Industry icon Murdough shares the story behind Simplay3

Naples, Fla. — Children's products icon Tom Murdough and his rotational molding companies, Little Tikes, Step2 and now Simplay3, have faced some “tough dudes” through the years, Murdough said at the Plastics News Executive Forum.

Cleveland mobster Danny Greene. A 1970 trucking strike that threated to derail a major order. And a major, ongoing toughie: The harsh retail environment driven by big-box retailers, and now, online shopping, that pounds down prices.

Through it all, Murdough said, the excitement of making toys and working with designers and employees is what keeps him enthusiastic.

“It gets in your blood,” he said of the fast-paced toy industry, where new products account for 25 percent of sales for companies each year.

Murdough sold Step2 to a private equity buyer and retired in 2007.

“I flunked,” he said about retirement to knowing laughs from the audience. “And I'm back. I'm not made to go out and play golf every day, or every other day. Or even three times a week.” So 
he and his wife, Joy, decided to start 
Simplay3.

“For me, it's important to feel good about what we're doing. To be developing a team again. Developing a product line and a brand name,” he said. “We've had some real down times when things don't go as well as you think they should, or our machines aren't functioning well, or there are some other problems we are facing. And then two days later, everything's sailing again and you go back. I don't love the downs, but I Iove conquering those issues and continuing on.”

The new company is in a 70,000-square-foot factory in Streetsboro, Ohio. Simplay3 employs 26 people — many from Murdough's past companies — and runs three Rotoline machines. Production began last fall.

Murdough said employees on the shop floor get excited when they see the new products. That feeling is back.

“We had great relations with them, very casual. I would spend a lotta time in the plant, knew most of the people's names. And it'd be great to go out and josh with them. And I miss all that,” he said. “I really love our employees. I can't say it any other way. I love being with them, seeing what they're doing. And I love to see smiles on their faces.”

Murdough started out selling golf balls for Wilson Sporting Goods in 1965. Thus began his education on consumer products — and the impact of mass retail. One day he walked into a good customer in North Carolina in 1968, who said, “Tom, I see where Kmart is selling K-28 golf balls for less money than I can buy them from you.” It was an “aha!” moment.

“When you think about it, that's when things really started to deteriorate on the standpoint of the retail industry. And boy, we can see the length that has gone to today,” he said.”

Murdough recounted his entire career in rotational molding in a keynote speech March 29 at the Executive Forum.

Wilson had purchased Wonder Products Co., which made spring-mounted rocking horses. Wonder had one rotomolding machine and two large injection molding presses. Murdough transferred there, to its Tennessee plant. Jimmy Ling, the pioneer of the American conglomerate, bought Wilson, and Lind decreed that all Wilson plants would run year-round.

“At Wonder, they would shut down in November and not start up again until April. The whole toy industry sort of followed patterns like that because they didn't perceive that there was business to be had, other than the Christmas trade.”

Wonder Products' president asked Murdough to help sell time on the machines. He got custom jobs for the injection presses from Holiday Inn and some institutional seating companies.

Then a friend called, a supplier of hospital products, and said his molder of bed pans went bankrupt. Could Wonder Products rotomold 100,000 bed pans?

Kelch Corp. made 24 molds. “I learned more about rotational molding in about a six-month period than I've learned since. It was a very valuable experience,” he said.

“That experience gave me a good understanding of the differences between injection molding and rotational molding,” Murdough said. “What I loved about rotational molding was the speed of entry, the lower cost of building molds, buying machines, and all of that was very appealing to somebody who didn't have any money, to speak of.”

At the Toy Fair in New York, Murdough met Jack Hill, who had just started a rotomolding company in a barn in Aurora, Ohio, called Rotadyne Inc. Murdough joined to build a line of children's products. He also moved the bed pan molding to the Ohio plant.

In 1970, Hill sold his share of the company to Murdough, who built it into the powerhouse Little Tikes. The company moved into a leased plant in Solon, Ohio. Then an infamous visitor stopped by.

“We hadn't been there a week, when one of my assistants said, ‘Mr. Murdough, there's somebody in the parking lot that would like to speak to you.' I said, ‘Why don't they come in?' ‘I think they want to see you in the parking lot.' So I went out to see who it was, and there's this big guy and two henchmen with him. And they're there to tell me that would like to talk to me about organizing. ... I said ‘Are you kidding me? I've got 15 employees in here and you want to get us organized?'

“I was not happy about it all. I expressed myself pretty thoroughly. It didn't make any difference to me who they were. But it turned out to be Danny Greene.”

Greene, an Irish American mobster, was a player in Cleveland's organized crime wars in the 1970s, marked by dozens of car bombings. Greene himself was killed in a car bomb in 1977.

Murdough immediately called a meeting with employees. “I said, ‘This is gonna be the first plant meeting, and we're gonna have one every month. And we're gonna talk about what our objectives are, where we're trying to go, and how we're going to try and do it,'” he said.

“Those plant meetings — and I just had one at Simplay3 — have been so very important to us, in communicating with our people, getting them on the same wavelength,” Murdough said.

Also in 1970, Little Tikes got a nice order from Children's Bargain Town in Chicago. Then a truck strike hit. Murdough telephoned to ask for an extension. They were “tough dudes,” he said.

“He said, ‘If you can't ship that order, you can rip it up!' I said, ‘Yes sir, I'll get it there.' So I rented a truck, drove to Chicago and delivered the products to seven stores,” he said. “That was a big day. I didn't realize how big a day until about a week later and he called up and said, ‘Murdough, that shit's selling!'”

In 1972, the rotomolder moved to Macedonia, Ohio, and the following year, opened a plant in California.

Murdough beefed up the executive staff between 1978 and 1982, adding people to handle finance, purchasing and manufacturing.

Murdough told stories about two iconic Little Tikes toys that both came out in 1979: Cozy Coupe and the Turtle Sandbox.

The toy industry was still following an only-for-Christmas mantra. Then in 1979, a buyer from Sears called and asked, “Tom, have you fellas ever made a covered sandbox?” The Tikes designers got to work and produced the Turtle Sandbox.

“He called me and said, ‘You can't believe this, Tom, How many of these can you make?' And if you're like me, that's music to your ears. We had one machine that did nothing but run Turtle Sandboxes,” Murdough said. “And the most important thing it told me, the industry's wrong. There is a helluva market in the spring and summer, and we quickly started developing a line of products that helped us grow the company, to the point where 50 percent of our business was being done in the spring and summer.”

The Cozy Coupe, designed by Cincinnati designer Jim Mariol, became a huge seller.

“We talked about making a car that had a roof on it. I loved the fact that kids loved to get into boxes, they love to get in something that has roof on it,” Murdough said.

Murdough sold Hudson, Ohio-based Little Tikes to Rubbermaid Inc. in 1984, when sales were $50 million. Five years later, at $300 million in sales, he left the company, after disagreements with Rubbermaid management about how the toy business was run.

After his noncompete ran out, Murdough started Step2 in Twinsburg, Ohio — which later moved to a new plant in Streetsboro — the town right next to Hudson, home of Little Tikes. The rotomolder first made home and garden products, then added toys to compete directly against Little Tikes.

Murdough said Step2 sales exploded from $540,000 in its first year to $17 million in the second.

Murdough sold Step2 to private equity firm Liberty Partners LP but found that he missed building a manufacturer of U.S. toys — a rare business since 98.5 percent of toys come from China.

Inexpensive toys from China, along with the dominance of big-box retailers that drive down prices, hurt the toy industry, according to Murdough. And now retail is changing.

“Today the marketing issues for companies selling into the retail market are very difficult. Retail is a shrinking market, and not the least of which is the Amazons of the world, and the internet sites that so many other companies are moving to. Retailers are setting up internet sites. So everybody is fighting for shelf space,” he said.

Murdough has an old-school way of marketing. He will not sell to Wal-Mart. He said Simplay3 does sell on Amazon Marketplace, where the company can set the price and ships directly to customers.

But he wants to get Simplay3 products in the hands of consumers — ideally at regional retailers like Wegmans and Meijer.

“One thing that has been preeminent is, we want our customers to make money,” he said.

Starting Simplay3 was not easy, as it took a long time to find a building. Every one of its children's products underwent extensive agency testing.

“So we came into the Christmas season last year and had one product only to sell. So that was pretty upsetting,” he said. And it took six months for the federal government to approve a new line of mailboxes.

At the Toy Fair in February, Murdough said Simplay3 was about six months behind the market. “That's put us being the eight ball,” he said.

But then he ran a slideshow of Simplay3 products, his enthusiasm building. The company is hitting its stride: A push stroller shaped like a football helmet — and customizable with the logo of your favorite team. A foot-powered car shaped like an elephant. The Super Coupe Pedal Trike, which blends a big wheel and a Cozy Coupe. A flatbed cart for hauling heavy loads. A line of mailboxes, including some that look they're mounted on a log pounded into the ground, but it's plastic. The company has about a dozen products so far.

“Design is important to everything we do. Extremely important,” he said.

After selling Little Tikes and Step2, Murdough said that won't happen this time.

“We're not going to sell this company. There's something that happens when you sell to a private equity firm or somebody else. Their objectives typically collide with your long-term approach for the business. I may not be around, but hopefully Simplay3 is going to a good company even after I'm gone,” he said.