JAKKS Pacific Toys

Founded in 1995, the toy company JAKKS Pacific has acquired some of the best-known toy licenses in the United States, including Cabbage Patch Kids, Neopets, and the Care Bears.

JAKKS was the third toy company started by Queens native Jack Friedman, who had gotten his start in sales 30 years earlier at the Norman J. Lewis Associates toy company (NJL). In 1970, he left NJL to form his own company, reversing the initials of his former employer to LJN. The new company capitalized on the increasing commercialism of television and movies by acquiring the toy licenses for various media, from Magnum P.I. and the Thundercats to E.T. and Gremlins. As the company became more successful, it attracted the attention of Universal and was acquired in 1986. Though Friedman was given a new contract, he was unhappy running LJN from its new California offices and struck out on his own again, starting THQ Inc. as a video game company that specialized in licensing games based on the movies produced in nearby Hollywood studios. THQ flourished for the first few years until the video game industry grew more sophisticated, to the point that its emphasis on cutting-edge technology and graphics exceeded Friedman's grasp of the market; as a man from the toy industry, not the computer industry, he was by his own admission operating in a frame of reference that the industry outgrew.

JAKKS Pacific was his next venture, cofounded with friend Stephen Berman, who had headed a fitness products company before joining THQ. Perhaps learning from LJN's acquisition, Friedman founded JAKKS with the express goal of acquiring other toy companies. The field, especially outside of the game industry, was led by the Big Two of Hasbro and Mattel, and outside of those two the remaining pie was divided into many tiny slices that Friedman felt could and should be consolidated. Funds for such consolidation were first generated by a 10-year deal with Titan Sports, the parent company of [Page 335]the World Wrestling Federation (now the WWE), for a line of action figures based on wrestling personalities.

The wrestling toys were meant to be for the 1990s and 2000s what the smaller, cartoon- and comic-book-driven G.I. Joe toys had been for the 1980s. In 1997, two years after the company's founding, JAKKS acquired two manufacturers of die-cast cars: Remco and Road Champs (acquired in emulation of Mattel, owner of the Hot Wheels brand). The toddler toy line Child Guidance was soon acquired as well, to compete with Mattel's Fisher-Price toys and Hasbro's Playskool.

JAKKS operated with a small corporate staff and only a dozen American warehouse personnel, conducting its manufacturing and most of its warehouse activities in labor-cheap Asia. The WWF action figures rose in popularity, and by the end of the decade the company had acquired Berk, an educational toy company with licenses from Disney, Nickelodeon, and Sesame Street. More licensed products followed, with the acquisition of Flying Colors, maker of Looney Toons lunchboxes and Harry Potter art supplies. Fortune magazine named JAKKS one of the 100 fastest-growing companies in its 1999 overview.

...