The following is an article from a New Jersey newspaper, the Star-Ledger, about the Lionel company and its president, Jerry Calabrese.
Please note that we are a Lionel dealer, and we have Lionel products year round, not just at Christmas. We have track and switches, locomotives and cars, accessories and complete sets, and the all important Lionel catalog. Come in and check us out.
We also have products from other O scale manufactures such as MTH and Atlas.
Engineering a comeback Jersey native is turning around venerable train maker Lionel Tuesday, February 27, 2007 BY TOM JOHNSON Star-Ledger Staff Jerry Calabrese inherited a train wreck of a company in October 2004 when he took control at Lionel, the more-than-century-old model train maker.
After losing a $41 million judgment in a trade-secrets dispute, the nation's biggest toy train manufacturer was propelled into bankruptcy-court protection.
Beyond the legal dispute, Calabrese, a New Jersey native and a former top marketing executive at Marvel Comics Group, faced an even more daunting problem. Lionel's business was primarily driven by a small, aging and shrinking customer base.
Even though train hobbyists are passionate enough about collecting to spend up to $1,400 a year, Lionel had done too little to attract younger people to one of the world's oldest hobbies in an era of sophisticated video games.
"A lot of people had no clue that Lionel was still being produced," says Louis Caponi, of Springfield, Pa. and president of the Lionel Collectors Club of America, an organization with about 10,000 members who are hard-core collectors of model trains. "It got to the point where Lionel was catering exclusively to the collector, and not the general public."
These days, Lionel appears to be back on track. Late last year, a federal appeals court threw out the verdict in the trade-secrets case. The toy-train maker also is making inroads in luring another generation of model-train enthusiasts.
Sales at the privately held company rose to $64 million last year, a 40 percent gain compared with two years ago, Calabrese says.
"We've made a lot of progress in the last couple of years," says Calabrese, who started out his career as a reporter and editor at the Daily Record in Morristown prior to moving into the business side of publishing. "We should be out of bankruptcy this year, and the business, itself, is doing better than it has done in easily the last 20 years."
Lionel is happily chugging along again by trying once again to become a pop-culture giant, not just selling to avid hobbyists, who spend as much as $2,000 for one of its more than 300 replica steam locomotives or engines.
"Hobby was everything," says the 58-year-old Montclair resident in an interview in Lionel's New York offices. He said hobbyists were 100 percent of the business when he was recruited to become chief executive by Wellspring Capital Management, an investment group that includes rock star Neil Young as a minority partner.
In the past year, Lionel began selling its trains, not just in the 1,200 specialty model train shops around the country, but at high-end retail outlets, such as F.A.O. Schwarz, Nieman Marcus, Fortunoff and Macy's. In fairly elaborate displays, the stores showcase low-end train sets, which sell for between $200 and $300.
"We haven't been in those outlets in 50 years," Calabrese says. "For the first time in a half a century, a kid could walk in and see a train running in a beautiful layout and get a sense of the magic of what this thing is."
Lionel is hoping some of those youngsters turn into avid collectors, some one like Calabrese's cousin Victor, who got his first train set back in 1958 and was hooked. "Victor probably owns 150 pieces of incredibly expensive equipment," he says.
It is a strategy that seems to be working, says Neil Besougloff, editor of Classic Toy Trains. "They're putting a lot of emphasis on selling train sets. They're finding new customers outside the realm of the traditional train hobbyist."
Calabrese's background in marketing and licensing, areas he grew to know well selling X-Men and Spider-Man at Marvel, have served him well at Lionel. The toymaker has done well winning licensing from popular children's movies, such as coming out with products linked to "The Polar Express," the Christmas movie starring Tom Hanks.
This year, Lionel will roll out a Harry Potter set, the Hogwarts Express.
The company also has benefited from technological advances in toymaking that have helped reignite interest among avid hobbyists. They now make engine replicas all the more exact and produce added train sets that are more accessible to first-time buyers because they are easier to assemble, Calabrese says.
When he was a kid, Calabrese jokes you had to be a "Mr. Fix-it to make a train set work. The breakthroughs in technology are such there is no reason to put people through what they used to have to go through 50 years ago. We are trying to be American Girl for boys. It is not just for hobbyists anymore," he says.
Lionel once had manufacturing operations in Irvington and Hillside, but its operations were moved to Chesterfield, Mich., when it was purchased by General Mills. Wellspring and Young, who holds patents on model train engines, bought the company in 1995.
Lionel is negotiating with the owners of the Prudential Center arena in Newark to possibly open a Lionel museum or exhibit as part of the Broad Street renovation going on there, Calabrese says, but nothing has been finalized.
"Lionel has enormous roots in Essex County. It employed thousands of people," says Calabrese, including his uncle who worked for the company. "It was like the Xbox of its day."
Today, Lionel outsources its manufacturing to Asia. Its worldwide work force has shrunk to about 90 employees, but the collector Caponi has little doubts it will be around in the future.
"Somehow this company has a history of weathering all the storms," he says. "This is just another storm."
