Lionel Corporation

Lionel Corporation was an American toy manufacturer, specializing in toy trains and model railroads. Its trains, produced from 1901 to 1969, are the most famous toy trains in the United States and among the most famous in the world.

Company History

The original Lionel Corporation was founded in 1900 by Joshua Lionel Cowen and Harry C. Grant in New York City. The company's devotees disagree over the date of incorporation, as the official paperwork gives a date of September 5, but the paperwork was not filed until September 22, more than two weeks later.

Related Topics:
1900 - Joshua Lionel Cowen - New York City - September 5 - September 22

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The Pre-War Era

Lionel's first train was not intended for sale to consumers, but rather, as a storefront display. Delivered in 1901, it ran on a brass track and was powered by a battery and a motor originally intended for use in an electric fan. Cowen hoped to use the public's fascination with railroads and electricity to capture the public's attention and direct it to the goods for sale. Members of the public started approaching store owners about buying the trains instead, prompting Lionel to begin making toy trains for the general public. The earliest trains were larger than the sizes commonly available today, running on two-rail track with the rails 2 7/8 inches apart. In 1906, Lionel began offering a three-rail track that was less prone to electrical shorts. Its outer rails were 2 1/8 inches apart, which did not match any of the existing standards that other manufacturers had been using since 1891. Whether this was an accidental misreading of Märklin's Gauge 2 specifications or an intentional incompatibility is unclear, but Lionel named this non-standard track Standard Gauge, and then trademarked the name. When other U.S. companies began using Lionel's standard, they usually called it Wide gauge. Starting in 1915, Lionel followed most of its U.S. competitors and adopted the smaller O gauge standard for its budget-level trains.

Related Topics:
1906 - 1891 - Märklin - Standard Gauge - Wide gauge - 1915 - O gauge

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

By the end of World War I, Lionel was one of three major U.S. manufacturers of toy trains, and it grew rapidly due to shrewd marketing. Cowen began getting department stores to incorporate his toy trains as part of their Christmas tree displays, linking toy trains to Christmas and making them into popular Christmas presents. Lionel made its trains larger than anyone else, making them appear to be better values. When competitors criticized the realism of Lionel's trains--Cowen had been unwilling to invest in the equipment necessary for lithography, so its early offerings were simply painted with solid colors of enamel paint with brass detail parts--Lionel targeted advertising at children, telling children its products were the most realistic toy trains. Additionally, Lionel criticized the durability of competitors' products in ads targeted at parents.

Related Topics:
World War I - Marketing - Christmas tree - Christmas - Lithography - Enamel - Brass

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

By the 1920s, Lionel had overcome Ives to become the market leader, selling metal trains with colorful paint schemes. Lionel's fierce ad campaigns took their toll on Ives, who filed bankruptcy in 1928. Lionel and American Flyer bought Ives and operated it jointly until 1930, when Lionel bought Flyer's share. Lionel operated Ives as a subsidiary until 1932.

Related Topics:
1920s - Ives - 1928 - American Flyer - 1930 - 1932

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The Great Depression hurt Lionel badly, and the company flirted with bankruptcy because the trains were considered a luxury item, and at the height of the Depression one of Lionel's more extravagant locomotives cost as much as a used Ford Model T. In an effort to compete with companies that were willing to undercut Lionel's prices without diluting its premium Lionel and Ives brands, Lionel introduced a line of inexpensive electric toy trains under the Winner Toys or Winner Toy Corp. brand name, which it sold from 1930 to 1932. The starting price for a set was $3.25, including a transformer.

Related Topics:
Great Depression - Ford - Model T

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

These and other efforts to improve its financial standing were unable to keep Lionel from going into receivership in May 1934.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The product widely credited with saving the company was a wind-up handcar featuring Mickey and Minnie Mouse that ran on O gauge track and sold for $1. Lionel manufactured 250,000 units but was still unable to keep up with demand. At a wholesale price of 55 cents, the handcar's sales would not have provided enough profit to pay off Lionel's debts of $300,000, but it nevertheless provided much-needed cash. Lionel avoided bankruptcy and emerged from receivership the next year. By 1939, Lionel had discontinued its standard gauge products, concentrating instead on the more-affordable O gauge and OO gauge, which it had introduced in 1938.

Related Topics:
Mickey and Minnie Mouse - 1939 - OO gauge - 1938

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Lionel ceased toy production in 1942, producing nautical items for the United States Navy during World War II. The company advertised heavily, however, promising new and exciting products and urging American teenagers to begin planning their post-War layouts. It also introduced the so-called "paper train," a detailed set of cut-and-fold models of Lionel trains printed on cardstock that was notoriously difficult to put together.

Related Topics:
1942 - United States Navy - World War II

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The Post-War Era

Lionel resumed production of toy trains in late 1945, replacing their product line with less-colorful but more realistic-looking trains and concentrating on O gauge exclusively. Many of Lionel's models contained a new feature: smoke, produced by dropping a small tablet into the locomotive's smokestack.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Buouyed by post-war sales, by the early 1950s Lionel was the largest toy company in the world. During the 1950s, Lionel outsold its closest competitor, American Flyer, nearly 2 to 1, peaking in 1953. But Lionel started to decline in the late 1950s when hobbyists started switching to the smaller but more realistic HO scale trains and kids' interest shifted from trains to toy cars. Lionel brought out a line of HO scale trains in 1957 and followed with a line of slot cars as well. Neither approached the popularity its O gauge trains had enjoyed.

Related Topics:
1950s - 1953 - HO - 1957 - Slot car

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

In 1959, Cowen and his son sold out their interest in the company and retired. The purchaser was Cowen's grand nephew Roy Cohn, a businessman and attorney who had become infamous during the McCarthy Anti-communist hearings. Cohn replaced much of Cowen's management with his own. The direction of the company changed, and a small number of Lionel fans consider 1959 the end of the "true" Lionel. Cohn's tenure with Lionel was not successful and the company lost over US$13 million in the four years he ran the company.

Related Topics:
1959 - Roy Cohn - McCarthy - Anti-communist - US$

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Lionel's efforts to diversify, which were accelerated under Cohn, were unable to make up for the public's declining interest in its trains. Meanwhile, Lionel's closest competitor was also fading. In January 1967 the parent company of rival American Flyer, The A. C. Gilbert Company, went bankrupt. Lionel bought the name and the product line in May of that year in a deal valued at $150,000. However, Lionel lacked the financial resources to do anything with the acquisition and filed bankruptcy itself less than four months later, on August 7, 1967. In 1969 Lionel Corp. sold the product dies for its struggling train line—sales had declined to just over $1 million per year—and rights to the brand name to cereal conglomerate General Mills. The Lionel brand name continues today, under the ownership of Lionel, LLC.

Related Topics:
1967 - A. C. Gilbert Company - August 7 - 1969 - General Mills - Lionel, LLC

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Some Lionel enthusiasts consider 1969 the end of "true" Lionel trains, since the design and manufacturing changed, sometimes dramatically, under Lionel's new ownership.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The end of Lionel Corporation

After the sale of its train product lines, Lionel Corporation became a holding company that specialized in toy stores. At its peak, Lionel Corp. operated about 70 stores, mostly in the eastern United States, under the names Lionel Kiddie City and Lionel Playworld. For a time it was the second-largest toy store chain in the country. However, the larger Toys R Us was consistently able to undercut its prices, and Lionel found it increasingly difficult to compete. It filed for Chapter 11 bankruptcy on June 14, 1991. By 1993 it had dwindled to 28 stores in seven states, and on June 2, 1993, it announced its intention to liquidate all of its stores and go out of businesshttp://www.tcamembers.org/articles/collecting/stockcer/index.html.

Related Topics:
Toys R Us - Chapter 11 - Bankruptcy - June 14 - 1991 - 1993 - June 2

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The Lionel trademarks were purchased by Richard Kughn, a Detroit real estate magnate who had bought the Lionel product line from General Mills in 1986. See Lionel, LLC.

Related Topics:
Detroit - 1986 - Lionel, LLC

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The old Lionel factory in Hillside, New Jersey, where Lionel Corporation manufactured trains from the early 1920s up to 1969, burned in April 2004.

Related Topics:
Hillside, New Jersey - 2004

~ ~ ~ ~ ~ ~ ~ ~ ~ ~