Shrinky Dinks founder hopes to sell toy business

Tag : plastic crafts

N orth Lake - In 35 years, a local business based on shrinking has expanded toinclude about 250 products sold in 42 countries around the world.
Now Betty Morris, one of the inventors of Shrinky Dinks, is hopingthat the value she created with her plastic crafts company, K &B Innovations Inc., translates to a big nest egg for herretirement.
"I can't believe it's gone so fast," Morris, 68, marvelsat the years that have passed since she and Kathryn Bloomberginvented Shrinky Dinks as a Cub Scout project with their sons inBrookfield.
Their story has been told many times: the two stay-at-home momsfound a craft project in a magazine that involved tracing onplastic lids and shrinking them in an oven. The Cub Scouts were soexcited by the activity that Morris and Bloomberg decided to pursuethe idea of creating a product and selling it.
Their first success came at Brookfield Square in 1973, where theysold kits for $2 that they had assembled themselves.
Soon after, they found a business partner, M.W. Kasch in Mequon, todistribute the product and a way to produce it. After a few months,they sold 50,000 kits in stores around the Milwaukee area.
Later, when their distributor ran into some difficulties, theylearned how to negotiate licensing agreements. Under suchagreements, companies such as theirs, which hold rights to aproduct, allow another company to use their brand name on otherproducts, in return for a licensing fee, typically 5%.
Colorforms was the first major toy business to make Shrinky Dinksunder an exclusive license agreement. A Smurfs Shrinky Dink kit wastheir biggest seller, Morris recalled.
"Shrinky Dinks just went crazy in the '70s and '80s," shesaid. Milton Bradley wanted it and bought the rights fromColorforms.
Bloomberg, meanwhile, left the business in the 1980s to pursue acareer in politics. She became a Brookfield alderman, and thenmayor for 16 years. Morris bought out Bloomberg's share of thebusiness and is now the sole owner.
Milton Bradley bought Parker Bros. during the 1990s and decided tofocus on games. The company stopped making Shrinky Dinks products,which cut off Morris' income stream from licensed sales.
"In the '90s, it was pretty rough," Morris said. Shestruck a new licensing deal with Western Publishing's Golden Booksdivision in Racine in 1994, only to have that company go out ofbusiness.
Morris decided that she was done with exclusive licensing plans. Itwas time to try something new. In 1998, she leased a building inNorth Lake and reorganized her company into a business that grantednon-exclusive licenses to multiple toy companies. Her profits wouldcome not from licensing fees but from sales of the plastic neededfor Shrinky Dinks. The producers of Shrinky Dink products arerequired to buy the plastic from K&B Innovations.
Morris buys the plastic in rolls from a plastics maker. K&Bemployees in North Lake roughen and cut the plastic, then ship itto factories in China, Korea and other places where Shrinky Dinkproducts are made.
Morris made a pact with her husband, Chuck, in 1998 that she wouldgive this new plan a year, and abandon the business if theycouldn't make money. Their decision spurred a resurgence in ShrinkyDinks products in the 2000s from manufacturers such as Creativityfor Kids, Alex, Usborne Books and Klutz Books.
In addition, K&B makes craft kits in North Lake that are soldto retailers such as Michaels and Hobby Lobby, as well as online.The Web site has sales of $20,000 per month, and total annualrevenue is well over $1 million, Morris said.
She estimates total retail sales for Shrinky Dinks products, since1973, at $150 million.
Shrinky Dink sales represent just a tiny part of the total salesfor arts and crafts toys, estimated by NPD Group at $1.5 billionfor the 12 months ended in August. That compares with $1.4 billionfor the same period a year ago.
K&B has a staff of six people who handle everything fromworking with plastic to shipping Internet orders.
Morris' husband, Chuck, has not been part of the business. Heworked for years at MGIC Corp., then operated his own company,ComCor Mortgage. Chuck Morris sold the business in 2004 toSouthport Bank of Kenosha, in preparation for retirement.
Betty's goal for next year is to sell her business and join him.