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Mattel to manufacture Thomas the Tank toys

January 9, 2013

LOS ANGELES — One of the oldest preschool entertainment and toy franchises, Thomas the Tank Engine, is about to get a new marketing push.

Will parents get on board?

Mattel agreed last year to pay a hefty $680 million for Hit Entertainment, the British owner of Thomas, a cheery blue locomotive first introduced in a 1946 book. Starting this month, the toy manufacturer hopes to turn the talking train and his friends — Butch the Tow Truck, Engine Emily — into a property on par with Hot Wheels and Barbie.

''It's been a brand that has been pretty bereft of investment," said David Allmark, executive vice president of Mattel's Fisher-Price brands. "We really believe that we can grow this on a worldwide basis, particularly in Latin America and Asia."

Thomas is hugely popular, with global retail sales totaling about $1 billion annually, according to analysts. Barbie has annual worldwide retail sales of $2 billion, while Hot Wheels is closer to $1 billion. Hot Wheels, however, has stronger brand recognition in North America than Thomas and is a better seller in the toy aisle.

''An established brand like Thomas helps Mattel, which has historically been stronger with girls than boys, in the extraordinarily competitive preschool market," said Marty Brochstein, senior vice president for industry relations and information at the International Licensing Industry Merchandisers' Association. "It is much more expensive and tenuous to try and create a franchise from scratch."

Still, expansion of the Thomas franchise in Europe and North America is difficult because of gender and age constraints. Analysts say the character appeals to both boys and girls ages 1 to 3, but then girls tend to split off into dolls and dress-up; boys stick around until age 5, then lean toward more complicated toys and stories.

The effort to reposition Thomas includes new toys, in particular an expanded and enhanced line of wooden trains, and a new one-hour animated movie called "King of the Railway," which will be released in the spring on DVD by Lionsgate and supported with "blue carpet" premieres in the United States and Europe. Mattel will also produce at least three more seasons of the "Thomas & Friends" television series, shown on PBS and Sprout.

Allmark said the chubby-cheeked Thomas — which was created by a British clergyman named Wilbert Awdry while trying to soothe his son, Christopher, who was sick with the measles — will continue to espouse "innocent, sweet life lessons." But Allmark added that Mattel thinks a few minor changes — faster storytelling, for instance — can make the anthropomorphic train more relevant to modern children. "Some of it needs livening up a little bit," he said.

Devotees who like Thomas for his simplicity may find those to be fighting words, but Mattel and its new Hit unit plan to back up their efforts with a multimillion-dollar advertising campaign called "Anytime Is Thomas Time." Plans also call for a new online portal devoted to Thomas, more live events (look-alike trains steaming into cities across North America), and possibly a balloon in the next Macy's Thanksgiving parade.

''When you are successful for as long as Thomas has been, you can become part of the woodwork," said Shari Donnenfeld, head of Hit Global Brands. "We need to reinforce the brand by reminding people why they love it and introducing new content."

Besides Mattel, multiple entertainment companies, including Walt Disney, weighed Hit's prospects but passed, deciding that Thomas came with too many downsides, given the asking price. TV episodes and movies are expensive to produce, for instance, and DVDs do not sell the way they used to.

Mattel needed a preschool franchise to reinforce its Fisher-Price business, analysts say. Last year the division lost an important Sesame Street license to a rival, Hasbro, and is coming off a few difficult years marked by recalls, including the removal from shelves of 10 million Fisher-Price toys in 2010. Last year, worldwide Fisher-Price sales totaled $2.16 billion, a 3 percent decline from a year earlier.

Allmark called Hit, which also owns characters like Barney, Angelina Ballerina and Bob the Builder, "a pretty rare diamond."

Thomas has been a brand in flux in recent years. In 2009, Hit dropped the old-fashioned animation style that had been the TV program's hallmark in favor of computer-generated images. The trains also began to speak on the televised show for the first time. The changes risked alienating some parents, but ratings in certain important demographics have increased 30 percent, according to Nielsen data.

Computerized animation has also allowed Hit to expand Thomas deeper into the digital realm; there are 15 related apps, for instance, and Mattel plans to introduce four more in the coming months.

Thomas faces challengers in the hotly competitive preschool market. Disney is planning an increased retail push tied to its "Jake and the Never Land Pirates" program. But retailers like Toys R Us note that Mattel and its Fisher-Price unit have the muscle to secure expanded shelf space for Thomas and his friends.

''Fisher-Price brings extraordinary product development, but they also have an unbelievable marketing machine," said Richard Barry, chief merchandising officer for Toys R Us. "Thomas is a brand that we absolutely love."

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