Toys remain an important part of rotomolding, and its two biggest players — Step2 Co. LLC and its northeastern Ohio neighbor Little Tikes Co. — have seen some positive recent developments.
The first bit of good news for Little Tikes had nothing to do with rotomolded toys, but instead was a favorable court ruling on the Bratz doll, the cornerstone product of Tikes' parent, MGA Entertainment Inc. On July 22, the Ninth U.S. Circuit Court of Appeals overturned an earlier ruling that had ordered MGA to hand Bratz over to Mattel Inc., the maker of Barbie dolls. A jury also had awarded Mattel $100 million in damages.
All the publicity had raised questions about the future of MGA — and Little Tikes.
With their pouty lips and saucy attitude, Bratz dolls have given Barbie serious competition.
Mattel originally sued MGA, alleging a former Mattel employee secretly shared the idea with MGA, run by Isaac Larian. Chief Judge Alex Kozinski agreed that did happen, but said the value of the billion-dollar Bratz brand came because of MGA's “hard work” to develop, market and invest in the dolls.
Kozinski ended his 20-page opinion with a classic line: “America thrives on competition; Barbie, the all-American girl, will too.”
This is one girl fight that may never end. Legal observers say it could go back for another trial. For now, it's advantage MGA.
In non-legal news, Larian was smart to invite Little Tikes founder Tom Murdough to the company's 40th anniversary party at Tikes' headquarters in Hudson Ohio, back in June. They shared the podium to cheers from employees.
Here's something even better: Tikes is staying in Hudson, after the state of Ohio offered a financial incentive package. Larian had threatened to move the company, hinting that other states were dangling offers.
Larian, a “toy guy,” got this one right. Bratz dolls are made in China, but the manufacturing of rotomolded Little Tikes toys belongs in Hudson, Ohio — USA — where Murdough started the company in a barn back in 1970.
Murdough, of course, also started Step2, the Streetsboro, Ohio, maker of rotomolded toys and lawn and garden products. He sold it in 2006 to Liberty Partners LP, a private equity firm. The following year, when he retired as the top executive, Murdough brought in a new leader, Scott Levin.
Then in February of this year, Levin was out. Liberty Partners brought in Jack Vresics as president and CEO.
We profile Vresics on Page 1 of this issue. He brings important skills: knowledge of using technology and process control to improve operations; and an enthusiasm for manufacturing. He also realizes that making toys is fun.
Of course, Vresics is just one person. Step2 has an energetic management team already in place, along with a strong corporate culture. And Vresics said he talks regularly to Murdough.
For a retired guy, Tom Murdough certainly is in demand.