Posted by: Jerry Garrett | December 18, 2012

What Grinch Killed The World’s Largest Manufacturer of Toys?

DSC01086

A cold winter’s day, a Christmas tree & an electric train set! Wow! Big fun!

LAS VEGAS

A cold winter’s day, a Christmas tree, and a box of toys. What could be more fun, huh, kids?

Especially if the box is full of electric train stuff.

Maybe you have to be a kid of a certain age to be able to experience the rush of opening a box that says, “Marx Electric Train” on it. The box says, “Louis Marx & Co., Inc., 200 Fifth Avenue, New York, N.Y., U.S.A.” And, at the time this particular train set was made – more than a half century ago now, Marx was the “World’s Largest Manufacturer of Toys”.

Where is it today? Gone. In fact, it’s deader than the mimeograph industry – and has been for more than 30 years. How did it go from the world’s largest toy company, to nothing, so quickly? Only in America, where, to paraphrase a recent Saturday Night Live skit, the only thing we make anymore is Type II Diabetes.

The company was founded in 1919 by 25-year-old Louis Marx and his brother David. Louis, a soldier home from The Great War, had an eye for what kids liked, what would sell, and how to make it cheaply without making it cheap. Marx and his brother were millionaires within three years. (A more positive example of “Only in America. With that philosophy, and no stockholders to answer to, how could they fail?) Their mottos were “give the customer more toy for less money,” and “quality is not negotiable.”

They expanded their toy line from two to hundreds, within just a few years. They made some of the earliest diecast toy cars, toy soldiers, tinplate buildings, dollhouses, dolls, robots, and trains. Especially trains. “One of the many Marx toys,” it said in precise English on each box. “Have you all of them?”

MarxHudson

Calling “Doc Hudson”!

DSC01097Marx specialized in HO and O scale trains. By cleverly re-using and updating existing tooling, Marx was able to sell basically the same train for over 40 years. Louis Marx perfected an assembly line method of construction that earned him the nickname, “the Henry Ford of the Toy Industry.”

During the Great Depression, Marx sales actually grew.

At its peak, Marx had three huge factories in the U.S. (Glen Dale, W.Va.; and Erie and Girard, Pa.) and numerous factories overseas.MarxHudson

Its rather legendary 1948 Hudson Hornet, made with help from Hudson’s own engineers, looks a lot like the inspiration for “Doc Hudson” in the movie “Cars”. Marx’ most famous automotive-based toy, however, was the ubiquitous “Big Wheel”. Other Marx specialties? The yo-yo, boxed “Play Sets” and Rock ‘Em Sock ‘Em Robots.

But Marx was slow to fend off competition. Despite a big head start in the diecast toy car field, Mattel soon caught up and passed Marx. Though Marx offered a line of “Elegant Models” (like most Marx creations, now much prized by collectors), Matchbox and Mattel’s Hot Wheels ate its lunch.

Marx also did not devote a lot toward advertising. In 1955, for instance, when Mattel spent $500,000 on advertising, Marx spent $312. Mattel also sponsored the new “Mickey Mouse Club” program on television.

A Toy Hall of Fame inductee

In 1969, Marx invented the Big Wheel – now a National Toy Hall of Fame inductee

By 1972, with Marx then 76, he unloaded his company for $54 million to Quaker Oats. Quaker, which owned Fisher-Price at the time, thought they’d know how to make something out of it. But its plans turned to mush (pun intended).

By 1980, the whole thing had been mismanaged into oblivion, tens of thousands of American workers were out of a job, and the plants all closed.

Glen Dale is still the site of a Marx toy museum.

Time magazine, 1955

Bits and pieces linger on. Original Marx tooling and molds are still used to produce replacement parts for the old train sets. Trademarks and logos have been auctioned off. And a Cedar Rapids, Iowa, company now makes the Big Wheel.

Louis Marx, who fathered nine children with two wives, died at 85 in 1982. His huge, historically significant Scarsdale, N.Y., mansion, built in 1904, was demolished by a housing tract developer earlier this year.

The toy company that Louis Marx built is gone, but the toys he gave us will live on – as long as there are kids to play with them.

Jerry Garrett

December 18, 2012

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Responses

  1. Jerry – is there a good place to reach you re: a story pitch – I’m working with the Rose Parade and would love to discuss the antique automobiles being used in this year’s event – thanks – David Shein – david.shein@finnpartner.com

    • Hi David. I’ll send you an email. Thanks.

      • Excellent – looking forward to hearing from you Jerry

        my email address is david.shein@finnpartners.com

        Thanks.

  2. The popularity of the Marx Company declined in the 1950s. Some speculate the company’s downfall was brought on by not fully taking advantage of television as an advertising medium. While much smaller rival Mattel Toys spent $500,000 on television advertising in 1955, including sponsoring The Mickey Mouse Club, Marx spent only $312. Marx also failed to catch on to the electronic toy trend in the early 1970s.


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