geobra Brandstätter GmbH & Co. KG - Company Profile, Information, Business Description, History, Background Information on geobra Brandstätter GmbH & Co. KG



Brandstätterstrasse 2-10
D-90513 Zirndorf
Germany

Company Perspectives:

For all these years, the courage to take new paths has been part of the company's basic philosophy. This courage, together with the willingness to invest, are the keys for guaranteeing the employees' existence, a stable partnership with retailers and consumers as well as the company's general security for the years to come.

History of geobra Brandstätter GmbH & Co. KG

Geobra Brandstätter GmbH & Co. KG is Germany's number one toy maker. It's main product, the Playmobil series of plastic toys for children ages three to ten, accounts for almost 90 percent of the company's total sales, about 63 percent of which come from abroad. Besides geobra Brandstätter's production plant in Germany the company has production facilities on the island of Malta and in Spain, and maintains Playmobil sales offices in eight western European countries as well as in the United States and Canada. The geobra Brandstätter group also includes mold making specialist brandform and software company Hob electronic with subsidiaries in the United States, Austria, and Benelux. The company founder's great-grandson Horst Brandstätter controls and owns the company.

1876-1939: From Strong Box Locks to Piggy Banks

In 1876, master locksmith Andreas Brandstätter founded his own workshop in the German town Fürth in Bavaria. Together with his six apprentices he started making metal ornamental fittings and locks for strong boxes. A quarter of a century later, in 1908, his son Georg took over the family business. He renamed the company Metallwarenfabrik Georg Brandstätter, moved the business to a new location in Fürth and started the industrial manufacturing of metal products. In 1921, the company moved to the neighboring town Zirndorf which remained its headquarters for the years to come. Five years later the company was officially registered as an "Offene Handelsgesellschaft," the legal form of a private company that traded goods. Its purpose was registered as "the manufacture of hardware and toys and the trade therewith." In 1927, three new owners entered the family business: Georg Brandstätter's two sons Karl and Richard and his son-in-law Karl Bauer. After Georg Brandstätter's death in 1935 his widow Kunigunde also became a co-owner.

In the 1930s the company started using the name geobra, an acronym derived from the owner's name--Geo-rg Bra-ndstätter. One of the company's product lines was toys made from sheet metal. A catalogue from 1939 offered a variety of miniature scales with tiny weights, cash registers, as well as wrapping paper and pencil holders--all the necessary items for children to play "store." The geobra toy line also included metal piggy banks in the form of cash boxes or cash registers, which automatically calculated money added to the box and was available in different currencies. Another line of toys included a variety of toy telephones and do-it-yourself construction sets for telephones, field telephones and a Morse code device with buzzers and flashing lights. Geobra also sold electrical tool boxes for do-it-yourself hobbyists for electric bell and light installations and additional accessories such as high and low-current electric motors and dynamo machines. The eclectic selection of geobra products also included electric irons, microscopes, globes, and model planes.

1940-69: From Hula Hoops to Water Skis

After World War II, the fourth family generation moved into management positions. Dr. Karl Brandstätter was killed in World War II in 1940, leaving his seven-year old son Horst behind. After Karl Bauer's death his son Hubert became a personally liable co-owner of geobra Brandstätter in 1952. Horst Brandstätter joined the company in the same year at age 19. After his father had died, all that Horst Brandstätter had was a contract that he would become a co-owner of the company at age 21. At that time the company was managed by his uncles Richard Brandstätter and Karl Bauer and his cousin Hubert Bauer who were not interested in sharing the power with Horst. However, within a short time Horst Brandstätter managed to take on more and more responsibilities, simply by offering his help whenever he could. After Richard Brandstätter's death in 1964, his son Michael became a co-owner and managed geobra Brandstätter's fiberline subsidiary which manufactured motor boats and water skis, until he sold his share in 1975. After Hubert Bauer retired from geobra Brandstätter management in 1985, Horst Brandstätter became the company's sole Executive Director.

Horst Brandstätter, who had learned the mold-making craft as an apprentice, focused the company's production on a new material that started replacing metal in several areas--plastic. Beginning in 1958 geobra Brandstätter started working on its first major success when the hula hoop wave swept over to Europe from the United States. Horst Brandstätter, who besides his technical skills also had a healthy sense for business opportunities, worked day and night for two weeks on designing a machine that was able to make hoops out of plastic hoses. For the merely two years that the boom lasted, the company was showered with cash. The broadened capital base was used to expand the company's range of plastic products. Horst Brandstätter further developed the technology he had used to make the plastic hoops, where a plastic hose was heated up inside a machine and molded into a certain shape by using air pressure. Knowing how to make bottles, Brandstätter refined this process to make irregularly shaped things in a single production step. The company also started producing plastic toy racing cars and tractors with pedals on which kids could ride. Another trend of the reconstruction period was piggy banks, which were manufactured around the clock by an automated process. On Monday mornings, 100,000 piggy banks which had been produced solely by machines over the weekend, were ready for sale. Besides items made from plastic, the company also ventured into electronics such as turntables and intercoms. When competitors started copying geobra products and selling them for less, Horst Brandstätter decided to make larger plastic products. A new technology using a blowing agent that worked much like baking soda allowed the production of such products with thick walls, but without cavities. After considerable investments in new machinery geobra Brandstätter started making floor and ceiling tiles, children's desks and scooters, hockey sticks, tennis rackets and water skis as well as larger items such as sports boats and oil tanks--all made from plastic. In 1969, the company set up a state-of-the-art production facility and warehouse at a second location in Dietenhofen in Mittelfranken.

1970-76: From geobra to Playmobil

At the onset of the 1970s, geobra Brandstätter was under attack by competitors in the Far East, Italy, and Yugoslavia, who copied the company's products and sold them at lower prices. In 1971, the company started establishing a new production facility on the Mediterranean island of Malta. According to the country's custom, the government set up a building and rented it to the company at a reasonable price. Wages on Malta were only one third of German wages, but most of all, Malta was just around the corner compared with the Far East. However, in addition to competitive pressure the first "oil shock" of the early 1970s pushed up prices for raw plastic significantly. Before the crisis hit the market, the company purchased its major raw material for about DM 0.80 per kilogram which rose to over DM 5 at its peak. Moreover, vendors were not able to deliver the high amounts of raw plastic needed to manufacture geobra products. As a result, the company slipped deeply into the red and was confronted with a situation that threatened its very existence.

However, the innovation that would save geobra Brandstätter was already in the works. In 1971, Horst Brandstätter had asked his master mold-maker and chief developer Hans Beck to create something new: a toy system, perhaps a series of vehicles, perhaps with some simple figurines sitting in them which might later be followed up with a matching garage. Beck, who showed a passion for designing toys early on, when he watched his brothers and sisters playing and started making toys for them, had been hired by Horst Brandstätter in 1958. Brandstätter's requirements for the new product line included the sparing use of plastic material, a small size so it would take up little space in production facilities and warehouses, and a basic idea that was expandable into a whole system in order to extend its life cycle. Beck came up with little plastic figurines, about three inches tall, with movable heads, arms and legs, and an irresistibly sympathetic smile and appeal. When the International Toy Fair approached at the beginning of 1974, Brandstätter asked Beck if he could pull off a model series in time for the upcoming trade show, which he did. However, when the first brightly colored model figurines branded Playmobil--plastic Indians, knights, and construction workers--were displayed at the Toy Fair, nobody seemed to be interested. The idea was too far out from what toy industry representatives had known and seen before.



The only exception was Hermann Simon, a Dutch businessman and the largest toy wholesaler in Europe. He foresaw the huge potential that Playmobil had and--one day before the trade show closed--placed an order worth DM 1 million. Horst Brandstätter used this opportunity to further stir up the demand. At the trade show's closing festivities he approached the director of Vedes Vereinigung der Spielwaren-Fachgeschäfte, Germany's largest wholesale organization for toys, told him about the DM 1 million deal and offered him the exclusive rights to sell Playmobil in Germany. Finally, he wrote letters to big German department stores and told them that Vedes had showed an interest in exclusively selling the newly developed toy system his company had developed. Soon after, orders from department stores that were concerned about missing a new trend started coming in.

The additional orders were a huge challenge since only the first order worth DM 1 million in Playmobil figurines was enough to occupy the company's complete production capacity. When during the year orders mounted up to three times that figure, and machine building companies needed more than a year to deliver the desperately needed plastic molding machines, Horst Brandstätter started shopping around for used ones, picking them up wherever a company was willing to sell. Finally, the company managed to produce 3.5 million Playmobil figures worth about DM 3 million, but orders kept pouring in. In 1976, geobra Brandstätter made another big investment to boost production capacity. As a result, the company's net sales doubled again as they had the year before, from DM 24 million in 1974 to DM 44 million in 1975, reaching over DM 100 million in 1976. Within only a few years, geobra Brandstätter became Germany's largest toy manufacturer.

1977-2000: From Mini Skirts to Space Suits

In the beginning, there were only male Playmobil figures. After two years the first female ones were introduced which--according to the fashion trend of the time--were wearing mini skirts. Unlike most other toys, the main focus of the Playmobil system were not so much things, but rather little plastic people. Their hands were designed so they could grab a tool or sword; their heads and arms could move; they were able to bend down, sit, or stand; and they could be equipped with various accessories such as hats or helmets, vests or coats. In 1981, Playmobil adults were joined by Playmobil kids and babies. Geobra Brandstätter's engineers put a great deal of energy into refining the plastic molding technology used to make the little figures. Pioneering the field, they made it possible to combine four different components of raw material in one production step. As a result, a brown monkey with a movable head, arms and legs and rosy cheeks could be made in a single step--no additional assembly necessary. Refined technologies made it possible to create even more sophisticated characters. In the beginning, the unmistakable Playmobil smile was printed onto the round heads. Later it became possible to mold them directly into the plastic. The first Playmobil figures' arms and hands were molded into one piece. From 1982 on, their tiny hands could be turned. Playmobil men grew bellies and beards; women switched from minis to long skirts and pants.

Around the figures, Playmobil developers and designers created whole worlds for them to dwell and move around in. The pirate ships and knight castles of the early years were soon followed by anything imaginable: medieval towns and fairy tale castles; jungle ruins and treasure caves; modern and farm houses; police station and dentists offices. Other popular themes included foreign countries, the circus, the zoo, railroads, and sports settings. By 1999, the Playmobil product line included figures in about 500 variations and more than 10,000 single parts. To limit the space needed at toy retailers, geobra Brandstätter eliminated as many models each year as were newly introduced. Many of the West German children who grew up with Playmobil later turned into eager collectors or introduced their own kids into the colorful plastic world. Furthermore, the figures with the irresistible smile made their way into doctor's offices, galleries, and museums.

During the 1980s geobra Brandstätter established sales offices abroad to more efficiently market Playmobil outside of Germany. Starting with the first two in the United Kingdom in 1980 and in France in 1981, they were followed by foreign subsidiaries in Benelux, Greece, the United States, and Canada. During the 1990s sales offices were also set up in Italy, Austria, and Switzerland. Although the company was able to grow significantly against the downwards industry trend, foreign sales, which accounted for roughly 60 percent of the total, fluctuated heavily during the 1990s. On the other hand, the refined technologies that made more detailed characters possible pushed production costs up.

The 1990s brought about some changes for geobra Brandstätter. Up until then, Horst Brandstätter did not think much of advertising campaigns, since Playmobil toys seemed to sell all by themselves. During the 1980s, the company had successfully prevented Playmobil from being copied by German competitors. However, with globalization shifting to a higher gear, foreign competitors with enormous advertising budgets were taking over market share. On top of that, when West and East Germany re-united in 1990, East German consumers did not buy as many Playmobil products as geobra Brandstätter expected. In response the company launched a DM 12 million advertising campaign which was expanded in the following years, but never reached the expenditures of other brand name toy manufacturers. When Playmobil started losing ground to computer-based games and licensed articles from Hollywood movies such as Godzilla or Star Wars and TV series like The Simpsons, geobra Brandstätter loosened its rigid product philosophy. Technical effects such as blinking lights, battery-powered functions, and sounds were not taboo anymore and the first Playmobil space station with astronauts was introduced in 1999. To reach its potential customers at the earliest age, the Playmobil line of baby toys for one to three year olds first introduced in 1990 was expanded. Another measure was the introduction of so called "starter kits," figures and sets that were priced very modestly. While the company still refused to jump on every trend--such as the dinosaur wave--and to include any figures or worlds that featured violence, it did open up to interactive CD-ROMs and licensing the Playmobil brand to other manufacturers. To draw further attention to the Playmobil brand geobra Brandstätter opened so-called FunParks during the second half of the 1990s, two of them in Florida, and four in Europe, including Paris, Athens, Malta, and finally one in Zirndorf in 2000. In that year, the company also opened its Playmobil online shop.

For Horst Brandstätter the 1990s were the time to think about and prepare his company for the future. In 1990, he and his employees moved to the new headquarters after the business had outgrown the capacity of the old location. The brand-new futuristic building which also included a health club with two full-time fitness trainers was set up on a hill because the CEO thought it would boost his workforce's productivity if they were able to see the horizon. Brandstätter's main challenge was to strengthen the Playmobil brand in an increasingly difficult market: the number of potential customers was declining due to decreasing birth rates; the market for traditional toys was shrinking worldwide and becoming more dependent on short-term trends; the company's main customer group--boys up to age ten--were increasingly switching to electronic toys and computer-based games; and the mid-sized company was competing against a number of--mainly American and Japanese--global players. Horst Brandstätter's main hope was the American market--the biggest toy market in the world. A major breakthrough occurred when Playmobil was listed by American retail chain Target. Since the early 1990s, Horst Brandstätter tried to gradually withdraw from his job, spending half of each year in Florida while exchanging faxes daily with his German office. During his absence, the company was managed by two executives. After his disappointing experience implanting managers from outside the company, he appointed 42-year old Andrea Schauer one of the two executive directors. Schauer had joined the Playmobil marketing team in the early 1990s. Brandstätter's two sons had other plans. Klaus Brandstätter was managing his own company HOB Electronic which transitioned from manufacturing peripheral equipment for IBM computers to developing software for computer networks. Conny Brandstätter was working on an innovative product line of self-watering plastic planter pots in a separate geobra division. In 1996, Brandstätter established Stiftung Kinderförderung von Playmobil, a non-profit foundation with the goal to promote a violence-free childhood. The foundation had been named to inherit a major portion of the geobra Brandstätter shares.

Principal Subsidiaries: PLAYMOBIL Malta Ltd.; PLAYMOBIL S.A. (Spain); PLAYMOBIL France S.A.R.L.; PLAYMOBIL Austria GmbH; PLAYMOBIL Swiss GmbH; PLAYMOBIL Benelux B.V. (99%); PLAYMOBIL U.K. Ltd.; PLAYMOBIL Italia S.R.L. (95%); PLAYMOBIL Hellas S.A. (Greece); PLAYMOBIL USA Inc.; PLAYMOBIL Canada Inc. (65%).

Principal Competitors: Hasbro, Inc.; LEGO Company; Mattel, Inc.

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