San Francisco Chronicle
Sunday May 6, 2001
factory Wham-o finds itself back in style
Chronicle Staff Writer
One of the reasons
the Hula Hoop is in the pantheon of all-time famous toys is that
it pretty much put neighborhood bozos in their sorry place if they
couldn't get the knack of it. Those of us who were particularly
gifted with the Hula Hoop became neighborhood legends.
Its maker -
here's a name for the ages - was and is Wham-O, a company originally
from San Gabriel (Los Angeles County) that, four months after introducing
the hoop in 1958, had sold 25 million of them. That same year, Wham-O
introduced the Frisbee, first called the Pluto Platter. That's a
double dose of branding history.
along, mostly, listlessly, for years. It later had two corporate
homes. It was purchased in 1982 by Kransco of San Francisco and
in 1994 by Mattel of El Segundo (Los Angeles County), where it disappeared
inside a $4.6 billion business where Barbie was queen.
But now Wham-O
is back in San Francisco - and ready to play.
A group of investors,
including New York's Charter House and Seven Hills Partners of San
Francisco, bought the Wham-O trademarks and assets from Mattel at
an auction in October 1997. Difficult as it is to believe, the company
that has entertained three generations was re-launched as a startup
"We had to get
the system up and running in 60 days," said Mojde Esfandiari, president
of the now-privately held company, where filing and toy storage
are still works in progress at its offices on Second Street.
But here's an
encouraging detail: Sales are up about 60 percent at Wham-O, in
the $50 million range, up from the $20 million range in 1998, said
Cabot Brown, managing director of Seven Hills Partners.
And Wham-O intends
to continue the growth.
"Our plan is
to put a Frisbee in every garage," said Brown, sketching a simplified
business plan for an enormously complex and fickle $23 billion U.S.
toy industry. "We also want to restore well-known brands to their
glory and have a variety of products that define certain categories."
Wham-O, of course,
begins with the kind of name that lifts products and politicos alike.
The list of trademarks also includes Hacky Sack and Boogie Board.
The Wham-O Slingshot
was the flagship product that Arthur "Spud" Melin and Richard Knerr
turned out in 1948 in San Gabriel, and now there are some 50 products
under the Wham-O banner.
what they see. Wham-O dominates the outdoor water category with
its trademarked Slip N' Slide and other water-related products,
noted Jim Silver, publisher of Toy Book magazine in New York. Wham-O
figured out early on that kids like to get wet, he said.
Silver, Wham-O has had success in the food category with its Baskin-Robbins
Ice Cream Maker.
they expand those lines, the brighter their future will be," said
The mantra at
Wham-O is that kids need to go outside and have some fun, said Esfandiari
and Scott Masline, senior vice president for marketing, which has
largely made Wham-O a spring-summer business. This winter, however,
Wham-O will be introducing a winter game line - including saucers
and even small skis that can be attached to scooters to shoot down
snow-packed hills - which will extend the famous brands.
In this venture
into what's known as "contraseasonal marketing," Wham-O is finding
new life for old icons.
One saucer is
really a large inverted Fribee and another has a Hula Hoop-like
ring, so consumers are not far from images and brand equity they
recognize - and parents can see to it that, by golly, their kids
will have fun with the very toys of their own youth.
At this point,
however, winter is only an opportunity for Wham-O, which must prove
itself, said Silver.
going to set the world on fire with sales, but the kids will have
fun this summer and winter with Wham-O toys and Wham-O will make
some money," said Christopher Byrne, a toy industry consultant in
New York. "Nothing wrong with that."
of Wham-O, many agree, is for the company to avoid relying too much
on its storied past. "History is great," said Masline, "but history
does not make a company. Perhaps previous generations that have
owned this company relied too much on the history."
age 42, has worked only in the toy and sporting goods industry and
thus can say with authority, "I've never had a real job." Esfandiari,
whom the investors brought in in 1997 to be the chief financial
officer and who became president in November, is also an industry
veteran who, at 44 finds it's helpful to become a child again to
learn what works - what's fun. Having two kids of her own helps,
too. "This is the third time in my life I'm doing the fourth grade,"
If guiding a
company heavy with brand equity is something of a burden, it's a
welcome one, much preferable to having no well-known brands, said
and Wham-O's 50 other administrative and creative people in the
corporate office on Second Street spend much of their day wondering
what will give kids joy. Some toys have lengthy pedigrees: Hoops
very much like Hula Hoops were used in Australia for exercise prior
to 1958, and you can find its inspiration in the Middle Ages when
boys pushed hoops down roads with sticks.
don't want to over-analyze these things," Masline said. "You just
have to ask, 'Does it deliver joy; will it make them giggle?'"
"Kids also like
repeat fun, over and over again," said Esfandiari.
search for what's fun is no simple task. Even the Frisbee is forever
being changed to keep its marketplace appeal. This year alone, there
are some 30 models by weight and color, said Masline. There's the
Moonlighter that glows in the dark and the Heatwave that changes
color in sunlight. The company is hoping that sales fly, too.
is another item that has undergone constant tweaking. "The Slip
N'Slide is a basic plastic slide. It wasn't broken, but we were
able to fix it and bring more play to it," said Masline, showing
off four similar slides with as many different features and price
Since Slip N'Slide's
success established that kids get sopping wet, Wham-O has since
rolled out Water Blast Hockey, in which two people attempt to put
a puck in an opposing goal using two water "blasters" that can be
hooked up to a single garden hose. Most toys are developed within
Wham-O and other toy companies, but this comes form the "inventor
community" in particular, Good Marketing of Cleveland.
Good said he began with the premise that kids like to play outside
and play with water guns, and then he asked himself the question,
"What will kids do with water guns other than squirt each other?
The answer was to make (the game) competitive, engaging and fun."
Wham-O developments include the new $15 E-Shoop Hula Hoop, which
is interactive and can be used competitively as it counts the number
of "shoops" (the sounds the hoop makes) and time in play. Wham-O
also offers some Morey Body-boards that are priced at more than
"Wham-O is small
enough to be extremely responsive to changing market conditions,"
Good said. "They have the ability to turn on a dime and get products
quickly to market."
likes playing in the midsize toy company range, with its products
available in major outlets like Toys R Us or tiny beach huts. The
toys can be found in the Unites States, Europe, Japan, South Africa,
Australia and New Zealand at a variety of prices.
brief relationship with Mattel, its products were not wholly out
of distribution (although Slip N'Slide was nowhere to be found for
two years). They were, however, a poor fit in a mass-manufacturing
company which in time changed its thinking about Wham-O, said Sara
Rosales, a Mattel spokeswoman. "One of the things you focus on is
profitability," she said, "and when we carefully looked at the financial
data, selling (Wham-O) made more sense."
Since the doldrums
of the Mattel days, 60 percent growth in sales looks pretty good,
said Brown, the investor.
go public? "One never knows, "he said.