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Toy Industry Newsletter
In this issue:
- Needed – CEO for NYC toy company
- Needed – VP of Sales in California
- ASK DAVE – Employment Advice
- Interview with Anton Rabie, President of SpinMaster Toys
- Ask the Trademark & Patent Expert – Dave Hrina, ESQ
- How to know when your job is on the line by Davis Fitzgibbons, CPC
- Licensing Case Study with Licensing Expert, Jerry Kapner
- Looking for plush concepts
- Jibbitz, some serendipity and $10,000,000.00
Well-established New York City toy manufacturer is looking for an individual to replace the retiring Chief Executive Officer. The company is small but looking to grow and requires someone who can bring his/her vision for growth and a tremendous amount of personal energy to bear to accomplish it. Historically profitable, the company had an off-year and is looking to regain its greatness. The company is well-positioned in both the specialty and mass markets (but is not beholden to Wal-mart). The company makes quality products and is expert in licensing, selling product both overseas and domestically. All products are manufactured in China.
The client requires an individual with experience leading a company, or a division, and a powerful personality to be the face of the company. Experience raising capital and/or working with investors/venture capitalists is significant. This individual must work in the NYC offices, there will be no exceptions, so please do not ask. The company does not want an interim-CEO (they still have a CEO remember) nor do they want a consultant, so please do not ask. You can live anywhere you desire (NY, NJ, CT, etc) as long as you can make it into the Manhattan office with ease. You can not take this job and work in California – so please do not ask. The company will provide relocation assistance. Salary plus benefits, bonus and equity are available in this position.
Do not contact David about this opportunity as this position has already been filled. It has been left in this newsletter to show the types of opportunities we work.
Stable, profitable, industry-leading client is looking for a Vice President of Sales. Candidate is someone who has headed up Sales at a $50-75MM company and taken them to upwards of $250MM. This individual must live (relocate) and work in California – no consultants or off-site employees. Additionally, the client wants someone who has experience at Hasbro, Mattel, MGA, Jakks or SpinMaster Toys. If you don’t meet all of those requirements there is no need to apply.
Salary (TBD) plus benefits and bonus are available in this position.
Do not contact David about this opportunity as this position has already been filled. It has been left in this newsletter to show the types of opportunities we work.
Dear Dave: I received a job offer for a great job with a great company but the offer was low. I countered their offer but they rejected it and stood firm. I asked for a sign-on bonus but they declined again and stood firm on their offer. They offer a great benefits package but I don’t need benefits, can I ask them for the cash equivalent instead?
Dave Says: You can certainly ask, however don’t expect them to capitulate. If the company gives benefits to everyone, they won’t be too interested in notgiving them to you (and bumping up your pay) however it has been done. Most companies don’t want to do this (open Pandora’s Box) because then other employees who technically don’t need the insurance will go in and ask for the cash equivalent. Benefits can be valued up to 30%+ of your base pay (depending on your salary) and not many companies are interested in adding 30% in cash to your base salary.
However, some large corporations will give you cash back (on a monthly basis) if you waive your right to medical benefits. When both spouses are working, it is not necessary for both of them to have benefits, so it is actually cheaper for a company to give money back to the employee than to keep him or her on the books for benefit purposes. So, again, you can ask…but don’t expect too much in return.
1. Spin Master has achieved great success in a relatively short amount of time – to what do you attribute that success?
Anton Says: In terms of company structure, our success can be attributed to speed to market. We have the ability to make quick decisions when it comes to product development; there’s very little bureaucracy.
I also think that our corporate culture contributes to our successes. An entrepreneurial spirit has been essential in overcoming challenges and pursuing certain ventures. There’s an incredible sense of drive and determination that has fueled risk taking.
2. How important is the inventor community to Spin Master?
Anton Says: Extremely, at Spin Master Ltd. we believe that great ideas can come from anywhere. The inventor community is paramount in the toy industry and we value our reputation of delivering on commitments.
3. What is the best strategy for dealing with the changing retail climate?
Diversification is essential, with retail changing so quickly companies have to be responsive. Spin Master Ltd. continues to develop established brands along with expanding into new categories such as furniture. Our Marshmallow line is a perfect example of using our knowledge in children’s products while increasing shelf space both in the toy aisle and in other departments.
4. How much of an impact will technology have in the toy aisle?
Anton Says: It already has, from preschool to pre-teen, technology has to be included!
5. What can we look forward to from Spin Master in the future?
Anton Says: Spin Master Ltd. is focused on developing great products, growing evergreen brands, and will continue to evolve as a children’s entertainment company. David – thank you for the time and opportunity in this matter. Good luck with everything!
Dear Dave: I am an inventor and I am under the impression that I have a two year "grace period", called the two-year retention period that essentially protects me while I show the concept to companies. Is this accurate?
David Hrina: Unfortunately, there is no such thing as a two year "grace period" or "retention period", and an inventor should not disclose his or her idea to a third party without a Confidentiality Agreement in place. A well drafted Confidentiality Agreement will preclude the recipient from not only further disclosing the confidential information (i.e., the invention) to a third party, but it will also preclude the recipient party from using the confidential information for its own benefit. Additionally, an inventor’s use of the invention in public and/or disclosure of the invention to a third party may trigger a one year window in which a patent application must be filed or the right to apply for a patent for the particular invention may be irretrievably lost.
David Hrina is a licensed Patent Attorney and a member of the Corporate and Intellectual Property Practice Groups at Buckingham, Doolittle and Burroughs, LLP. David may be contacted via email (No Free Advice) at DHrina@BDBLAW.com or via phone at 800.686.2825.
Sometimes obvious, other times not, it can be difficult if not impossible to know when your time is up and your career is suddenly over with your company. There are however warning signs and here are a few of them.
Merger or Acquisition. A merger means “cross over skills sets” and you might be the one left without a chair when the music stops. If your company is acquired by a foreign entity, you are really in trouble as most foreign companies think they are a heck of a lot smarter than the locals they acquire. If I worked at Budweiser, I’d be very nervous right now.
Loss or change of leadership. If the person who hired you was fired, you better start getting your resume ready. Even if s/he retired or left on their own you could be in the cross-hairs. Read the tea leaves and don’t take a vacation (planned or last-minute) when the new boss arrives. If you are gone, the new boss might realize they never really needed your position anyway.
Career Coaching. This is a tricky one you might not be aware of. Although it looks like management is backing you and has a vested interest in your success, you better get your interview suitdry-cleaned because this is the prelude to the final act. By the time a career coach is brought on board, management is usually tired of you and this could be the window-dressing for your impending dismissal. Beware of Greeks bearing gifts here.
Change-Change-Change. In life, change is good. In your career, change is bad. Here are some signs the axe might soon be a fallin’. Your salary was modified negatively, or your bonus was changed or eliminated. You lost some direct reports or now have to report to a new or different person or division. Key accounts (or responsibilities) that used to be yours were given to someone else. If the person was junior to you it is an even worse sign – as they are likely getting a battlefield promotion to your job. You can take solace in the fact they will only be getting a paltry pay raise to go along with the added responsibility and new title. More subtle signs, albeit barely, include removal of corporate cards or expense accounts, especially unilaterally. No longer being invited to meetings, lunches or after work events – no one wants to hang around a leper you know. The cancellation of business trips, even those already booked. Lastly, if you break or lose something like a laptop, or worse yet a stapler, and they won’t replace it – this is an ominous sign the end might be near.
In 1993 BEFORE George Foreman won back his heavyweight title he was down and out; almost completely broke. He decided to return to the ring to make a few dollars when he was approached by appliance maker Salton who asked him to serve as their spokesperson for their new grill. George was delighted and asked how much this role would be paying him. “Nothing” was the answer. “We don’t have any money at all to pay you George…but we could give you a piece of the action”. That sounded a bit strange to George but he figured he needed the press for his run back to the ring and if the grill took off it could be lucrative for him. Salton offered him 45 PERCENT to be their new spokesman. George accepted. 5 years later Salton was tired of paying the draconian royalty and bought George out for $127,500,000.00 plus $10MM in stock for the right to use his image in perpetuity.
We asked licensing expert Jerry Kapner President of the Kapner Group to evaluate Salton’s decisions.
Jerry says: As tempting as it might be to fall into the trap of observing that this product might not have needed a license at all, that would be completely irresponsible and politically incorrect. I will say, however, that hindsight is always 20/20 and if I was representing Salton in 1993, my answer might be very different and more circumspect.
If I recall correctly, Salton was going through very tough times during that period. They were hemorrhaging money, had no real brand identity, and this product might very well have been their final act. How radical was the concept of portable indoor grilling at the time? Truly a roll of the dice. Certainly the idea of offering no guaranteed payment for rights, in exchange for an increased royalty share was absolutely prudent. What I don’t know is how many of the more obvious brands turned down Salton’s license request before George Foreman accepted this exceedingly generous split.
Had they approached any of the then budding celebrity chefs (Emeril Lagasse, Bobby Flay etc.), or more established entities such as Julia Child, Paul Prudhomme among others? Did they look to home-style mavens like Martha Stewart or B. Smith, or targeted publishing lifestyle brands such as Women’s Day or Good Housekeeping? How about licenses to trademark extend a traditional grill brand such as Weber? Again, to have been a fly on the wall.
It would be easy to criticize the disconnect between the product itself and the oversized Foreman as not making any sense. However, George had already done a number of endorsement deals, as was probably going to get a great deal of media coverage during his boxing comeback. He had his own reservoir of celebrity goodwill; not bad exposure for Salton. Also, again, who could have predicted that within a very short period of time, this grill would become a staple of the American apartment home? (Well maybe QVC who introduced the product, with who else, George Foreman as sales and spokesperson).
What does occur to me is (or was) the opportunity, post success, to license out thebrand to other merchandise categories; not only in food preparation but perhaps other home furnishings classifications. Maybe Hasbro could have beefed up (no pun intended), their legacy Easy Bake line, or perhaps some synergy with a Burger King? How about specialty food categories, designed to be prepared on what we now all refer to as the ubiquitous “George Foreman”?
In a perfect world we always attempt to marry product and property. I have said before that a good property will generally not help a bad product. Well, the converse is true as well. A great and innovative product, if it gets a shot at retail, will succeed. George Foreman would probably tell you the same is true in the boxing game.
The Kapner Group is a licensing, retail merchandising, and brand development consulting firm. Please contact David if you would like to speak with or meet Jerry.
We are looking for unique/fun or wacky plush for one of our clients. If you have a unique plush concept (that may/may not include a sound chip or other feature) we would like to learn about it. The ideal concept should be a point-of-sale item and will retail for $1.99 – $9.99.
Do not contact David about this opportunity as we already have concepts for this client- it has been left in this newsletter to show the types of opportunities we offer.
Sheri Schmelzer was just trying to keep her three kids entertained on a hot summer day three years ago. Since all three kids wore Crocs (the lightweight plastic shoe) Sheri decided to adorn the shoes with silk flowers from a sewing kit. Days later they filed for a patent (quick thinking) and Jibbitz (variation of Sheri’s maiden name) were born!
A month or so later Sheri’s daughter was wearing her Jibbitz-adorned Crocs at the local municipal pool when a man walked up to her and asked what was in her shoes? “Jibbitz!” the little girl proclaimed, “…my mom makes them.” The man gave the little girl his business card and asked that she give it to her mommy. The man at the pool that day was non other than Croc’s founder, Duke Hansen.
Months later Jibbitz sold to Croc’s for $10,000,000 (up front) and an additional $10,000,000 after sales goals are met.
The moral of the story is stop wasting money on trade press, PR and TV advertising and just put your product in your son or daughters hands (or feet) and send them off to the pool. Total cost for a municipal pool is zero…while the return can be worth tens of millions!
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David E. Fitzgibbons, CPC of the Executive Search Group may be contacted directly at 330.867.7725
