NEW TWIST ON FUN

Wham-O be­lieves its clas­sic toys can ap­peal to to­day’s young at heart

Los Angeles Times - - BUSINESS - By Steven Zeitchik

Life was once an easy sum­mer breeze for Wham-O. The South­ern Cal­i­for­nia toy out­fit, founded in a South Pasadena garage shortly af­ter World War II, churned out Fris­bees like pan­cakes and Su­per Balls like gum­balls.

Its Boo­gie Board (de­vised in 1971 by Or­ange County-bred Ba­hai surfer Tom Morey) stood sen­tinel in sub­ur­ban garages. Only squares didn’t own a Hula Hoop (in­tro­duced in 1957; 100 mil­lion units sold within three years).

In Wham-O’s tele­vi­sion ads, its iconic star­burst logo dropped into liv­ing rooms like a Su­per Ball off a third-story bal­cony. Times sure have changed. Of the many en­ter­tain­ment-cen­tric out­fits dis­rupted by the dig­i­tal era, few have been up­ended like Wham-O. Its toys, once sym­bols of an end­less sum­mer, are now relics of a by­gone sea­son. Even the no­tion of a com­pany de­voted to plas­tic play­things feels like an anachro­nism. Why kick around a bean­bag when there’s FIFA Mo­bile Soc­cer?

Wham-O has had a rough time fi­nan­cially too. Sales fell sharply from their peak, but were still hov­er­ing around $80 mil­lion as of 2005, ac­cord­ing to pub­lic doc­u­ments and com­pany state­ments. Since then they’ve slipped fur­ther, to less than a quar­ter of that as of 2015.

But a new set of ex­ec­u­tives isn’t con­vinced the com­pany is doomed. Since they took over at the start of last year, they’ve come up with a num­ber of new ideas and, like Su­per Elas­tic Bub­ble Plas­tic (in­tro­duced in 1970), set out to put some air in them.

Their plan high­lights the tricky and at times un­in­tended con­se­quences of dig­i­tal change. Fast-hurtling tech­nol­ogy may dis­rupt tra­di­tional busi­nesses, but the dis­rupted have a few adap­tive tricks of their own. Yes, Wham-O ex­ec­u­tives say, they were al­ready car­ry­ing a some­what dusty prod­uct line with low up­side — and that was even be­fore this slick dig­i­tal world came along and threat­ened it with ob­so­les­cence.

Yet at heart their prod­ucts ac­tu­ally op­er­ate on a bedrock Sil­i­con Val­ley (and hu­man) prin­ci­ple: ad­dic­tive di­ver­sions, es­pe­cially those built around com­mu­nity, never go out of style.

“We think there’s a way to make our prod­ucts the new cool,” Wham-O Pres­i­dent Todd Richards said. “Be­ing out­side can be the new iPhone.”

Richards is in his ground-floor workspace at Wham-O head­quar­ters in Car­son, an of­fice in a se­ries of low-slung in­dus­trial-look­ing build­ings tucked off a main road.

Around his desk lie var­i­ous dis­trac­tions — or are they re­search? A minia­ture bas­ket­ball hoop. A wa­ter bal­loon “aqua bow.” Balls, discs and an as­sort­ment of fly­ing ob­jects. Richards turns to them when he needs a break from think­ing about how to mod­ern­ize his com­pany, or as in­spi­ra­tion for the same.

Like, for ex­am­ple, the YouTube chan­nel the com­pany has cre­ated, in which users can do things such as up­load videos of their cre­ative (if hardly safety-first) uses of the Slip ’N Slide.

“Of­fi­cially the box says un­der 12,” he said wryly of the wa­tery back­yard im­ple­ment. “Not ev­ery­one abides by that.”

Richards over­sees a South­land-based staff of about 30 em­ploy­ees. (A sec­ond of­fice of about 50 staffers sits in Hong Kong.) The group’s mis­sion: to tweak de­signs and mar­ket­ing for the 21st cen­tury. At their core, af­ter all, many of their prod­ucts func­tion the same way as those toys in Grandpa’s base­ment. But Richards main­tains they can be repo­si­tioned for a new au­di­ence.

At Coachella this year, Wham-O sent out am­bas­sadors. The emis­saries handed out Hacky Sacks (first li­censed by Wham-O in 1983, they are le­gally re­quired to be present for Phish to per­form) and talked to con­cert­go­ers about how to mas­ter the mini-sphere. The idea was to up­date the toy’s im­age from 1990s jam-band sta­ple to 2017 School­boy Q ac­cou­ter­ment.

As part of a pro­mo­tional trea­sure hunt, Wham-O also re­cently hid Fris­bees through­out Venice, the South Bay and other sandy spots in the Los An­ge­les area and leaked out clues about where to find them — Poke­mon Go: the 175gram ver­sion. (Among the prizes: the chance to in­ter­act with ex­ec­u­tives from the com­pany.)

“A lot of young peo­ple would love our prod­ucts if they got the chance to know what they are. But they’ve never had the op­por­tu­nity,” said Olyvia Pronin, the com­pany’s di­rec­tor of mar­ket­ing. “We’re try­ing to show them what they’re miss­ing by go­ing to wher­ever they are.”

Or to what­ever they’re on. Wham-O is de­vel­op­ing a Fris­bee app that will es­sen­tially al­low the disc to be “thrown” from one mo­bile de­vice to an­other — all the grat­i­fi­ca­tion of back­hand­ing a low slider to your buddy with­out any of that run­ning-into-trees messi­ness.

“You’re sit­ting in a meet­ing and you say, ‘Hey Paul, catch this,’ ” Richards said, mim­ing a wrist-f lick swipe across an imag­i­nary screen.

“And Paul is at the other end of the con­fer­ence room and he looks up and ‘catches it’ just in time.”

Af­ter be­ing run like a fam­ily­sized busi­ness for nearly 35 years — the com­pany was founded in 1948 by USC alums Richard Kn­err and Arthur “Spud” Melin, who cap­i­tal­ized on what were then cut­tingedge chem­i­cal and in­dus­trial ad­vances — Wham-O in the last few decades has en­dured a re­volv­ing door of own­ers, in­clud­ing Mat­tel, and a se­ries of re­tail woes.

Richards took over as pres­i­dent when the fal­ter­ing Wham-O was sold to his pri­vately held Car­son-based In­terS­port and Hong Kong­based Stal­lion Sport for an undis­closed — but cer­tainly bar­gain­base­ment — sum at the end of 2015. The seller was Cor­ner­stone Over­seas In­vest­ments, which had owned Wham-O for about 10 years and watched as sales cratered.

Richards be­lieves he’s fi­nally hit upon a win­ning for­mula. Soft-spo­ken but phys­i­cally im­pos­ing — he’s a dirt-bike afi­cionado who com­mutes to work on his mo­tor­cy­cle — the ex­ec­u­tive was a vice pres­i­dent of sales for Wham-O in the early 2000s.

Af­ter leav­ing the firm, he watched with some con­ster­na­tion as Wham-O un­der Cor­ner­stone tried to com­pete us­ing more generic prod­ucts such as beach sand pails.

Richards had lit­tle hope he could do any­thing about that un­til Stal­lion’s chief, Joseph Lin, ap­proached him sev­eral years ago with word that Wham-O was avail­able. The two par­ties soon had put to­gether fi­nanc­ing and closed the deal. (Lin, Wham-O’s CEO, de­clined to be in­ter­viewed for this ar­ti­cle.)

With EBay and other en­ti­ties driv­ing a huge nos­tal­gia in­dus­try — the com­pany has a store on the re­tail site, should you be in the mar­ket for that vin­tage Wham-O hunt­ing sling­shot — Richards made the ac­qui­si­tion un­der the be­lief that Wham-O was well-sit­u­ated and just needed some new en­ergy. He quickly cre­ated a start-up en­vi­ron­ment to re­think how Wham-O does busi­ness.

The com­pany’s Car­son of­fices feel like a space where em­ploy­ees of a Sil­i­con Val­ley gi­ant might en­gage in some much-needed toy-based re­lax­ation from their stress­ful jobs. Only in this case, the toys are the stress­ful jobs.

At reg­u­lar in­ter­vals, staffers will gather on the sec­ond f loor and rain down Su­per Balls (in­tro­duced in the early 1960s; it’s how the Su­per Bowl got its name) or head out to the park­ing lot to try new Slip ’N Slide de­signs (in­tro­duced in 1961).

In a large room, a hand­ful of toys, in­clud­ing one in­volv­ing Nerf pro­jec­tiles, of­fers a com­bi­na­tion brain­storm ses­sion/stress-re­liever.

“Don’t tell any­one too much about what’s in here,” Pronin said, af­ter al­low­ing a re­porter to test­drive some pro­to­types.

For a ma­ture busi­ness such as Wham-O, the com­pany’s abil­ity to in­no­vate can turn on small tweaks.

Wham-O also is us­ing a crowd­sourc­ing model, hear­ing as many as sev­eral dozen pitches a week from or­di­nary cit­i­zens who think they’ve come up with the next great toy; the ideas some­times find their way into the com­pany’s prod­uct-de­vel­op­ment pipeline. The idea is to make all out­door Wham-O toys as ubiq­ui­tous as Silly String (in­vented in 1972, it has been used by New Year’s rev­el­ers ever since).

Dig­i­tal ef­forts aren’t the only way Wham-O is seek­ing to grow. New phys­i­cal toys have been a pri­or­ity too.

The aqua bow, for in­stance, al­lows wa­ter bal­loons to be shot a max­i­mum dis­tance of 150 yards, in­stantly mak­ing any fam­ily pic­nic more per­ilous.

And Richards says a rad­i­cal new Fris­bee de­sign is on its way. At first he doesn’t let on what it is, then even­tu­ally some de­tails slip out — it’s shaped more like a square and can thus “self-cor­rect” and fly longer and straighter than the saucer-shaped disc that’s been keep­ing us and our mutts happy for years.

“It will change ev­ery­thing,” Richards said, flash­ing the smile of a man about to tell the rest of the Bingo room he’s hold­ing the win­ning card.

For any Fris­bee or Hacky Sack purist who thinks per­fec­tion can’t be im­proved upon, a wor­thy re­minder comes in the form of an Aer­o­bie (not a Wham-O prod­uct, to their cha­grin). The hol­lowed­out disc, cre­ated on a lark by a Stan­ford physi­cist decades af­ter the Fris­bee, could coast end­lessly on air and made a cer­tain sum­mer camper circa 1987 feel like he had the arm of Joe Mon­tana.

But for all of its am­bi­tion, a num­ber of hur­dles stand in WhamO’s way.

With con­sol­i­da­tion hav­ing gripped the toy busi­ness for years, run­ning an in­de­pen­dent pro­ducer of low-tech toys isn’t sim­ple. The num­ber of re­tail­ers has dwin­dled and shelf space is at a pre­mium. On­line sales, mean­while, can be tricky for a com­pany that de­pends on con­sumers hold­ing its prod­ucts in their hands.

And while the spe­cific style and name of Wham-O toys are copy­righted, their ba­sic idea can be — and of­ten is — im­i­tated by com­peti­tors, who can take ad­van­tage of modern ef­fi­ciency tools such as in­ex­pen­sive for­eign la­bor and man­u­fac­tur­ing costs.

Not to men­tion the chal­lenge of com­pe­ti­tion from new fads the com­pany isn’t be­hind (e.g., the fid­get spin­ner).

Maybe most im­por­tant, the com­pany is teth­ered to the past sim­ply by its con­sti­tu­tion.

“The down­side of [Wham-O’s] busi­ness model — in which prod­ucts them­selves at­tain greater brand eq­uity than their par­ent brands — is it means Wham-O has a more dif­fi­cult time with launch­ing new prod­ucts,” said Clay­ton Critcher, a re­tail ex­pert and pro­fes­sor at Berke­ley’s Haas School of Busi­ness.

“When each prod­uct is es­sen­tially its own brand, it raises the mar­ket­ing chal­lenges in push­ing new prod­ucts. It re­quires Wham-O to launch a new brand with each prod­uct.”

Wham-O ex­ec­u­tives point to a lower stan­dard for suc­cess.

“A $100-mil­lion com­pany is not big if you’re try­ing to com­pete with Mat­tel or Has­bro, but it’s big for a small firm in Car­son,” Richards said, cit­ing an even­tual rev­enue tar­get.

Ex­ec­u­tives of pri­vately held Wham-O de­clined to re­veal fi­nan­cial in­for­ma­tion, say­ing only that they hope to in­crease sales to that $100-mil­lion mark by 2021 and have made sig­nif­i­cant progress to­ward that goal.

As it looks to fight its way back onto toy store shelves, Wham-O hopes to take ad­van­tage of built-in nos­tal­gia for its name.

Richards likes to tell a story about how ma­gi­cian David Blaine cold-called the com­pany once, seek­ing a mas­sive ship­ment of Su­per Balls, and freaked out when he re­al­ized he was talk­ing to the head of Wham-O.

Ex­ec­u­tives think that pro sports’ push for more out­door play could ben­e­fit the com­pany, too. A TV ad for the NFL’s Play 60 cam­paign, for in­stance, has stars ad­vo­cat­ing that kids throw a Fris­bee.

Ul­ti­mately, though, any dig­i­tal age Wham-O re­vival may come down to an old-fash­ioned ques­tion: Do peo­ple en­joy its phys­i­cal prod­ucts?

Ex­ec­u­tives cer­tainly think they will.

“Look at this,” Richards said, as he picked up Su­per Balls of vary­ing weights and col­ors and be­gan bounc­ing them. “Come on. You’re go­ing to tell me any­thing on a screen is as fun as this?”

Gina Fer­azzi Los An­ge­les Times

LIKE OTHER toy com­pa­nies, Wham-O has been hurt by the dig­i­tal era. But led by a new set of ex­ec­u­tives, the Car­son firm has a num­ber of new ideas. Above, em­ploy­ees Nancy Nosko, left, and Tonya von Sten­zsch try out the lat­est Hula Hoops this month at Wham-O’s head­quar­ters.

Wham-O

A VIN­TAGE ad for the Hula Hoop. It was in­tro­duced in 1957 and 100 mil­lion units were sold within three years.

Gina Fer­azzi Los An­ge­les Times

IN A NOD to the dig­i­tal age, Wham-O is de­vel­op­ing a Fris­bee app. Above, em­ploy­ees play with new Fris­bees this month at the com­pany’s head­quar­ters in Car­son.

Gina Fer­azzi Los An­ge­les Times

“WE THINK there’s a way to make our prod­ucts the new cool,” Wham-O Pres­i­dent Todd Richards said.

A VIN­TAGE ad­ver­tise­ment for Wham-O’s Su­per Ball.

USC ALUMNI Arthur Melin, left, and Richard Kn­err, shown in an un­dated pho­to­graph, founded Wham-O in 1948. They cap­i­tal­ized on what were then chem­i­cal and in­dus­trial ad­vances.

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