Lionel Names Jerry Calabrese Chief Executive Officer
10/07/2004
FOR IMMEDIATE RELEASE
COMPANY CONTACT:
Mark Erickson
(586) 949 4100 x1467
Lionel LLC
MEDIA CONTACT
Hollis Rafkin-Sax
Financial Dynamics
(212) 850-5789
Lionel Names Jerry Calabrese Chief Executive Officer
Chesterfield, Michigan – October 7, 2004 – Lionel LLC, the leading marketer of model trains and accessories, today announced that Gerard Calabrese, 56, has been named chief executive officer.
“We’re happy that someone with Jerry’s talent and experience has agreed to join Lionel,” said Greg Feldman, Managing Partner, Wellspring Capital Management LLC. “Jerry is a dynamic leader with a history of innovative thinking that has helped companies develop new and exciting products and markets. We believe that his fresh perspectives and operational expertise will propel the venerable Lionel brand to new growth, ensuring that Lionel trains continue to bring happiness to hobbyists for generations to come.”
“I’m very excited about coming to Lionel at such an important time in its 100-plus year history,” said Calabrese. “Lionel is one of the world’s most respected and recognized brands and the unquestioned leader in its core business of model trains. For more than a century, Lionel has been defined by its ability to create the best and most innovative products, and it’s a tradition I’m very serious about continuing. I have the greatest respect for hobby based businesses because they depend on the trust and loyalty of the fans that support them. Anyone who knows me knows that I will take nothing more seriously than the trust our fans have invested in Lionel over the years.”
Calabrese is a widely respected marketing innovator in consumer brand development, publishing and
Mark Erickson is the PR honcho.
Hi John,
Thanks for posting the release from a New York PR agency. We spoke to the agency this morning. Please look on our home page and note that we took the lead on this and posted the information about Jerry Calabrese about two weeks ago. I don’t know why it took two weeks for the official announcement.
Sincerely,
Neil Besougloff
editor
"“We’re happy that someone with Jerry’s talent and experience has agreed to join Lionel,”
I’m “Happy”… Your “Happy”… Is Everybody “Happy”???
Geeeeshh!!! Such enthusiam for a new CEO. It makes you wonder exactly “how happy” they really are, doesn’t it.
Only time will tell, I guess.
I’ve gotten to the point that I wish Mike Wolf would just buy Lionel and get it over with. Remember what happened the last time they brought in somebody from outside the industry to be CEO?
Speculation and rumors that MTH should/would acquire Lionel, is just that… speculation.
However, what has not been discussed, is the role the U.S. Government might play in this scenerio.
The FTC (Federal Trade Commission) is responsible for enforcing antitrust laws to prevent unfair competition.
If two large companies, who, together, already have a substantial market share of their business… and, if merged together, become so large as to “restrain” competition… then, the FTC may have jurisdiction over the approval of such a merger.
Just another “fly-in-ointment”… when such talk, between these two companies, arise.
MR, If Mike Wolf bought the entire 3-rail industry, there would be no antitrust issue, particularly in today’s political and regulatory environment. The whole shebang would be the proverbial pimple on Mattel’s[censored]
As for Government intervention, I personally favor making the Government it a requirement that every household possess either a standard gauge, O gauge, or S gauge layout. And, of course, persons operating HO or N should be under observation by Homeland Security. An exception could be made for OO since the UK is our best ally. [:o)] [:D]
I second this notion and propose to send it to my congressperson. Classic toy trains for everyone! Ask not for what you can do for yourself, but what you can do for O gauge. A chicken, uh toy train, in every pot.
Bob, OO is also exempt because Lionel made OO trains before the war COMPLETE WITH THE CORRECT NUMBER OF RAILS. BTW, did you know that prewar Flyer HO track is joined with the same exact track pins they used for “O” Gauge track?
Lionel OO also had the correct track gauge.
This announcement is probably why authorized dealers were “invited” to attend a meeting at corp., I think it was this week that my local dealer mentioned when I was in the store last week.
johnblair,??? Correct number of rails? I heard the class 1s are concidering going to 3 rail given the success that the model industry has had! I hear there wantin’ some of that action!!![:D]
I know Bob Keller’s bit about government regulation that every household having a train set is of course a joke. But if the hobby is going to grow and reach new people, it is more than likely going to be because of business and not regulatory reasons. It’s going to take promotion, advertising, fair distribution and pricing along with reasonably priced quality product.
It remains to be seen what will happen at Lionel. But I for one have no concern or worry over the new CEO and wish Mr. Calabrese the best of luck. I know these feelings here are not going to be popular with many adult modelers, but there has not been enough emphasis on the lower end affordable product… maybe Mr. Calabrese will change this if it is in his power and ablility. From what I know, Lionel’s distribution rules need to be be assessed and changed.
Look gang, regardless of the competition and who is making what, when newcomers go into a train shop it is probably the Lionel name that brought them in. I’m sure Lionel knows this. Those new customers are going to ask to see the Lionel product. Unless they’ve been sent in by a seasoned modeler, they don’t even know K-Line, Williams and MTH even exist. Therefore it is imperative that Lionel have the kind kind of product the newcomers with kids want and at the prices they can afford. When the other companies make the sale, it is probably because the customer has done some comparing of price and quality and decided to buy another brand. BUT it’s still the Lionel name that brought them in. It’s just that times have changed and folks aren’t as willing or simply can’t afford to pay more just for a name on the box.
Truth be told, when I show my trains to folks with kids, even though a majority of my stuff is K-Line, these folks can’t tell the difference. To them it all looks like Lionel. It’s the suggested list prices (and the dealer’s ability to discount) that makes the real difference between Lionel and the others.
Those Lionel catalogs from a few ye
Agent 027 is a voice of rationality. Putting the product line on a diet is a good idea. If you cannot present an entire line of trains in a 30 page catalog, there’s something wrong. Scale folks will still have Weaver and Atlas. If Lionel took the organizational effort they WASTED on just one of their special announcement locos and redirected it to having a complete functional Fastrack line, the company would be much better off. The 80-CW transformers seem to have reliability problems. but where are Lionel’s engineers? --off designing some $2.000.00 train set that less than 1% of their customer base would seriously consider purchasing. The cleansing was needed, now Lionel needs to get their product out to the consumer and the LHS around the country are going to have to work with Lionel to find an equitable arrangement for service and retailing of accessories. LHS need to also realize that for every thousand sets that Lionel sells in a mass market retail situation, 20 or 30 new hobbyists will be created. The LHS would be lucky to sel 10 sets in the same time frame. These newly minted model railroaders will need service and products that cannot be found in a toy or department store. Lionel needs to treat it’s service stations fairly. Then all will have an opportunity to prosper.
So where do you think Lionel should go from here. More scale offerings?, More starter products? I want to see Lionel gain a TV presence and an overall strategy of going where the costomers are (NOT the LHS) and sell TOYS . Then bring the customer into the HOBBY of model trains by servicing trains at the LHS The LHS could also have an enhanced line of products that the mass retailers could never stock. The whole strategy would be to create customers and nurture them. Lionel needs to realize that small businesses like the LHS need to manage their servivce business as a profit center so fair treatment is a must. The LHS is necessary for lionel to market their higher end product line. and receive the customers that Lionel and it’s mass retail partners have developed for them. In an ideal implementation of this steategy, the mass retailer and the LHS would be no more competitors than a high school and a college. Companies like Macy’s and Sears Built Lionel, NOT hobby shops It is time for Lionel to do what it does best. SELL MASS QUANTITIES and use the LHS as a partner to service their compleete line and sell the better stuff to a MUCH LARGER customer base than the local hobby shops are getting now.
Well John, without “seeing the books” it’s hard to know what is going on and what really works. The last period when there was any extensive TV advertising and mass-retailer exposure was during the mid-1970’s during the MPC years. I do recall seeing Lionel commercials on TV (and many times too) and seeing a full line of Lionel product in K-Mart, including track, accessories and separate sale cars. The last time Lionel product was in K-Mart was over a decade ago and that was only one single train set. And though I’ve heard there was a Lionel commercial, I have not seen one in over 14 years.
BUT was the MPC era the last period of real growth in sales of starter sets? I do know a bunch of modelers today who got their start with the much criticized product of the MPC period. Lionel press releases of recent years all state starter set sales (and direct related product) are up… up more than the MPC period? Up more than the increase in sales of high end product?
So Lionel will do as they will. I do know some of the things Calabrese has said are things I’ve been saying for years, so we’ll see what happens. I think there’s a profound and immediate need for more attention to the lower end of the product line because this is where you find future customers.
But is Lionel in the position to put money into the high and low end product at the same time?? You can bet all this new scale product tooling is costly and doesn’t see an immediate return on the development costs. Yet the scale modelers are a vocal group and they want more scale product. On the other hand, kids don’t even know about Lionel trains (until someone like me - or you - shows them their trains), so they’re not too vocal about what kind of product they want.
So who will Lionel listen to: someone they hear from and spends big bucks on their product or the guess from someone who is unaware of the company?
And as much as I love Neil Young’s music (all of it - even the stuff he dislikes) and admire
Agent 027, The tooling Lionel has now will carry them for a good long time.The only really new thing Lionel needs to do is modernize TMCC. Rotating thru diesel and car road names will keep them going for years. That was the formula they used in the postwar years and they now have a far larger suite of tooling so that it will not be as boring as the postwar years were. A friend has told me that Jerry Calaberse has been quoted as having said that he would like to shrink the Lionel catalog drastically. OK but there should be uncataloged store special sets and cars to add variety for the collector. The high end user has been spoiled in the last ten years and they can expect few really new products in the next few years but cost has to go down and volume has to go up for Lionel to succeed.