Vintage toy maker Wham-O trying to regain its punch

By Michael Liedtke AP Business Writer
Monday June 11, 2001

SAN FRANCISCO – After slipping and sliding nearly out of sight just a few years ago, the company that gave the world the Frisbee, the Hula Hoop and the Hacky Sack is trying to regain its footing as a toy trendsetter. 

Wham-O, based in San Francisco, has come up with one of the top-selling toys during the industry’s traditionally sluggish summer season — a rejuvenated version of its once-popular Slip’N Slide product line. 

The entire Slip’N Slide inventory has already been shipped out to retailers, making the backyard water slide a success beyond the privately held company’s expectation. 

Wham-O is now on a pace for $50 million in sales this year, more than twice its revenue for 1997. That was the year a group of investors led by the New York-based Charterhouse Group bought the toy maker from Mattel Inc. for about $20 million. 

Charterhouse and its partners paid a bargain-bin price for a toy box full of classic creations that also included Superball, Boogie Board, Silly String and Water Wiggle. 

Despite its brands’ name recognition, Wham-O seemed to lose its punch under Mattel, which focused most of its efforts on much bigger and highly profitable product lines like Barbie dolls and Hot Wheels model cars. 

Its new management team set out to re-establish the popularity of the company’s best-known toys and then introduce updated versions of the top sellers. 

“This was a small business for Mattel, but we think we can build it into something much bigger with our more focused approach,” said Wham-O chief executive Mojde Esfandiari. “Our objective is to grow into a business with $200 million to $300 million in annual sales within the next few years.” 

To hit its sales target, Wham-O — named after the impact of a well-aimed slingshot, the company’s original product — expects to snap up other promising toy lines, much like company co-founders Rich Knerr and Spud Melin did in 1955 when they bought the Pipco Flying Saucer from inventors Fred Morrison and Warren Franscioni. 

After initially selling the discs as the Pluto Platter, Wham-O later renamed it “Frisbee.” The Frisbee and Hula Hoop helped establish Wham-O as one of the toy industry’s top fad factories. 

Mattel and Hasbro Inc. dominate toys today — together they have about 37 percent of the $23 billion industry. Wham-O’s plan is to establish itself as the No. 1 maker of outdoor toys. 

“It’s a smart strategy on Wham-O’s part,” said New York toy consultant Chris Byrne. “There is tremendous equity built up in some of their brand names. The challenge for them is to figure out a way to find new, innovative ways to get customers to buy more Frisbees and more Slip’N Slides.” 

The comeback of the Slip’N Slide — a popular product shelved in the early 1990s after a series of adult accidents — is an example of how Wham-O hopes to put some of the Baby Boom generation’s favorite toys on the wish lists of 21st-century kids. 

When Wham-O decided to revive it, the product was redesigned to add several new twists, including longer ramps, water tunnels and colorful archways. 

“We don’t want today’s kids to think of our toys as their Mom and Dad’s toys,” said Scott Masline, Wham-O’s senior vice president of marketing. “The nostalgia associated with our toys is nice, but in the end it’s all about product innovation.” 

Wham-O says the redesigned slides — labeled with prominent warnings against use by anyone above 11 years old — are perfectly safe. 

Oakland attorney Matthew Rinaldi, who negotiated a settlement for a man who broke his neck on the Slip’N Slide, also thinks the latest version is safe, but fears the product’s comeback will inspire some households to pull out the more dangerous old versions out of their garages. 

“We are very concerned,” Rinaldi said, “because it seem like the Slip’N Slide has an aura of being cool again.” 

During the next year, Wham-O plans to introduce 50 new products to its existing line of about 120 toys. Most of the new products are designed for winter use — an attempt to diversify a business now heavily reliant on summertime sales. 

Most of the new products will attempt to piggyback on established brands. For instance, the company will sell products such as the Frisbee Flyer, the Hula Hoop Saucer and the Slip’N Slide Snow Spinner to ride down snow-covered hills. 

For now, Wham-O is just hoping that its summer sales remain strong. The toy maker may be one of the few businesses based in blackout-prone California to be rooting for hot weather during the next few months. 

“I pull out the paper every morning and turn to the weather map,” Masline said. “When I see red all over the map, I know that means green for us.”