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Making toys to treasure

The Baltimore Sun

HACKENSACK, N.J.-- Patrick Calello has crafted consumer products ranging from detergent bottles to high-end speakers for home theaters. Now he has designs on something bigger: changing the toy industry. Calello is hoping that a toy he invented - Automoblox - will spark a movement away from disposable plastic toys and a return to toys that can be passed down for generations.

His idea is also driving sales at specialty toy stores around the country, and could be a vehicle for turning a Wharton, N.J.-based company into a major player in the toy industry. That sector has struggled until recently. U.S. toy sales increased 0.3 percent last year, reversing a decline from a year earlier, according to market research firm NPD Group Inc.

Automoblox, the company founded to sell the cars made out of wooden building blocks that Calello created, sold about 140,000 of the toys last year, Chief Executive Officer Joe Barrett said. Though the privately held company doesn't reveal its revenues, that adds up to $4.9 million spent on Automoblox in 2006 (at a retail price of $35 per car).

The toys are sold at some Learning Express stores, at other specialty toy shops and at some museum stores. They consist of wooden blocks, wheels and assorted plastic parts that can be assembled and reassembled to create different kinds of cars.

Mary Diaz, manager of the Learning Express store in Englewood, N.J., said the cars sold out over the holidays and that the shop is now selling its third shipment of the toys. "And none of them have been returned - which is a very good thing," Diaz said.

"We like to say this is the reinvention of the classic wooden car," Calello said. "What we really wanted to do is bring great styling, craftsmanship and heirloom quality to children.Essentially, what we're combating is the disposability of the mass toy industry."

"The mass-market toy market is all about flash, bells and whistles, noises and distraction. And we're trying to bring substance and quality and real learning benefits," he said.

Children, Calello believes, will learn to take care of their toys if you give them something worth taking care of.

'A bad message'

"Your typical mass-market toy, usually the box is more exciting than the toy," he said. "It's typical to get a Christmas or Hanukkah present and by spring it's already in the garage sale. I think it's a bad message to give kids that the world is disposable."

The father of a 4-year-old, Calello says: "I'd rather my daughter have five wonderful, delightful toys that are really engaging and have real value than 50 disposable, Happy Meal-style toys."

Calello, a graduate of Carnegie Mellon University in Pittsburgh, is an industrial designer who first had an idea for a high-quality toy car made of wood in 1992 while in college. He kept the idea in the back of his mind while pursuing a career in industrial design that included a stint at Colgate-Palmolive Co.

A rough year

A rough year, in which he experienced the separate deaths of his parents and a brother, moved him in 2003 to devote himself full time to making his Automoblox dream a reality. He made a trial run of the cars in 2004 and test-marketed them that year.

The company's first test cars received a good amount of media attention in the toy and automotive press, and for about the first year "the orders came to us. We did no active selling," Calello said. Since then, the company has put a distribution network in place, with regional sales representatives.

Last year was the company's first holiday season with widespread distribution and it estimates that it sold about 80,000 of the cars as holiday gifts.

Barrett signed on as CEO last year after Calello decided he needed someone with experience running companies to help the business grow.

Barrett had been involved in a software startup in the 1990s in San Francisco, then had headed an eyewear company based in Hong Kong. Barrett said he was back in the United States, working as a consultant, when Calello invited him to join Automoblox. He said he took the job because he believes in the product.

"I've got two very young kids myself, and I'm not always real happy with what they have to play with," he said. "This is a great toy. How many toys look this beautiful and you can smash them around and they don't break?"

The toys are made in China, constructed out of high-grade beechwood imported from Germany, and shatter-resistant plastic parts.

The biggest challenge facing the company, both Calello and Barrett said, is the low profit margin involved in selling a toy that is expensive to make. Also, the company wants to stay in the specialty toy market, but it is hard to do large-volume sales in that market.

Barrett said the company makes money, and is on target to sell between 300,000 and 500,000 units this year.

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