Following article is by The Associated Press, and was published by numerous magazines, newspapers, TV and radio stations.
Lionel steams out of bankruptcy, eyes new markets
WASHINGTON, May 2, 2008
Lionel LLC has emerged from bankruptcy protection, ending more than three years of restructuring and a bitter fight with a rival model train company.
The 108-year-old toy maker formally came out of bankruptcy Thursday, leaving the company poised to move out of the hobby shop and into the broader pop-culture marketplace.
Chief Executive Gerald Calabrese, a former Marvel Comics executive who shepherded Lionel through bankruptcy, said in an interview that he sees the new Lionel as an entertainment company and not just a toy maker.
"The way people buy and sell things has changed dramatically since 1900," said Calabrese. "We're not the distribution and sales mechanism anymore, we're the intellectual property. And that's the major change in the outlook of this company."
Breaking into the broader toy market is key to Lionel's growth said Calabrese. During the company's stint under bankruptcy protection, sales for Lionel starter sets -- kid-friendly systems that range in price from $129 to $300 -- more than doubled. The company sold some 200,000 sets last year with much of that growth coming from sales at department stores and big-box retailers.
"We had virtually no sales at outlets like Target and Macy's and FAO Schwarz when the bankruptcy started," said Calabrese.
Developing new products that appeal to kids and getting them on the shelves at big retail outlets is only part of what Calabrese, who worked on Marvel's television programming in the 1990s, calls the pop-cultural segment of the toy market. He says that in today's marketplace, movies and television are the key drivers to sales.
Lionel found itself in bankruptcy in November 2004, just months after Calabrese was named CEO, when federal jury awarded rival train maker MTH Electric Trains $38.6 million in a trade-secrets dispute with Lionel. Faced with a judgment it couldn't pay Lionel filed for Chapter 11 bankruptcy.
An appeals court later overturned the verdict and ordered a new trial. Lionel and MTH settled their long-running fight late last year paving the way for Lionel's exit from Chapter 11.
P.S.
We are an authorized Lionel dealer; and we have Lionel products available year-round, not just at Christmas time.