In the age of blockbuster films and cross-platform megafranchises, toy licensing is big business.
Sales of licensed toys jumped 7 percent, twice as fast as the rest of the toy market, in the 12 months ending in April, according to the Port Washington, N.Y., research firm NPD Group. In 2014, Disney's “Frozen” generated $500 million in toy sales alone. In the U.S., licensed toys represented 31 percent of the $18.1 billion industry and continue to grow, according to NPD.
Can Walled Lake, Mich.-based American Plastic Toys Inc. — which has relied on its U.S.-manufactured, low-priced toys such as sand buckets and kitchen sets — thrive among the top-selling licensed toys like Teenage Mutant Ninja Turtles, Minecraft and Jurassic World?
That's the bet.
President and CEO John Gessert said the company is negotiating licensing agreements for a line of low-priced toys to improve sales.
American Plastic Toys' sales decreased in 2014 to $41.6 million from $50 million in 2013.
“We recognize that [licensing is] a good point of differentiation for our customers,” Gessert said. “The products we're considering will provide an opportunity for one of our retailers to provide a good entry-level price point that's maybe more appealing to their core customer.”
American Plastic Toys, which injection molds and sells toys to big-box stores such as Target Corp. and Wal-Mart Stores Inc. as well as online through Amazon.com Inc., currently does not have any licensing agreements but has done one deal in the past.
The toymaker produced some of its plastic toys with the licensed image of Clifford the Big Red Dog, made popular by Norman Bridwell's children's book series published by Scholastic Books.
“The Clifford books were inexpensive, so it was a strategy to provide lower-income customers with affordable toys,” Gessert said. “Those customers were, by and large, buying those books. We can certainly benefit from new licensing agreement relationships with licensors looking to provide a less expensive product for those customers.”