The toy scene is rapidly changing and caught in the squeeze is Ralphco Inc. Known for its giant crayon piggy bank, the Worcester, Mass., company is going out of business and auctioning off its equipment Aug. 12.
``The toy industry has shrunk over the last 10 years. Where there were dozens and dozens of major accounts, there are just a handful of accounts,'' President Ralph Dworman said in an Aug. 5 telephone interview.
Ralphco filed for Chapter 11 protection from creditors back on Oct. 21, in U.S. Bankruptcy Court in Worcester. It ceased manufacturing on April 15, but has continued distributing products
A string of retailer bankruptcies - Ames Department Stores Inc., Bradlees Inc., Caldors Corp and KB Toys Inc. - has hurt the toy manufacturers. He added that a few customers decided to pay less than the contracted price for custom work after taking delivery of product, which squeezed an already thin profit margin.
``Downward pricing in contract molding is a major part of why we filed for Chapter 11,'' he said.
Included in the auction are 650 blow molds, 24 blow molding machines, five injection presses, as well as auxiliary and toolroom equipment. The 100,000-square-foot facility is available for lease. Joseph Finn Co. Inc. of Newton, Mass., is handling the auction.
The product lines should live on, Dworman said. Such items as the crayon bank, bowling sets, even a 33-gallon latched container for trash or storage are part of the sale.
``The company has run its course. After 15 years in business, $100 million in sales and $20 million in salaries [of employees], we certainly helped contribute to the local economy and we feel good about that. We're sorry to see it come to an end. We're sorry that we are not able to re-create ourselves. We allowed ourselves to be blindsided,'' he said.
The company was started by his wife, Nancy Dworman, a laid-off art teacher who thought of the crayon product at the kitchen table and later made it in the family garage.
A subsidiary, Middlesex Paper Tube and Core Inc., also of Worcester, makes cardboard tubes. It is not part of the auction, although it is still in Chapter 11.
Ralphco is the second toy blow molder in the Worcester area to fold in the past few months. On June 30, Wagner Plastics Inc. of Clinton, Mass., sold off its assets.
``Too many factories are chasing too little business,'' he said.
He said that like the shoe and textile industries, jobs are going overseas, but he is still optimistic about U.S. blow molding.
``The key to survival in blow molding is to automate. Sadly, we did not automate quick enough,'' he said.