Remember Magnetix, those magnetic toys that were the subject of a series of major recalls, culminating in a $1.1 million fine against manufacturer Mega Brands for not disclosing the deadly risk that those tiny magnets posed to children? The family-run Canadian company is trying to make a comeback, positioning a new series of Halo-themed toys against Lego’s popular Star Wars products. At a recent toy fair, the company even brought along an actor dressed up as Halo hero Master Chief to hawk their wares (no, we didn’t get to peek under his helmet).
But Mega, which was best known for its Lego-like Mega Bloks before it acquired Magnetix-maker Rose Art, faces odds of approximately 3,720 to 1 of besting its larger adversary. The once-successful company is now laboring under a debt load of almost $400 million, and has been trying to sell off the non-Magnetix remains of Rose Art for over a year. The Globe and Mail lays out the state of the epic battle with analysis from onlookers like Scotia Capital’s Anthony Zicha:
“It’s a really sad story,” says Zicha. … “There’s always a chance it will survive, but the likelihood is not great.” In the toy business, says Zicha, “you have to have consumer confidence. If you break the relationship between the consumer and the retailer, you’re pretty much done.” Mega broke that rule, and it may pay with its life.
As much as we’d like to think that John-117 is up to it, he may just be backing the wrong side in this battle.
The Empire Strikes Back [Globe and Mail]