1. Business

Mattel to sell one Thomas the Tank Engine brand direct to consumers

Published Jul. 18, 2014

Like many 4-year-olds, Benny Nelson adores Thomas the Tank Engine.

He has amassed a collection of more than 40 engines in the Thomas & Friends line, which he shares with his 2-year-old brother, Theo.

Their mother, Lisa Nelson, likens the trains to dolls, with stories and personalities. "It's a very creative outlet," she said. "My son talks to himself the whole time while playing with them."

Mattel hopes that level of personal interest among children and parents is the key to selling more toys. This month the toy company is establishing a direct-to-consumer program to sell a premium line for one of the longest-running Thomas merchandise lines, Wooden Railway tracks and engines. Part of Mattel's Fisher-Price unit, the wooden toy line will be sold via catalog and an e-commerce website, and through a partnership with 20 specialty stores nationwide.

For Fisher-Price, the direct-to-consumer model was a natural fit for the Thomas & Friends brand. "Kids that collect Thomas are more passionate about the story line and the characters," said Geoff Walker, executive vice president for global brands at Fisher-Price.

Although the Thomas & Friends Wooden Railway toys have been around for years, Mattel only recently acquired the rights to make them when it bought HIT Entertainment, the home of Thomas and other preschool brands, from private equity firm Apax Partners in 2011. At the time, Mattel was making toys for HIT, selling $150 million worth of Thomas the Tank Engine plastic and die-cast toys in 2010. But it wasn't until 2013 that Mattel acquired the rights to Wooden Railway.

Because the toys are made of wood, they cost a little more than their plastic counterparts. "This is a premium segment of the brand; the consumer expects to pay a little more for the product they get," Walker said.

The higher price does not faze some parents. But for others, Thomas toys can become expensive to collect. Natasha Price tends to buy secondhand engines for her son, Mason, 41/2. "If you are a thrifty parent, you go onto eBay and buy them used," she said.