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Formerly | Ritvik Holdings (1967–2002) Mega Bloks Inc. (2002–2006) |
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Company type | Subsidiary |
Industry | Toys Stationery and crafts |
Founded | 1967 |
Founders | Victor and Rita Bertrand |
Headquarters | Montreal, Quebec, Canada |
Key people | Marc Bertrand (CEO) Vic Bertrand (CIO) [1] |
Products |
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Brands |
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Revenue | $1.08 billion (Est. FY 2020) ![]() |
Number of employees | 1,700 (2018) [3] |
Parent | Mattel (2014–present) |
Website | megabrands |
Mega Brands Inc. (formerly Mega Bloks Inc. and Ritvik Holdings) is a Canadian children's toy company that is currently a wholly owned subsidiary of Mattel. Mega Bloks, a line of construction set toys, is its most popular product. Its other brands include Mega Construx, Mega Puzzles, and Board Dudes. The company distributes a wide range of construction toys, puzzles, and craft-based products.
In 2016, Mega Brands' Bloks was second in worldwide sales (11%) of toy construction building sets. [4]
In 1967, Victor Bertrand and his wife Rita founded the company as Ritvik Holdings (RH). Ritvik is a portmanteau word based on a combination of Rita and Victor. RH began by distributing toys made outside Canada and also facilitated contracts between foreign brands and Canadian manufacturers. [5]
Ritvik later became a vertically integrated company as it expanded by adding plastic injection molding operations, design operations, tooling manufacturers, and marketing services. The company had a leading share of the plastic injection molded market by the early 1980s. [5]
Wanting to expand beyond Canada, Victor Bertrand took an interest in construction block sets. He saw room for growth despite them being an industry staple since the early years of the 20th century when the Batima Block was released in Belgium in 1905. With Lego being the leading construction toy, Bertrand chose to make a similar set. Bertrand ignored friends and advisors, feeling he had two advantages in launching Mega Bloks: he aimed to produce jumbo-sized bricks for toddlers, who Lego bricks were not designed for, and he considered his expertise in injection molding would give him a price advantage. [5]
At 1984 trade shows, Ritvik showed the Mega Bloks line in the US and Canada. An immediate hit, Mega Bloks had generally large sales in Canada, including a $1 million sale to Toys R Us, and were available almost anywhere in the two markets in 1985. Several multinational companies had made offers just after the trade show for distribution rights, as well as to buy either Mega Bloks or RH itself. [5]
By 1989, Mega Bloks were in 30 countries and popular in Europe, the US and Canada. Up to 30 play sets were available. A piano set with Mega Blok-compatible keys for the pre-school market was released in 1988. In 1989, Ritvik sold all of its other toy and plastics lines. [5]
A Mega Bloks "Micro" line was released in 1991; these were compatible with or a clone of Lego bricks. This finally placed Ritvik and The Lego Group in direct competition. Lego Canada soon sued Ritvik for unfair competition, claiming a likelihood of confusion between its Micro Mega Bloks and the Lego line. Since Lego's brick shape patent had expired, the lawsuit dragged on for years as sales grew worldwide (at an average 70% a year until the mid-1990s), but finally Ritvik won the case by clearly distinguishing its brand from Lego. Suits were filed in Europe and the U.S. with similar results. [5]
In 1996, a 28% share of Ritvik was sold to the Blackstone Group. Rita Bertrand and her daughter Chantal retired that year, while Marc and Victor Bertrand Jr. were active in management. Two international subsidiaries were formed, Mega Bloks Latinoamerica S.A. de C.V. in 1997 and Mega Bloks Europe N.V. in 1998. International sales in the 1990s were at 30%, with 70% from Canada and the US; all but 10% were from four major chains: Toys 'R Us, Wal-Mart, Target, and Kmart. [5]
Ritvik followed the late 1990s licensing trend in 1998, with its first licensing agreement being for Teletubbies , followed by an agreement with Fisher-Price with its Sesame Street characters license. A NASCAR line was also introduced. [5] Ritvik Toys, Inc. was amalgamated with Ritvik Holdings Inc. on June 30, 1998. [6]
Lego, K'Nex and Ritvik added features to their lines in 2000. Ritvik made transformable building sets that changed into vehicles, and a remote control electronic kit named the Mega Bloks RO Action Builder. Ritvik also added TV advertising that year with a $2 million campaign; the company spent $30 million on advertising, marketing, and research and development in 2002. [5]
With sales having approximately doubled since 1999, Ritvik went public via an initial public offering in May 2002 on the Toronto Stock Exchange under the new name of Mega Bloks Inc. [5] The company traded at $14.50 a share. [1] The founders' sons, Victor Bertrand Jr. and Marc Bertrand, became chief operating officer and chief operating officer/president, respectively, while Victor Sr. remained chairman of the board. [5]
The toy market was in a down cycle from 2002 to 2003, with the construction toy segment losing 10 to 15%, but Mega Bloks experienced increased sales. Since 1986, the company had seen a run of 17 years of growth, becoming number two in the construction toy segment behind Lego. [5]
In 2003, the company formed a joint venture with the Japanese toy company Bandai for Asia. Bandai marketed Mega Blok sets with their existing licensed Japanese cartoon characters. With the success of movies of J.K. Rowling's Harry Potter books and J.R.R. Tolkien's Lord of the Rings, a Dragon series was released in 2003. Mega Play!, a block set large enough for children to fit inside, was also launched. [5]
With shares trading at almost $30, in 2005 Mega Bloks, Inc. acquired Rose Art Industries, including its Magnetix line of toys, for US$350 million. [1] Soon, Magnetix was a source of lawsuits resulting from choking incidents, causing its share value to drop quickly. Magnetix was then recalled. [1] The company acquired Board Dudes, Inc., makers of Board Dudes posting and marking boards and Locker Dudes locker products, in January 2006, through its Rose Art Industries subsidiary. [7]
On June 15, 2006, following the acquisition of several brand names not associated with construction brick toys,[ citation needed ] the company again changed its name, this time from Mega Bloks Inc. to Mega Brands Inc. [1] with Rose Art Industries, Inc. being renamed Mega Brands America, Inc. [8]
After 23 consecutive years of growing sales and profit, Mega lost $458 million in 2008. Heading towards bankruptcy, the company refinanced. Shares were consolidated 1-for-20, with Fairfax Financial becoming a major partner in the recapitalization. [1]
Rose Art was placed on the market in March 2008 as a result of inquiries from the previous owners and others. [9] The former owners of Rose Art, Jeffrey and Lawrence Rosen, offered to purchase it back in April 2008. [10] They then sued company management for insider trading in September 2008, alleging shares were sold prior to the Magnetix recall. [11] Rose Art's base operation was shut down in New Jersey, and in 2010 the company moved its stationery and activities division, with some key employees, to Irvine, California, under new executive Thomas Prichard, a former executive at Crayola, Pixar, and Hasbro. The subsidiary was not sold, and was reintegrated into Mega operations by 2012. [1]
On February 28, 2014, it was announced that Mattel, Inc. would acquire Mega Brands Inc. for approximately US$450 million. [12] It became a wholly owned subsidiary of Mattel as of April 20, 2014. [13] Prior to the purchase, Mega and Mattel were partners in adding Mattel brands to Mega "Worlds" plus a line for Mattel's American Girl that competes with Lego's Friends line. [4]
Three years later, on February 10, 2017, Mattel announced that it was introducing Mega Construx, [14] a new sub-brand of construction sets designed for children four and up as well as adult collectors. Construx's first license property line was Pokémon, launched in mid-2017. [4]
In March 2021, LaRose Industries, the company founded by Lawrence Rosen in 2008, announced it purchased the RoseArt brand from Mattel. The purchase reunites the RoseArt brand with the Rosen family. [15]
Mega Construx micro figures do not follow the iconic Lego modular mini figures: instead their figures allow up to 16 articulation points, i.e. poses and customization. [4]
In 2022, many lines of Mega Construx were rebranded to MEGA with a purple logo. Some products from prior years have been sold with either branding.
Mega Bloks were featured in a commercial for the Honda Element, in which bricks fell from the sky to assemble the full-sized vehicle. The commercial clearly identifies the bricks as Mega Bloks in the opening moments of the sequence. [16]
Mega Brands currently[ when? ] has the licensing rights for Thomas the Tank Engine , video game franchises Call of Duty and Halo , Barbie , Masters of the Universe , Hot Wheels , Power Rangers , American Girl , Monster High , Pokémon , Destiny , and used to have the rights for the Despicable Me franchise.[ citation needed ] Mega Brands picked up the license for Nickelodeon franchises like SpongeBob SquarePants and Teenage Mutant Ninja Turtles after Lego discontinued carrying their version of the licensed sets.[ citation needed ] They also have the rights to produce sets based on Nick Jr. Channel properties like Paw Patrol , Blaze and the Monster Machines , and Shimmer and Shine . They have even recently picked the license for Alien as well.[ citation needed ]
This section needs additional citations for verification .(March 2023) |
Mega Brands has won 14 cases launched by competitor Lego regarding its Mega Bloks.
The Lego Group has filed lawsuits against Mega Bloks, Inc. in courts around the world on the grounds that Mega Bloks' use of the "studs and tubes" interlocking brick system is a violation of trademarks held by Lego.[ citation needed ] Generally such lawsuits have been unsuccessful, chiefly because the functional design of the basic brick is considered a matter of patent rather than trademark law, and all relevant Lego patents have expired.[ citation needed ]
On November 17, 2005, the Supreme Court of Canada upheld Mega Bloks' right to continue selling the product in Canada. [17] A similar decision was reached by the European Union's Court of First Instance on November 12, 2008, when it upheld an EU trademark agency decision following an objection by Mega Bloks against a trademark awarded to Lego in 1999. [18]
On September 14, 2010, the European Court of Justice ruled that the 8-peg design of the original Lego brick "merely performs a technical function [and] cannot be registered as a trademark". [19]
Lego is a line of plastic construction toys manufactured by the Lego Group, a privately held company based in Billund, Denmark. Lego consists of variously coloured interlocking plastic bricks made of acrylonitrile butadiene styrene (ABS) that accompany an array of gears, figurines called minifigures, and various other parts. Its pieces can be assembled and connected in many ways to construct objects, including vehicles, buildings, and working robots. Assembled Lego models can be taken apart, and their pieces can be reused to create new constructions.
Mattel, Inc. is an American multinational toy manufacturing and entertainment company founded in Los Angeles by Harold Matson and the husband-and-wife duo of Ruth and Elliot Handler in January 1945 and headquartered in El Segundo, California. Mattel has a presence in 35 countries and territories; its products are sold in more than 150 countries. Mattel consists of three business segments: North America, International and American Girl.
Bob the Builder is a British animated children's television series created by Keith Chapman for HIT Entertainment and Hot Animation. The series follows the adventures of Bob, a general contractor, specialising in masonry, along with his colleague Wendy, various neighbours, and friends, and equipment, and their gang of anthropomorphised work-vehicles, Scoop, Muck, Dizzy, Roley, Lofty and many others. The series ran from 12 April 1999 to 31 December 2011 in the United Kingdom through the CBBC strand and later CBeebies. The series originally used stop-motion from 1999 to 2009, but later used CGI animation starting with the spin-off series Ready, Steady, Build! (2010-2011). The British proprietors of Bob the Builder and Thomas & Friends sold the enterprise in 2011 to US toy-maker Mattel for $680 million.
Lego Duplo is a core product range of the construction toy Lego by The LEGO Group, designed for children from 1+1⁄2 to 5 years old. Duplo bricks are twice the size of traditional Lego bricks in each of their three dimensions, making them easier to handle and less likely to be swallowed by younger children. Despite their size, they are still compatible with traditional Lego bricks.
Construx is a brand of plastic building toys introduced by Fisher-Price in 1983. Unlike other building toys such as Lego, Construx feature beam-like pieces of varying lengths that snapped on to cubical connector knots in order to build large shapes. These are relatively secure even though no nuts or bolts were used. Panels allowed assembly of flat surfaces. Hinges, motors, wheels, and other movable parts expand the number of different shapes that can be built, and make moving creations possible. Construx was discontinued in 1988, briefly revived by Mattel in 1997, and then discontinued again. Mattel resurrected the Construx name as Mega Construx in 2017.
Tyco Toys was an American toy manufacturer. It was acquired by Mattel in 1997, becoming one of its brands.
Lego began in 1932 in the carpentry workshop of Ole Kirk Christiansen, a Danish carpenter. He initially produced furniture but later started making wooden toys. The company was named "Lego" in 1934, a contraction from the Danish phrase "leg godt", meaning "play well". Coincidentally, ‘lego’ means ‘I put together’ in Latin.
The LEGO Group is a Danish construction toy production company based in Billund, Denmark. It manufactures Lego-branded toys, consisting mostly of interlocking plastic bricks. The LEGO Group has also built several amusement parks around the world, each known as Legoland, and operates numerous retail stores.
Kirkbi AG v. Ritvik Holdings Inc., popularly known as the Lego Case, is a decision of the Supreme Court of Canada. The Court upheld the constitutionality of section 7(b) of the Trade-marks Act which prohibits the use of confusing marks, as well, on a second issue it was held that the doctrine of functionality applied to unregistered trade-marks.
Lego City is a theme under which Lego building sets are released based on city life, with the models depicting city and emergency services, airport, train, construction, and civilian services. Legoland Town is one of the three original themes that Lego produced upon its launch of the Lego minifigure in 1978 along with Castle and Space. The Town brand was briefly replaced with Lego World City in 2003 and 2004 before it was simply rebranded as Lego City in 2005.
Lego Spider-Man is a product range of the Lego construction toy, based on the Marvel Comics character Spider-Man. When the theme first launched in 2002, it was inspired by the Spider-Man film released the same year and was part of the Lego Studios line. Additional sets were released two years later, based on the film's sequel, Spider-Man 2. The theme was discontinued before the release of Spider-Man 3, and the rights were sold to rival Mega Brands, who entered a multi-year licensing deal with Marvel Enterprises, giving them the rights to produce playsets, vehicles, and other building-themed products based upon various Marvel characters for their Mega Bloks toys.
Lego Creator is a Lego theme for generic models. Creator sets have few specialized bricks to create buildings, creatures, vehicles, and robots. Some sets featured instructions for three different possible builds from the bricks included and most sets in recent years have used the 3-in-1 label. Creator is also a parent theme to Lego Icons, a Lego subtheme for adolescents and adults featuring advanced building techniques and large piece counts, mostly known for Modular Buildings and detailed vehicles. Creator also has had several other subthemes such as X-Pods and mosaics.
LaRose Industries, LLC is an American toy, arts & crafts, and stationery company based in Randolph, New Jersey. It sells products primarily under the brands Cra-Z-Art, RoseArt, and USA Gold.
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KRE-O is a line of construction toys manufactured by South Korea-based Oxford and marketed by Hasbro. Kre-O was released in stores in Fall 2011. The name Kre-O comes from the Latin word creo, which means "I create".
A Lego clone is a line or brand of children's construction blocks which is mechanically compatible with Lego brand blocks, but is produced by another manufacturer. The blocks were originally patented by The Lego Group in 1961 as "toy building bricks", and the company has since remained dominant in this market. Some competitors have moved to take advantage of Lego brand recognition by advertising their own products as compatible with Lego, with statements such as "compatible with leading building bricks".
Guangdong Loongon Animation & Culture Co., Ltd. (广东小白龙动漫文化股份有限公司), often referred to as Loongon, is a Chinese children's toy manufacturer based in Guangdong and founded in 2003. Loongon and its family of brands, including Lepin and Cogo are known for producing Lego-compatible brick sets. Loongon is publicly listed as of 2014 as stock 831015 on the Chinese stock exchange known as the National Equities Exchange and Quotations.
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