Where is Marx Toys Going Next
This story is based on my personal interviews with some people on the inside of the current Marx company. I've left out certain names to protect sources, but I believe this is the way things currently are at Marx Toys and Entertainment, Corp. Obviously, this information is 'time-sensitive' and may change at any moment - I'll continue to refine this story as I learn more. This is current as of 14 March, 2005. Major discussion topics:1. State of Marx management
2. Sale of existing stock
3. Future plans State of Marx Management:
Background: Marx Toys and Entertainment Corp. was founded in 1988 and originally operated under the name stereoscape.com. The company grew through a series of rapid acquisitions over the past eight years, according to its corporate history and regulatory filings: American Buyers Club International in 1997, epiggybank.com and Marx Toys in 2000, and Toontz Toys in 2001. It changed its name to Marx Toys and Entertainment Corp. in March 2003.
Ross LaTerra became the CEO after private negotiations with the existing 3 person Board of Directors. It appears the LaTerra helped personal and company finances of the Board and Marx Toys. Paying building rent etc.
He had definite plans for Marx toys. In general he wanted the company to make and sell toys, reacquire the old Marx molds and produce new toys in the following years.
He funded the re-launch of the Marx website himself (That’s why it’s not available now, he told the web designer to cease work and the designer is still owed $2000 for past work).Since the 3 board members were not really ‘toy’ people, they investigated an idea to have an independent stock market trader work with the company assets to trade stock to make money. It is reported that this person had a questionable reputation and his approach may have caused 3 companies to recently fail. LaTerra wanted no part of it and gave the Board an ultimatum.
LaTerra made contacts at the International Toy Fair to do two things; 1) to finance the company and his plan by having a ‘large’ company enter into a type of partnership funding Marx toys for the foreseeable future, and 2). to work with the current owner of the Marx molds, a 'Mr. R.' LaTerra wanted to lease the molds during production with the option to buy the molds back after a period of time. It seems that Mr. R was willing to do that. When LaTerra briefed the Board on his contacts and plans they rejected it and wanted to go the stock trading route. So LaTerra resigned on February 23, 2005.
It appears that the Board is not well respected by stock holders as there are discussions to file a Vote of No Confidence with the SEC to oust the board and possibly bring LaTerra back. It is even alleged that one of the members worked with Classic Toy Soldiers to sell the use of the Marx name and Molds to make one of their Civil War sets selling for $300-400 each. Marx Toys company sees none of this money.
To help fund the new Marx, LaTerra had the existing stock completely inventoried and placed an ad in the March 18, 2005 issue of Toy Shop magazine, appealing to Retailers to buy out the existing stock at reduced prices. He was unable to pull the ad after his resignation and before Toy Shop went to press. A company called Encore is currently helping Marx sell this stock and if you call the number in the ad, that’s who you will speak to.
Sale of existing stock
The sale of the existing stock is working like an auction. There’s not a lot of stock left in the Sebring Ohio warehouse but they want to clear it out or move it to their NJ headquarters.
Current stock levels are:
Custer 3300
Silver Knight 900
Gold Knight 1500
Blue Knight 1700
Black Knight 2500
JW and Custer horse tack sets 1500+
Geronimo Acc sets (red) 3000-4000
Destiny blue armor 100 sets
Odin 2700 (most with black not white accessories)
Erik 2700
What Marx and Encore want is for a buyer or group of buyers to agree to buy the entire lot of a figure / set at a fixed price or a price per unit. They will negotiate smaller buys but they would prefer to sell large lots. Meanwhile their normal wholesale distribution / selling is going on.
Note on Tack Sets:
Red Geronimo set was made in large numbers in preparation for plans to issue Geronimo and another horse [Storm Cloud?]. But when that plan fell through they had all these red accessory sets so they are selling them for around $6.00 a set.
JW Tack set. This is a partial set of horse tack (Saddle, blanket, bags, bridle, reins) that is made in brown stiffer plastic. $4.00 / set
Custer Tack set – This is a complete tack set as issued with vintage Thunderbolts. It is a darker brown and softer plyable rubber. It is a western saddle not a cav saddle. $4.00 / set
Marx had planned to issue Mike Hazard before Christmas of 2004. Those plans are still being discussed and they may issue the figure this year regardless of the management structure.
Related Press Releases:
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