Lionel Announces An End To Marketing K-Line Products
Published:
August 25, 2010
Lionel LLC has announced that the end of 2010 will also mark the end of Lionel’s marketing of K-Line-branded products.
“It’s something we tried for three years, and we gave it a pretty good shot,” said Jerry Calabrese, Lionel’s chief executive officer.
In an interview with Classic Toy Trains, Calabrese said K-Line had a good following and clever products, but ultimately Lionel could not make the numbers work for its value-priced line and needed to focus its time and energy on areas with more growth potential.
For example, Lionel recently entered into an agreement with NASCAR Teams Licensing Trust to make die-cast metal replica race cars. Calabrese said the combination of Lionel’s established brand and the enthusiastic NASCAR fan base make this an especially exciting opportunity.
Shake-up in China
Most of the K-Line tooling, including that used for the SuperStreets system, is owned by Chinese contract manufacturer Sanda Kan, which recently announced its own shake-up.
In mid-summer, Sanda Kan sent letters to a number of its customers worldwide, telling them it will no longer be able to make products for them.
According to trade publication Model Retailer, customers receiving letters from Sanda Kan included Weaver, S-Helper Service, and American Models.
Among those not getting letters were Bachmann, Atlas O, Wm. K. Walthers, and Aristo-Craft.
Kader Holdings, which purchased Sanda Kan in 2008, is also the parent company for Bachmann.
Some companies have already moved their production to other firms.
Sanda Kan’s move is widely seen as an effort to focus production capacity on its biggest customers. Sanda Kan also makes slot cars and other products.
Customers can expect delays while companies seek new manufacturers.
Adding to the uncertainty in China is a 21 percent rise in the nation’s minimum wage. Importers say they’re not sure what effect it will have on prices.
Sanda Kan has not commented on the future of its K-Line tooling.
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