Slingshot Company Wham-O Sold To Chinese Company

Wham-O! Legendary toymaker is American-owned no more

Chinese investors couldn’t buy an oil company or the Maytag appliance company, but now a Hong Kong group has a claim on a genuine American business legend — Wham-O Inc., the maker of Frisbee, Hula Hoop, Silly String and Slip ’N Slide toys.

Privately held Wham-O said it had been sold to Hong Kong toy distributor Cornerstone Overseas Investments Ltd. for an undisclosed amount.

The 58-year-old company, of Emeryville, Calif., in recent years has bounced around more than a Super Ball — another of Wham-O’s famed inventions.

This marks the fourth change in Wham-O’s ownership since Rich Knerr and Spud Melin founded the company in 1948.

Wham-O got its name from the sound made by its original product, a slingshot.

Wham-O became ingrained in pop culture a few years later when it bought the rights to the Pipco Flying Saucer, which was later named the Pluto Platter before finally landing on the Frisbee brand in 1958.

The Hula Hoop craze made the company’s name a household word.

“Our brands aren’t considered hot because they are so old, but they are still cool,” said Mojde Esfandiari, Wham-O’s president. She hopes to double Wham-O’s sales during the next two to three years under Cornerstone’s ownership.

As the company changes hands yet again — Mattel held it for a time in the 1990s — its new owners promise to use their factories in China to deliver the products to new markets around the world.

“This is a very exciting deal, because of the strong brands and the expansion opportunities,” said James Rybakoff, chief executive of Akin Bay Co., the investment company that advised Cornerstone. “American retro-legacy brand names is what is in, and the Chinese love them.”

The deal also is an example of the new Chinese purchasing power — evidenced last year by bids for Unocal Corp. and Maytag Corp., although those ultimately failed.

In the past, U.S. companies outsourced their production or created joint ventures with Chinese partners that handled manufacturing and distribution. Now the Chinese are increasingly interested in buying established businesses and running the operations themselves.

“They want to keep the management and creativity and marketing in the U.S., but they want to have the manufacturing and back-office operations” in China, Rybakoff said.

Cornerstone plans to move Wham-O’s production to its larger Chinese factories to take advantage of economies of scale. Cornerstone is already doing business in 54 countries.

Cornerstone Chief Executive Jeff Hsieh owns a chain of 400 toy stores across China, making immediate distribution in Asia easier.

Cornerstone would not disclose the purchase price but said it was an all-cash deal for less than the $80 million Wham-O sought when it was on the auction block in 2004. Cornerstone said it would keep most of Wham-O’s 300 or so employees for now but had not made a decision for the long term.

“We’ve been expecting a sale of Wham-O for a long time, because the company has been struggling for quite a while,” said Jim Silver, editor of Toy Wishes magazine. “Their Frisbee sales have been shrinking. In in the water-slide business, they’ve lost market share to competition. And the majority of the hoop business is now with Maui Toys.”

The business was never huge — sales last year totaled about $80 million.