The Ohio Art Company - Company Profile, Information, Business Description, History, Background Information on The Ohio Art Company

One Toy Street
Bryan, Ohio 43506

History of The Ohio Art Company

Headquartered in a small northwest Ohio town, The Ohio Art Company is best known for its classic toy, the Etch A Sketch. In stark contrast to the faddish toys that crowded the toy market during the late 20th century, the company's flagship product had endured 35 years, sold over 100 million units, and appealed to children in 65 countries worldwide. By the early 1990s the Etch A Sketch was manufactured in five countries and sold in 67 nations around the world. One of the oldest toymakers in the United States, Ohio Art manufactured about 200 other basic toys in the early 1990s. The company's slogan, "Making Creativity Fun," emphasized its focus on art- and craft-oriented toys. And though toys generated the majority of Ohio Art's annual sales, industrial components contributed about one-fourth of revenues in the early 1990s. After reaching an anticyclical peak of $56.93 million in 1992, Ohio Art's sales declined by over 25 percent to $41.07 million in 1994. Profits eroded even faster, by over three-fourths, from $3.44 million to $824,000 during the same period. Nevertheless, the sparsely traded company has never failed to pay an annual dividend.

Ohio Art traces its history to the first decade of the 20th century, when Henry Simon Winzeler made a dramatic career change. Trained as a dentist, Winzeler opened a private practice in the tiny town of Archbold, Ohio, in 1900. Inspired by an oval mirror in his aunt's clothing store, Winzeler decided to start manufacturing oval picture frames. With $300 borrowed from friends, Winzeler made preparations to begin production in a rented hall. He sold the dental office in 1908 and opened a grocery, using the market's profits to buy equipment for the frame business. He continued to operate his "Hub Grocery" through early 1909.

Winzeler launched The Ohio Art Company in October 1908 with 15 employees. For the first two years, his oval metal frames were stamped in Toledo, then painted on-site in Archbold. In 1910 Winzeler bought his own stamping machine and consolidated production.

Sold primarily through the new breed of mass marketers like Woolworth's, Kresge's, and Sears, Roebuck & Co., Ohio Art's framed pieces featured religious scenes, still lifes, and landscapes. Within just two years production had expanded to 20,000 units each day. The company's most popular view featured a pair of cupids, one asleep, one awake. The Cupid images were copyrighted by Taber-Prand Company, and Ohio Art paid a royalty on each set. Ohio Art's 75th anniversary publication noted that "Winzeler offered $100,000 for the rights to these pictures, but his offer was rejected. In 1938, Taber-Prand went into bankruptcy and Winzeler's son, Howie, bought the rights for $10." Company figures estimated that over 50 million of the cupid sets were sold, meaning that the decoration graced over one-half of all homes in the early 20th century.

Rising demand spurred moves to progressively larger plants, until Ohio Art moved to the town of Bryan and a specially built plant in 1915. The addition of lithography equipment that same year expanded the company's capabilities. Ohio Art diversified cautiously at first, lithographing wood-grain finishes on its traditional metal frames. This product line grew to include advertising signage and scale faces.

Ohio Art also expanded through acquisition during this period. The 1916 purchase of Chicago's Holabird Manufacturing Company broadened the product line to include glass-framed calendars featuring popular Ohio Art prints.

The onset of World War I in 1914 interrupted toy imports from Germany and afforded domestic toymakers the opportunity to fill the void. In 1917 Ohio Art acquired both the C. E. Carter Company's Erie toy plant and the Battle Creek Toy Manufacturing Company. During this period, Ohio Art began making the lithographed metal windmills, sand pails, toy cars, wagons, circus trains, spinning tops, and drum sets that would be mainstays throughout the 20th century. The company honed its lithography skills with the production of metal tea sets that featured detailed depictions of nursery rhymes, alphabets, animals, and children's stories.

In 1927 H. S. Winzeler retired from Ohio Art to concentrate on his West Coast businesses. Although Winzeler continued to own the company, Lachlan M. ("Mac") MacDonald succeeded Winzeler as president and directed Ohio Art's 1930 incorporation. About 20 percent of the company's equity was sold to the public at that time, but the Winzelers retained a controlling stake. Fifteen-year-old son Howard W. ("Howie") Winzeler started working part-time at Ohio Art in 1930 and joined the firm full-time three years later.

Ohio Art maintained its fiscal strength throughout the Great Depression and was even able to acquire several other companies hobbled by the crisis. In 1930 alone the company bought out four firms: Mutual Novelty Manufacturing Company in Chicago, a producer of artificial icicles for decorating Christmas trees; Veelo Manufacturing Company, maker of dolls and stuffed animals; Delta Products, a manufacturer of electric appliances and car parts; and Household Appliance Manufacturing Company, a maker of clothes dryers. Craftsman Studios, a manufacturer of brass and copper tableware, was acquired in 1931. Two printing companies, Kenyon Company, Inc., and Detroit Publishing Company, were purchased the following year. When H. S. Winzeler died in 1939 Howie was appointed to fill the vacant seat on the board of directors. By the end of the year, he had also advanced to vice-president.

During World War II, when virtually all domestic production was harnessed for the war effort, even toymakers like Ohio Art were called upon to manufacture strategic products. The tiny northwest Ohio firm made parts for rockets, bombs, and aircraft throughout the war, and its contributions earned an "Excellence" award at war's end.

When Ohio Art resumed toymaking in the postwar era, it began using new plastics to make its traditional toys. Metal dollhouses featured plastic furniture, and tea sets, sand pails, and farm sets reappeared in plastic.

H. W. Winzeler, who advanced to Ohio Art's presidency in 1953, encountered what would become the company's flagship product at a European toy fair in 1959. That's when France's Arthur Granjean pitched his "L'Ecran Magique" ("magic writer") to the chief executive officer. Winzeler was reluctant to pay the apparently steep price Granjean demanded to license the product but bought the rights after a second presentation later that year.

Renamed the Etch A Sketch, the toy featured a glass "window" enclosed in a red plastic frame. A combination of aluminum powder and plastic pellets inside the window made it look like a flat gray screen. Young sketchers could create line images by turning the white knobs on the left and right of the screen, which, by a series of internal strings and pulleys, controlled the horizontal and vertical movement of a stylus that scraped the aluminum powder from the back of the glass, leaving a thin black line. To erase a drawing and start over, the sketcher simply turned the toy on its face and shook, coating the glass with a new film of aluminum powder.

Ohio Art launched the toy in time for the 1960 holiday season and supported Etch A Sketch (which itself resembled a television) with its first televised advertising campaign. With seals of approval from Good Housekeeping and Parents magazines, the Etch A Sketch soon became a toy store mainstay. Sears, Roebuck & Co. alone sold 10 million of the toys from 1960 to 1970.

Not content to rest, Ohio Art balanced the toy market's seasonally cyclical sales with the incorporation of Strydel, Inc., in 1962. Strydel applied Ohio Art's injection molding, lithography, and metal stamping capabilities to the production of metal and plastic industrial components like auto trim, film canisters, and reproductions of classic metal signs and trays, mostly premiums for Coca-Cola. Ohio Art was eventually producing 500 lithographed designs. In 1968 Ohio Art acquired Trinc Company, a truck leasing firm formerly owned by Ohio Art executives, and a controlling interest in Emenee Corporation, a manufacturer of toy musical instruments.

The founding Winzeler family sold its controlling stake in Ohio Art to William Casley Killgallon in 1977. The Winzelers had drawn Killgallon from a rival toy company to become sales manager in 1955. He advanced to a seat on the board within two years and was elected president in 1966 and board chairman in 1978. William Killgallon was joined by his son Bill (William Carpenter) in 1968; Bill succeeded his father as president and chief executive officer in 1978 and was joined at the company by his brother, Martin ("Larry") Killgallon. They consolidated Ohio Art's peripheral businesses as the diversified Products Division in 1978.

Although Ohio Art had utilized licensed characters to make its products more attractive and recognizable to children and parents since the late 1920s, licensing efforts intensified dramatically during the 1980s. Ohio Art continued to license perennially popular Disney characters--even offering an Etch A Sketch in the shape of Mickey Mouse&mdash well as trendy animated figures like Smurfs and Pac-Man. The company also introduced the Lil' Sport line of scaled-down basketball, baseball, and soccer toys during the late 1970s and early 1980s.

Ohio Art launched Etch A Sketch spin-offs during the 1980s, including plastic overlays with drawing games and puzzles, as well as travel and pocket Etch A Sketch models. The company's efforts to parlay its long-running (yet only moderately profitable) Etch A Sketch franchise culminated in the 1986 launch of the Etch A Sketch Animator. This electronic version of the classic toy could store several drawings at a time and play them back, effecting animation. At a retail price of about $50, the Animator was one of Ohio Art's most expensive offerings. The company's sales jumped 50 percent from about $31.3 million in 1985 to $47 million in 1986, and its profits quintupled to $2.5 million. However, those high-flying results came back to earth in the ensuing years, when competition from video games battered Animator sales. Ohio Art lost $3 million in 1989 and 1990 and finally ceased production of the Animator.

In a more low-tech vein, Ohio Art launched a color Etch A Sketch in 1993 that used the traditional two-knob drawing method but featured six colors and produced a color copy of each drawing. In honor of the toy's 35th birthday in 1995, Ohio Art introduced pocket models in jewel tones.

Ironically, the recession of the early 1990s helped Ohio Art to a certain degree, as many of its toys retailed for less than $20 and thus appealed to budget-conscious parents. Art, craft, and educational toys offered to "Make Creativity Fun." Sales and profits peaked at $56.93 million and $3.44 million in 1992. But as the United States slowly emerged from recession, Ohio Art's results headed downward again. Sales declined by over 25 percent to $41.07 million in 1994, and profits dropped by over three-fourths to $824,000 during the same period. The Killgallons, who continued to own a controlling interest in the company in the early 1990s, worked to regain Ohio Art's luster, reducing the workforce by about 15 percent, cutting inventory levels, and achieving efficiencies in administrative areas.

Principal Subsidiaries: Strydel, Inc.; Trinc Co.

Additional Details

Further Reference

A 75 Year Headstart on Tomorrow, 1908--1983: The Ohio Art Company, Bryan, Ohio: Ohio Art Co., 1983.Brown, Paul, "Staying Power," Forbes, March 26, 1984, p. 186.Cropper, Carol, "Etch a Mickey," Forbes, March 30, 1992, p. 14.Grimm, Matthew, "U.S. Toy Makers Invade the Eastern Bloc," Adweek's Marketing Week, June 4, 1990, p. 4."Lego Wars: A Christmas Tale," Newsweek, December 28, 1987, p. 40."Ohio Art Sparks Creativity with Its Scope Activity Toys," Playthings, February 1993, p. 140.Salas, Teresa, "Manufacturers Plot to Tackle Toy Troubles," Playthings, February 1991, p. 66.Slutsker, Gary, "Etch a Future," Forbes, March 23, 1987, p. 72.

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