During this holiday season, two area manufacturers who sell toys worldwide bring new meaning to the “shop local” movement.
The products are featured at big-box retailers, but they are designed, sold and made locally by both companies, who collectively employ more than 1,300 in the region.
Step2 employs about 500 at its Streetsboro headquarters and plant (and 350 at its plant in Perrysville in Ashland County) and Little Tikes employs about 800 at its headquarters and plant in Hudson.
Executives from both companies are expecting a good holiday season and hoping their toys top kids’ wish lists.
The International Council of Shopping Centers is forecasting a 3.4 percent sales increase from last year, though retailers are expecting a more modest spending season.
Tom Richmond, Little Tikes general manager and executive vice president of corporate parent MGA, said initial reads are positive about the company’s new products and packaging. But he believes consumers are waiting for the big sales around Thanksgiving Day and Black Friday.
Retailers “are all fighting for the consumer dollar,” said Richmond.
Both companies feature play kitchens and other role-playing toys among their products, as well as sports toys.
We “give them the environment that will emulate what mom and dad are doing in the kitchen,” said Richmond.
Jack Vresics, Step2 president and chief executive officer, said his firm is enjoying a good year. Last year’s sales were 10 percent higher over 2011 and set a record, he said. This year, the manufacturer is ready for brisk sales, but Vresics said the recent government shutdown meant retailers were cautious in their orders. Still, Step2 is prepared to continue shipping to retailers until Dec. 22 to account for any last-minute business, he said.
Advertising is important for both manufacturers with Step2 featuring videos on social media including on YouTube and with moms who are bloggers on the Internet. Meanwhile, Little Tikes is featuring new television ads including showing “executives” at the toy headquarters played by children and a British actor playing Richmond as CEO.
Both companies said they have made investments and improvements to local production facilities.
Step2 said it invested $1 million to re-engineer its plant with computerized controls on the rotational molding machines for better energy efficiency.
“We are in the process of moving every piece for better ergonomic safety and utilizing space levels,” said Vresics.
Vresics said those efficiencies help the company keep the prices down since resin costs have increased. Step2 doesn’t want to raise prices for cost-conscious consumers.
In late 2012, the company received state tax credits for pledging to add jobs during upcoming expansion projects. In Streetsboro, Step2 expects to create 125 full-time equivalent jobs, generating $3.3 million in new annual payroll. In Perrysville, Step2 is planning to add 75 full-time equivalent positions, generating $2 million in new annual payroll.
Vresics said the company has not yet taken the state funds or added the additional space, but the company is “very committed to this area.”
Last March, Step2 opened a plant in Saudi Arabia to make a limited number of its toys for the European market. About 70 to 80 percent of the products sold internationally are still shipped from the U.S.
At Little Tikes, employment is up, with about 60 new full-time positions at the Hudson headquarters and plant, said Richmond. The company has also recently added injection molding to its plant, which adds to its blow molding and rotational molding and allows the company to move some of its manufacturing of products back to the United States.
There are three new machines and lines in Hudson, said Richmond.
About 75 percent of Little Tikes’ products are manufactured in Hudson; the remainder are manufactured overseas, mainly in China. Richmond said the company has “consciously made an effort to make in America for America. It’s still tough when you’re talking about a small preschool product like a $10 product with an electronic part because you wind up importing the electronic parts anyway.”
Richmond said he is encouraged by the trend to bring more products and what are called “subparts” back to the U.S., which will bolster the supply chain for companies such as Little Tikes in the U.S.
When the toy makers take a break to show off products for the 2013 holiday season, they are already thinking ahead, too.
“You should see the stuff [Vice President of Research and Development John Sinchok] is cooking up for spring ’14 and fall ’15. There are going to be some major hits,” said Vresics.