Tustin-based California Creations Inc. is making wind-up toys for adults.
The seemingly small niche is growing globally with California Creations looking to expand its market share.
The company makes and distributes its brand of plastic wind-up toys along with licensed wind-up toys from Japanese toymaker Tomy Co. in stores throughout North America.
Now the company is expanding its distribution and marketing to include the rest of the world.
“We’re taking the business from zero because a lot of these places haven’t seen toys like this since 1985,” said Mark Dinges, president of California Creations. “We’ve got orders from all over the world.”
The toymaker started shipping wind-up toys to France, Germany, Russia, South Africa, the Middle East and Australia last year.
The company currently is looking at expanding in the Asian and Latin American markets by the end of this year.
“We just shipped our first order to India,” Dinges said.
California Creations is a long way from where it started in 1975, when it was a local distributor for toy manufacturers.
Dinges’ parents started the company to be a go-between for toymakers and toy and gift stores in the Southwest.
“We’re now a global distributor and manufacturer for companies all over the world,” Dinges said.
The company sells toys under the names of Z Wind Ups, Z Tubbies, Z Pull Backs and Z Pocket Critters, along with Tomy wind-ups.
The toys sell for $4.95 in more than 10,000 stores including those run by Maine-based Borders Group Inc. and New Jersey-based Party City Corp. The toys are also sold on numerous Web sites including Amazon.com.
Dinges estimates that California Creations will sell around 20 million wind-up toys this year—including the Tomy licensed wind-up toys.
The Business Journal estimates sales at about $25 million this year.
Recession Resistant
The company hasn’t seen much effects from the recession as parents still are spending money on their kids and looking for less expensive toys.
“Consumer spending will continue to do well for toys,” said Gerrick Johnson, an analyst with Canada’s BMO Capital Markets Corp. “Whether times are tough or whether we’re moving into a recovery, a lot of moms and dads are continuing to budget. Budgets are good for toys, because parents may cut back in other areas, but they won’t scrimp on kids.”
People are often surprised that adults buy the toys while waiting in check-out lines, Dinges said.
“Sixty-five percent of our toys are sold to adults,” Dinges said. “Children love them, but we sell more to adults than kids, which is a funny thing.”
The company also is working its way into collector markets as it revamps and redesigns its toy lines every year with different variations and functions.
“Part of the appeal is the ‘what will it do next’ factor, which has increased our demand from collectors,” Dinges said.
The toys include dogs that do flips, break-dancing seals and cheerleaders that do the splits, among others. Some even have the know-how to never run off the side of a table.
The company hopes one day its brand of wind-up toys will share the same legacy and collectability reserved for Pez dispensers and other vintage toys.
“I would love in 20 years to be able to say everybody in the world knows of Z Wind Ups,” Dinges said.
The company really started pushing wind-up toys in 2007 when it started making them instead of just distributing them.
When Tomy, which has its North American headquarters in Santa Ana, decided to get out of the wind-up toy business in 2007, California Creations negotiated with the Japanese toymaker for the worldwide exclusive license to make its brand of toys.
Wind-up toys had been a chunk of Tomy’s business since it figured out a way to make small, precision gears out of plastic in 1977. As the toymaker shifted into video games, robots and other toys, the wind-up business fell to the wayside.
“This business wasn’t that important to them,” Dinges said. “They decided they wanted us to produce them instead.”
History
Dinges has a long history with Tomy.
California Creations negotiated a marketing agreement with the company in 1986 to market the plastic wind-up toys to North American retailers.
Tomy stopped distributing its toys with Dinges’ company in 1989 due to some problems with relocating its plants, but it redrafted the marketing contract in the mid-1990s.
“We’ve been selling the toys ever since,” he said.
Tomy took over fellow Japanese toymaker Takara Co. in 2006 and pared down its offerings.
Tomy sold the wind-up molds to California Creations in 2007 and worldwide rights to sell the toys. The recession pushed Tomy to scale back further, cutting its Santa Ana staff last
year.
California Creations has signed large distribution deals throughout Europe to ship and sell toys in many large retail stores.
“Since we started with them we have had probably in the ballpark of a 2,000% increase in business,” Dinges said.
Dinges is an old pro at selling off-beat toys to consumers and retailers.
He started out helping his parents sell toys at trade shows and gift stores as a kid. Through the years, he has sold boatloads of Pog milk caps, juggling Devil Sticks, foam animal Fun Capsules and Mr. Wonderful talking dolls.
“I’ve marketed over 500 products for companies since 2007,” Dinges said. “There are a lot of products you’d recognize but wouldn’t know it was us.”
The toys are designed in Tustin as part of a collaboration among engineers in China, outside contractors and Dinges.
The toys are made in China at seven different plants.
The Tustin headquarters handles the logistics and marketing for North America.
The Chinese office is responsible for shipping throughout Asia, the Middle East and Europe.
Dinges said his company has the corner on this market after folding its main competitors’ wind-up designs—Tomy and an undisclosed Hong Kong manufacturer—into its lineup.
“We basically took our biggest competitor and brought them into our fold,” he said. “We’re now its No. 1 customer in the world.”
