Classic toymakers merge as Covid-19 creates boom time
Spin Master, the company behind the Etch A Sketch and Paw Patrol brands, has agreed to acquire Rubik’s Brand for about $50m (R821m), tying together two of the world’s most iconic toy brands.
The merger comes at a boom time for classic toymakers as parents turn to familiar products to entertain children stuck in lockdown.
Like sales of Uno, Monopoly and Barbie dolls, Rubik’s Cube purchases have spiked during the pandemic, according to the puzzle-maker’s CEO, Christoph Bettin. He expects sales to jump 15% to 20% in 2020, compared with a normal year, when people purchase between 5-million and 10-million cubes.
By acquiring Rubik’s, Torontobased Spin Master can better compete with its larger rivals, Hasbro and Mattel. All three companies have pivoted to become less reliant on actual product sales, diversifying into TV shows, films and broader entertainment properties based on their toys.
Spin Master CEO Anton Rabie said he would not rule out films or TV shows based on Rubik’s Cubes, but he was focused for now on creating more cube-solving competitions and cross-marketing it with the company’s other products.
“Whoever you are, it really has a broad appeal from a consumer standpoint,” he said.
Hungarian inventor Erno Rubik created the Rubik’s Cube in 1974, a solid block featuring squares with coloured stickers that users could twist and turn without it falling apart.
It gained popularity in the 1980s and has remained one of the bestselling toys of all time, spawning spinoff versions, international competitions of puzzle-solvers, books and documentaries.
The toy has been particularly well suited to pandemic conditions. During lockdowns, parents have sought to give children puzzles that boost problem-solving skills useful in maths and science careers. Normally, toys tied to major film franchises are among the most popular products going into the holidays, but studios have delayed the release of major new movies because of the coronavirus. So classic products are experiencing a mini-renaissance.
Bettin said it was the right time to sell the company, with the founding families behind it ready to move on. Londonbased Rubik’s Brand was formed out of a partnership between Erno Rubik and the late entrepreneur Tom Kremer, while private equity firm Bancroft Investment holds a minority stake.
Spin Master, started by a group of three friends in 1994, has expanded through the purchase of well-known brands, including Erector sets and Etch A Sketch.
Rabie says he works to honour the “legacy” of those products, which Bettin cited as a key reason to sell the brand to Spin Master over larger companies that were interested.
Spin Master acquires Rubik’s Brand to take on Hasbro, Mattel