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Plush Endeavors: An Analysis of the Modern American Soft-Toy Industry

Published online by Cambridge University Press:  13 December 2011

Margaret Walsh
Margaret Walsh
Affiliation:
Margaret Walsh is a member of the Department of Economic History at the University of Birmingham.
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Abstract

This article analyzes recent developments in a burgeoning American consumer industry in the light manufacturing sector during the 1970s and 1980s. In terms of demand, soft-toy, or “plush,” production provides insights into impulse buying by a variety of income groups in a postindustrial economy, and it suggests the volatile nature of American consumer interest in low-value, disposable commodities. On the supply side, plush offers a particularly good example of an industry that has been sensitive to changes in cost, moving production around Third World countries while using information technology to improve distribution and to retain design control at home. The industry thus illustrates the response of American entrepreneurs to the internationalization of both supply and demand.

Type
Articles
Information
Business History Review , Volume 66 , Issue 4 , Winter 1992 , pp. 637 - 670
Copyright
Copyright © The President and Fellows of Harvard College 1992

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References

1 Playthings 83 (June 1985): 30, 31.

2 “Plush is a trade term which applies to a stuffed toy which is soft and pliable and generally has a furry or velvet-like texture which is usually meant to simulate an animal's coat.” U.S. International Trade Commission, Summary of Trade and Tariff Information, “Dolls and Stuffed Toy Animals,” Publication 841 (July 1980), 2 (from the collection of Sharretts, Paley, Carter & Blauvelt P.C., Toy Manufacturers of America's international trade counsel, New York) [hereafter cited as SPC&B Collection]. The Toy Manufacturers Association (TMA) suggests that stuffed toys are one of fourteen basic toy categories. Within this particular category there are three types of stuffed toy: “the soft, cuddly kind for younger children; the character type, usually larger-than-life and more decorative than play-inducing and the realistic or collector type generally favored by teenagers and adults. Recently some stuffed toys have been designed with speech and action capabilities.” Toy Manufacturers of America, Toy Industry Fact Book [hereafter, TIFB] (1991–92 edition), 23.

3 The figures used in this study are those generated for TMA initially by A. William Adler and then by the NPD Group, Inc., Port Washington, N.Y. These statistics are based on a sample of major companies that accounted for between 52 and 66 percent of the industry, and they include imports. TMA “National Statistics Program Shipments,” Fact Sheets (1981, 1983, and 1985–92). Earlier figures for the category “Stuffed Animals and Puppets” suggest industry sales rising from $196 million in 1976 to $268 million in 1980; TIFB, Addendum (1980), 1. These figures are not compatible with those given in the U.S. Census under Standard Industrial Classification Codes 3942053 (Stuffed Toy Animals) and 3942054 (Other Stuffed Toys), which are subdivisions of the broader SIC Code 3942—Dolls.

4 There is no general analysis of the plush industry. For surveys or comments on specific firms and particular products, see the two major trade journals, Playthings and Toy & Hobby World for the 1970s and 1980s.

5 Suggestive approaches to analyzing the soft-toy industry can be found in Porter, Michael E., Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York, 1980)Google Scholar, and Wood, Stephen, ed., The Transformation of Work? Skill, Flexibility, and the Labour Process (London, 1989)Google Scholar. For broad discussions of the American mass market in the twentieth century, see Strasser, Susan, Satisfaction Guaranteed: The Making of the American Mass Market (New York, 1989)Google Scholar and Tedlow, Richard S., New and Improved: The Story of Mass Marketing in America (New York, 1990)Google Scholar. For a general discussion of consumption and the meaning of possessions, see Csikszentmihalyi, Mihaly and Rochberg-Halton, Eugene, The Meaning of Things: Domestic Symbols and the Self (Cambridge, England, 1981)CrossRefGoogle Scholar, and Leiss, William, Kline, Stephen, and Jhally, Sut, Social Communications in Advertising: Persons, Products and Images of Well-Being, 2d ed. (New York, 1990), 285–348Google Scholar. Trends in the post—Second World War economy are discussed in Feldstein, Martin, ed., The American Economy in Transition (Chicago, Ill., 1980)CrossRefGoogle Scholar.

6 Very few manufacturers of, or specialists in, stuffed animals have been in existence or have continued in the same company form for a long period. Historically, many firms have been small family enterprises that either have not kept detailed records or whose records are still hidden in the basements or attics of offspring. Even the larger enterprises of long standing like Gund, Inc., have retained comparatively few archives and artifacts, and these are not accessible for historical research. Soft-toy producers are and have been “entrepreneurial and not historically aware.” Their business is production and making money, and thay have neither the ego nor the sense to collect materials for history. (David A. Miller, president of TMA, interview with author, 15 May 1991, New York.) Some enterprises currently retain a clippings file and some catalogues, primarily for public relations purposes or to recreate an old toy for the collectors' market, but storage of records other than the bare minumum for legal purposes is considered a liability rather than an asset. Historians are thus left to work with whatever materials have been retained, often by chance, in museums and libraries, and with oral interviews, often of an anecdotal variety. Trade journals like Playthings, which started publication in 1903, offer considerable insights. Catalogues, either of producers like Gund, toy stores like F. A. O. Schwarz, or mail-order firms like Montgomery Ward, are useful, but they are very difficult to find for smaller companies. Newspapers carried feature articles and advertisements intermittently, but without an accurate index these are very time-consuming to locate. Given the difficulty of primary documentation, historians have paid little attention to the development of soft toys. In contrast, professionals writing for the general-interest or collectors’ market have produced some interesting books. See, for example, Jurgen, and Cieslik, Marianne, Button In Ear: The History of the Teddy Bear and His Friends (Giengen-on-the-Brenz, 1989)Google Scholar for a sound illustrated narrative of the world's leading quality soft-toy producer, the Steiff Company. Axe, John, The Magic of Merrythought: A Collector's Encyclopedia (Cumberland, Md., 1986)Google Scholar, is short on text.

7 Coleman, Evelyn J., “Butterick & Co. Cloth Animals,” parts 1 and 2, Teddy Bear and Friends 6 (May–June 1988): 36–39Google Scholar, (July–Aug. 1988): 35–37; Peggy, and Biolosky, Alan, “Gund's 90th Anniversary,” Teddy Bear and Friends 6 (Nov.-Dec. 1988): 28Google Scholar.

8 For descriptions of the origin of the teddy bear, see, among others, Schoonmaker, Patricia N., A Collector's History of the Teddy Bear (Cumberland, Md., 1981), 16–27Google Scholar; Bull, Peter, The Teddy Bear Booh, rev. ed. (Cumberland, Md., 1987), 23–41Google Scholar; Mullins, Linda, The Teddy Bear Men: Theodore Roosevelt and Clifford Berryman (Cumberland, Md., 1987)Google Scholar, and Inez, and McClintock, Marshall, Toys in America (Washington, D.C., 1961), 353–60Google Scholar.

9 Dolls are considered a different generic species from plush or soft toys. Although also traditionally classified as children's playthings, they have been made from wood, wax, china, and rags, are often dressed, and in modern times have been produced primarily for young girls. There is also a collectors' market in dolls. See Dorothy, S., Elizabeth, A., and Coleman, Evelyn J., The Collector's Encyclopaedia of Dolls (New York, 1968)Google Scholar. European manufacturers of soft toys have historically produced a wider range of plush (and continue to do so) than their American counterparts, who favor the teddy bear. The recent development of the collectors' market has stimulated increased international concentration on the teddy bear.

10 The outline of the American modern soft-toy industry can be gleaned from reading Playthings. A very general survey is available in Cockrill, Pauline, Teddy Bears and Soft Toys (Shire Album no. 225) (Princes Risborough, Aylesbury, Bucks., 1988)Google Scholar.

11 “Endpaper,” Playthings 79 (Oct. 1981): 90.

12 In the Census of Manufactures, stuffed toy animals have been included in the general SIC Code 3942—Dolls. In 1963 there were 410 establishments listed in this category, a total that declined to 340 in 1967, to 243 in 1972, to 231 in 1977, to 237 in 1982, and to 197 in 1987. Of these establishments, there were forty-nine stuffed toy animal companies with shipments valued at $100,000 or more in 1977, forty-one such companies in 1983, and twenty-one in 1987. U.S. Bureau of the Census, Census of Manufactures (1977, 1982, 1987), Industry Series, “Musical Instruments and Parts; Toys and Sporting Goods.” Some diversified companies would not be included in this category, nor would the cottage industry segment of plush. It is thus not possible to obtain statistics on individual firms' share of the market, but observers of the plush industry generally agree that the major suppliers have been Gund, Inc., Dakin Inc., Russ Berrie & Co., Inc., and Eden Toys, Inc. Firms with licensed products, like Kenner Toys with Care Bears and Tonka Corporation with Pound Puppies, make an erratic contribution to the business.

13 For a discussion of firm and industry competition in global markets in the post-Second World War decades, see Porter, Michael E., The Competitive Advantage of Nations (New York, 1990)CrossRefGoogle Scholar. Stephen Young, James Hamill, Colin Wheeler, and J. Richard Davies examine contract manufacturing and foreign subsidiaries as part of international supply strategies in International Market Entry and Development Strategies and Management (Hemel Hempstead, 1989), 173–91, 236–44Google Scholar. Gary Geriffi discusses the development strategies of newly industrializing countries (NICs) in the world economy, noting how East Asian nations have export-led economies that are closely tied in to the American market, in “Development Strategies and the Global Factory,” Annals of the American Academy of Political and Social Science 505 (Sept. 1989): 92–104CrossRefGoogle Scholar.

14 The toy trade journals, Playthings and Toy & Hobby World, regularly discuss the state of the business economy and the impact of inflation, interest rates, and recessions on the health of the toy industry. Useful discussions of economic trends in the doll and stuffed-toy industry are available in U.S. Tariff Commission, Summaries of Trade and Tariff Information, Schedule 7, vol. 4 (Washington, D.C., 1968), 179–87Google Scholar (SPC&B Collection), and in U.S. International Trade Commission, Industry and Trade Summary: Toys and Models, Publication 2426 (GM-1) (Washington, D.C., Nov. 1991)Google Scholar. For specific American companies moving their production offshore, see Shari J. K. Meltzer, director of communications, Gund, Inc., interview with author, 14 May 1991, Edison, N.J.; Jeff Bioloski, head, Plush Division, Russ Berrie & Co., Inc., interview with author, 13 Sept. 1990, Oakland, N.J.; Playthings 85 (Dec. 1987): 24Google Scholar. European companies producing soft toys for the mass market are also increasingly moving their manufacturing process to offshore locations to reduce labor costs. John Hales, managing director, Golden Bear Products, Ltd., interview with Chris Wrigley and author, 7 May 1991, Telford, England. For a general discussion of clustering, see Porter, Competitive Advantage, 148–54.

15 International Trade Reporter, Import Reference Manual (Bureau of National Affairs, Inc., 1991), 49–62Google Scholar; U.S. Customs Service, Department of the Treasury, Importing into the United States (Washington, D.C., March 1990), 24–26Google Scholar (both, SPC&B Collection); Ned H. Marshak, SPC&B, to author, 10 Feb. 1992; TIFB (1985), 1–2; (1989), 6–7; (1990–91), 1; (1991–92), 9–10; (1992–93), 11–13; Russ Berrie & Co., Annual Report (1989), 4; (1990), 1; Playthings 70 (Aug. 1972): 60; 71 (Aug. 1973): 58–59; 74 (Feb. 1976): 305; 79 (Nov. 1981): 44; 85 (Dec. 1987): 24; Toy & Hobby World 23 (March 1985): 10.

16 S. J. K. Meltzer interview; J. Bioloski interview; Pat Winters, “Gund and Bear It,” New Jersey Monthly (Nov. 1985), 66–72 (Gund, Inc., files); Diane C. Thomas, “King of the Fuzzy Wuzzies,” Gift Reporter (May 1986) (Russ Berrie & Co. files); “Billion Dollar Business,” Daisy (Nov. 1980); Joel Schwarz, “Harold Nizamian: Plush Business,” American Way Magazine (15 April 1986) (both, TMA clippings files).

17 S. J. K. Meltzer interview; Distribution 89, no. 12 (Dec. 1989): 32–37.

18 S. J. K. Meltzer interview; J. Bioloski interview; Russ Berrie Co., Annual Report (1984), 3; (1987), 3; (1989), 4, 16; Toy & Hobby World, Weekly Report (25 Oct. 1976), 4; (22 Aug. 1977), 3; (11 Aug. 1980), 5; Toy & Hobby World 20 (Dec. 1981): 53; Playthings 86 (Nov. 1988): 33; Teddy Bear Review 2 (Fall 1987): 26; The Patent Investor (30 Jan. 1986), n.p.; Gift Reporter (May 1986), 36, 38; “Russ: Russ Berrie and Company,” Enterprise (Spring 1987), 33–36 (all three in Russ Berrie & Co. files); Computerworld 26, no. 7 (17 Feb. 1992): 53, 58.

19 For suggestive insights into the growth of a teenage market, see Ewing, Elizabeth, History of Twentieth Century Fashion, 3d rev. ed. (London, 1992), 177–298Google Scholar, and Frith, Simon, Sound Effects: Youth, Leisure, and the Politics of Rock (London, 1983), 181–272Google Scholar. Stanley C. Hollander and Richard Germain have argued that youth marketing targeted at fifteen to twenty-four-year-old consumers was not a creation of the the 1960s, but that its cultural foundations were laid in the late nineteenth and early twentieth centuries. Hollander, Stanley C. and Germain, Richard, Was There a Pepsi Generation before Pepsi Discovered It? Youth-Based Segmentation in Marketing (Lincolnwood, Ill., 1992)Google Scholar. The power of youth purchasing, however, was much more effective in the affluent society of the 1960s and early 1970s when the Baby Boom youth population peaked, and it has remained important as modern marketing has become increasingly segmented.

20 “Endpaper,” Playthings 86 (June 1988): 98Google Scholar; TIFB (1980), 5; (1985), 3; (1990–91), 15.

21 Gift Reporter (May 1986), 36–38, 40, 45–46, 92; The Patent Investor (30 Jan. 1986), n.p.; Crain's New York Business 11 (20 Jan. 1986); “Real Estate Business Section,” The Sunday Record (17 Feb. 1985); Gift and Stationery Business (Nov. 1987), cover, 44, 50; Forbes (11 Feb. 1985); Florida Triangle News (University of Florida) (Spring 1986), 8–9, 16Google Scholar (all in Russ Berrie & Co. files); Russ Berrie & Co., Annual Report (1986), 2, 4–5.

22 “The Russ Story,” a promotional pamphlet, c. 1984 (Russ Berrie & Co. files); Russ Berrie & Co., Annual Report (1984), inside front cover. “Pop” and “rock” cassettes and flowers likewise were no longer sold only in record and music stores and in florists. They too were imaginatively displayed, often within easy access of cash tills, at a variety of outlets, but especially at supermarkets and gasoline stations.

23 Jennifer R. Monson, vice-president of product development, Russ Berrie & Co., interview with author, 13 Sept. 1990, Oakland, N.J.; J. Bioloski interview; Russ Berrie & Co., Annual Report (1984), 2–3; (1986), 4–5; (1987), 2–3; (1989), 2; Playthings 70 (July 1972): 50, 55; 71 (July 1973): 41; 72 (July 1974): 41; 79 (Oct. 1981): 90; 80 (June 1982): 30–35, 70; 81 (June 1983): 26; 86 (April 1988): 38; Toy & Hobby World 14 (May 1976): 1, 19–22; 15 (April 1977): 42–43; 19 (April 1981): 10, 22–23; 20 (April 1982): 18, 23. Some observers credit Russ Berrie's system of employing his own sales staff rather than relying on manufacturers' representatives to sell his products as a major reason for his rapid rise to success. This approach places an emphasis on personnel and direct contact rather than on advertising. It has also involved a high labor turnover, especially in the first three years of employment. In the late 1980s, concerted efforts were made to improve hiring techniques and to develop a special training program.

24 S. J. K. Meltzer interview; J. R. Monson interview; TIFB (1980), 4; (1985), 3; (1990–91), 7–8; Playthings 74 (Nov. 1976): 32; 76 (Oct. 1978): 76; 77 (Oct. 1979): 60–61, 94–95; 78 (Oct. 1980), 46–47; 79 (June 1981): 52–56, 58, 110–12; (Oct. 1981), 48–49, 81–82; 80 (Oct. 1982): 60–61, 91, 93–94; 81 (Oct. 1983): 56, 58, 60; 82 (Oct. 1984): 54–56, 127; 83 (Oct. 1985): 42–43, 112–14; 84 (July 1986): 36, 40, 64, 66–67; 85 (Aug. 1987): 44, 70–74; 86 (Aug. 1988): 38, 66–68; Toy & Hobby World 11 (21 May 1973): 4Google Scholar; 13 (May 1975): 1, 9; 20 (Nov. 1981): 51; 21 (Nov. 1982): 1, 67–71; 23 (Nov. 1984): 1, 29, 34, 38.

25 Licensing “is the business of leasing the right to use a legally protected name, graphic, logo, saying, or likeness in conjunction with a product, promotion, or service.” TIFB (1985), 4. The owner of the property (the licensor) usually signs a formal agreement with the licensee to manufacture or distribute the toy in exchange for a royalty of between 5 and 10 percent of sales, though some royalties have exceeded 15 percent. Licensors require a minimum royalty guarantee for the life of the contract and a stipulated advance at the time of signing. Initial contracts usually last two years, which gives time to get the product on the market and to develop sales. “Licensing,” typescript for an article by William Keller, p. 2 (c. 1983) (TMA clippings files). Playthings 74 (March 1976): 70–73, 141Google Scholar; (June 1976): 24–29; 75 (April 1977): 40–42; 76 (Feb. 1978): 104–5, 107; Toy & Hobby World 14 (May 1976): 22Google Scholar; 15 (April 1977): 40; 19 (June 1981): 47.

26 The majority, about 90 percent, of toy advertising dollars in recent years have been spent on television as distinct from print media and radio. The trade considers that television-advertised toys have sold at lower prices and in greater quantities than toys not advertised on television. The average profit margins for television-advertised toys fell from between 35–40 percent to 15–25 percent because of intense competition between retailers and the growth of mass merchandising. The plush sector of the toy industry was relatively immune to television advertising until the mid-1980s. U.S. International Trade Commission, Summary of Trade and Tariff Information, Publication 841, “Dolls and Stuffed Animals” (Washington, D.C., 1980), 7Google Scholar; TIFB (1980), 19–20; Playthings 72 (July 1974): 36Google Scholar; 83 (April 1985): 44; Toy & Hobby World 11 (2 July 1973): 1, 13–15Google Scholar; Toy & Hobby World, Weekly Report (24 May 1976), 1–2.

27 In the mid-1980s, close to 50 percent of the toy industry's sales were of licensed products. By the end of the decade this percentage had risen to nearly 60. Within the toy and games categories, plush had less potential for licensing, but with the tendency of plush manufacturers to diversify into giftware, their companies took a greater interest in licensing. S. J. K. Meltzer interview; J. Bioloski interview; TIFB (1985), 5; (1990–91), 16; Playthings 76 (July 1978): 47Google Scholar; 83 (June 1985): 28–31, 114–19; 84 (Feb. 1986): 288–91; 86 (Feb. 1988), 226–27; (June 1988): 26, 66–69, 80; Toy & Hobby World 19 (June 1981): 50–53Google Scholar; 22 (April 1984): 1, 16–20; 23 (April 1985): 1, 15, 18–21, 55–56. For an explanation of returns to floor space as distinct from a percentage of the manufacturer's list price, see Playthings 76 (Sept. 1978): 56–62, 67–70Google Scholar.

28 Playthings 79 (Feb. 1981): 182Google Scholar; 81 (Feb. 1983); 212, 214; 82 (Feb. 1984): 2; 86 (June 1988): 28, 66–67; Toy & Hobby World 19 (Feb. 1981): 193Google Scholar; 20 (April 1982): 16; 21 (Feb. 1983): 138, 200; (April 1983): 1; 22 (April 1984): 20; 25 (Feb. 1987): 167; 29 (April 1991): 30.

29 S. J. K. Meltzer interview; “Gund Advertising Brochure,” 1987; Gund Tidings 1 (Jan. 1989)Google Scholar, and 2 (1990) (Gund, Inc., files); Playthings 78 (Oct. 1980): 25Google Scholar; 80 (June 1982): 25; 84 (Feb. 1986): 75; 86 (June 1988): 98; 88 (June 1990): 36, 38; Toy & Hobby World 19 (Feb. 1981): 193Google Scholar-94; 20 (Dec. 1981): 47–50; 23 (Sept. 1984): 48; (Feb. 1985): L72/238; 24 (Feb. 1986): 69.

30 Playthings 84 (April 1986): 30–33, 91–93Google Scholar; (June 1986): 30–33, 111–15; 85 (April 1987): 34–36, 74–77; (June 1987): 36–39; 86 (April 1988): 38–41; (June 1988): 26–28; 88 (June 1990): 78–79; Toy & Hobby World 25 (Oct. 1986): 12, 21, 24Google Scholar; 25 (April 1987): 17.

31 D. A. Miller interview; Playthings 85 (April 1987): 35–36Google Scholar; (June 1987): 38; 86 (April 1988): 41; (June 1988): 28; 88 (April 1990): 43, 57; (June 1990): 36; Toy & Hobby World 19 (March 1981): 33Google Scholar; 25 (April 1987): 14, 17.

32 Playthings 78 (May 1980): 54–55Google Scholar; 79 (June 1981): 52–53; 82 (June 1984): 33; 83 (Feb. 1985): 222; 86 (June 1988): 80–81; Toy & Hobby World 20 (March 1982): 60–62, 67Google Scholar; 21 (April 1983): 68–70; 22 (March 1984): 32, 34; 23 (April 1985): 1, 15, 18–21, 55–56; 29 (April 1991): 33, 34; Teddy Bear Review 2 (Fall 1987): 27Google Scholar; Gund Tidings 1 (Jan. 1989)Google Scholar, and 2 (1990), and The KinderGund Experience (promotional brochures, Gund, Inc., files); Dakin & Company, Spring Catalogue (1990); Russ Berrie & Co., “Presentation Book” for Sales Staff (Fall 1990) (Russ Berrie & Co., files); American Way Magazine (15 April 1986) (TMA clippings files); TIFB (1989), 16; (1991–92), 18–19.

33 The collectible appeal of the teddy bear originated with old bears whose value escalated with scarcity. Seeing a marketing opportunity in producing a limited range of fine-quality products authenticated as a signed or numbered piece, manufacturers decided to cater to the adult consumer who could not afford the high prices of antiques. As this market developed, so specialist magazines like Teddy Bear and Friends, specialist sales points like Teddy Bear Fairs and Conventions, and information services like clubs and newsletters supported and stimulated the business. Collectors do not like to collect in a vacuum. They enjoy belonging to a network. Linda Smith, managing director and co-owner of Tide-Rider, exclusive American agent for Merrythought, Ltd., interview with Chris Wrigley, 19 Sept. 1990, Ironbridge, England; Teddy Bear and Friends, 5–9 (1987–91); Teddy Bear Review 5–6 (1990–91).

34 Cieslik, Button In Ear, 71, 100–101; Gerald Fisher, former vice-president of Reeves International, exclusive American distributor for Steiff stuffed animals, telephone interview with author, 28 May 1991, Washington, D.C.; “Steiff King Bearmaker,” Daily Record (N.J.), 14 Dec. 1986 (TMA clippings files).

35 In the pop music industry, this type of appeal to the thirty to fifty-year-old group would take another form, with boxed sets of records each accompanied by a 20–30—page booklet on the artists and the recording sessions. Back-catalogue sales became a growing proportion of overall sales. By the late 1980s and early 1990s, the national and music press were seeing this emphasis on back-catalogues and on a few superstars rather than on investment in new acts as constituting a crisis for the well-being of the industry. See, for example, The Guardian, 20 Sept., 11 Oct. 1990, and “OK to Panic Now,” Q 74 (Nov. 1992): 64–68Google Scholar.

36 TIFB (1980), 18; (1985), 13; (1986), 17; (1990–91), 15; Marlene Lehman, Tide-Rider, Inc., interview with author, 12 Sept. 1990, Hauppauge, N.Y.; L. Smith interview; S. J. K. Meltzer interview; Playthings 76 (Sept. 1978): 63–66Google Scholar; 81 (March 1983): 94; (Sept. 1983): 22; 86 (Nov. 1988): 33; Toy & Hobby World 13 (Oct. 1974): 36Google Scholar; 24 (Dec. 1985): 1, 39.