Hasbro Battles Mattel at Toy Fair 1998, Knight-Ridder/Tribune Business News, February 9, 1998, p. 209B0975.

Hasbro Picks Arnold for Playskool, Adweek, May 27, 1996, p. 6.

Hasbro Shifts Playskool Account, Adweek, March 31, 1997, p. 6.

Hasbro Unit in Agreement To Sell Teddy Ruxpin Toys, Wall Street Journal, September 9, 1991, p. B5.

Henderson, Bruce, EPA Fines Microban $160,500 for Making Public Health Claims, Knight-Ridder/Tribune Business News, December 16, 1997, p. 1216B0916.

New Playskool Toys To Have Antibacterial Protection, Knight-Ridder/Tribune Business News, January 28, 1997, p. 128B0949.

Nonviolent Toy maker, Forbes, May 1, 1966, p. 36.

Playskool Gears Up for 95 with Broad-Based Line Extensions, Playthings, February 1995, p. 82.

Playskool Hikes Its 70 Ad Budget 50% to $1,500,000, Advertising Age, April 6, 1970, p. 30.

Vander Schaaf, Rachelle, Germ-Fighting Toys, Parents, July 1997, p. 25.

Viacoms Nickelodeon Sets Venture To Make Childrens Products, Wall Street Journal, May 11, 1995, p. B2.

A. Woodward