Spin Master, the company behind the Etch A Sketch and Paw Patrol brands, has agreed to acquire Rubik’s Brand for about $US50 million ($70 million), tying together two of the world’s most iconic toy brands.
The merger comes at a boom time for classic toymakers, as parents turn to familiar products to entertain kids stuck in lockdown. Like sales of Uno, Monopoly and Barbie dolls, Rubik’s Cube purchases have spiked during the pandemic, according to the puzzle maker’s chief executive officer, Christoph Bettin. He expects sales to jump 15 per cent to 20 per cent in 2020, compared with a normal year, when people purchase between 5 million and 10 million cubes.
By acquiring Rubik’s, Toronto-based Spin Master can better compete with its larger rivals, Hasbro and Mattel. All three companies have pivoted to become less reliant on actual product sales, diversifying into television shows, films and broader entertainment properties based on their toys. Spin Master CEO Anton Rabie said he wouldn’t rule out films or TV shows based on Rubik’s Cubes, but he was focused for now on creating more cube-solving competitions and crossmarketing it with the company’s other products, like the Perplexus.
“Whoever you are, it really has a broad appeal from a consumer standpoint,” Rabie said in an interview. “It’s actually going to become the crown jewel; it will be the most important part of our portfolio worldwide.”
Hungarian inventor Erno Rubik created the Rubik’s Cube in 1974, a solid block featuring squares with coloured stickers that users could twist and turn without it falling apart. It gained popularity in the 1980s and has remained one of the best-selling toys of all time, spawning spinoff versions, international competitions of puzzle solvers, books and documentaries.
The toy has been particularly well-suited to pandemic conditions. During lockdowns, parents have sought to give kids puzzles that boost problem-solving skills useful in math and science careers. Normally, toys tied to major film franchises are among the most popular products headed into the holidays, but studios have delayed the release of major new movies because of coronavirus. So classic products are experiencing a mini-renaissance.
“The whole pandemic has really increased games and puzzles,” Rabie said. “But whether the pandemic existed or didn’t exist, we’d still buy Rubik’s. It’s had such steady sales for decades.”
Rubik’s CEO Bettin said it was the right time to sell the company, with the founding families behind it ready to move on. London-based Rubik’s Brand was formed out of a partnership between Erno Rubik and the late entrepreneur Tom Kremer, while private equity firm Bancroft Investment holds a minority stake in the company.
Early on, Bettin felt Spin Master was the right home for the puzzle toy, he said. Spin Master, which was started by a group of three friends in 1994, has expanded through the purchase of well-known brands, including Erector sets and Etch A Sketch. Rabie says he works to honour the “legacy” of those products, which Bettin cited as a key reason to sell the brand to Spin Master over larger companies that were interested.
“It was important for us to not be lost in the crowd, and to be sufficiently important and cared for,” Bettin said. “And there’s a balance between being with someone large enough to invest, and agile enough to ensure you are key part of their plans.”
Spin Master won’t own Rubik’s Cubes in time for the holiday season — the transaction is expected to close on January 4. At that time, the company will move Rubik’s operations from a small office in London’s Notting Hill neighbourhood to Spin Master’s new games operations centre in Long Island.
Some of Rubik’s Brand’s 10 employees will be part of the transition, but they won’t stay permanently, Bettin said.
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