Matchbox (brand) - History - Economic Difficulties, Bankruptcy, and The Post-Lesney Era

Economic Difficulties, Bankruptcy, and The Post-Lesney Era

Due more to the economic climate in the United Kingdom at the time than to the lack of success of the Matchbox brand — all of the core ranges continued to sell very strongly — the company was in difficult financial straits by the end of the '70s. The same forces were affecting their British counterparts/competitors as well: following in the footsteps of Meccano (Dinky) and just a year before Mettoy (Corgi), Lesney went bankrupt in June 1982, and went into receivership. The Matchbox brand name, some tooling and moulds and other assets were then sold to Universal Toys and Mr. David Yeh. Some of the Matchbox tooling became property of Jack Odell, who continued to market Matchbox Yesteryear-like products under the Lledo brand name, but essentially Lesney and Matchbox has been sold to Yeh and his group. Yeh reorganized Lesney and renamed the group "Matchbox International Ltd.", with Yeh as Chairman and Jack Forcelledo as President. Yeh took the group public in 1986 on the NYSE with a successful IPO.

Although no longer British-owned, limited production continued in England until the mid-1980s, re-using many of the old Lesney castings. Most production and tooling was moved to Macau. It was during this period that Matchbox acquired the rights to the venerated Dinky brand, perhaps the "mother of all toy car collectibles", and united two of the most important names in die-cast under one roof. New models were created (sometimes dies were also bought from competing companies), and the Dinky Collection was born. Dinky models tended to be of more recent classics (particularly the '50s), while Yesteryears tended to concentrate on older vintages. It was also during the Universal era that the "Matchbox Collectibles" concept was developed (see below, "Matchbox Collectibles").

Because of high labour costs and the lack of enough skilled workers in Hong Kong and Macau, the Universal decided to outsource its die casting in mainland China. April 1984, the first Hong Kong-Shanghai joint venture toys company was established in Minhang, Shanghai. It is called Shanghai Universal Toys Co., Ltd. (usually abbreviated as SUTC/上海环球玩具有限公司). Mr. Yeh is the Hong Kong party, while Shanghai Toys Import & Export Company, Shanghai Shang Shi Investment Company (the Shanghai Government owned investment vehicle), Bank of China and Aijian Holdings are Chinese shareholders. The CJV contract was signed off with 20-year period of validity.

1985 saw the first batch of Matchbox toys, which have China casting on base. Dies were imported from Macau to Shanghai till early '90s when Macau finally ceased producing Matchbox toys. No dies were designed by SUTC itself, decal painting, assembling and packing were the most things SUTC did. Accompanied with metal casting, SUTC also has a plastic kits and components factory. It is called Shanghai Universal Plastic Toys Company (usually abbreviated as SUPT/上海环球塑胶塑胶玩具有限公司). The Motor City series, Matchbox PK series and many plastic components were produced there between late '80s and mid '90s. Meanwhile, Universal also outsourced its die casting capabilities in Southern China. Yongtai Toys Company (永泰玩具有限公司) was the most famous one, which produced Matchbox toys under the license from Universal but without fixed assets investment.

By 1992, Universal was also seeking a buyer. In May 1992, they sold the brand to Tyco Toys, whose toy division in turn was bought out by Mattel in 1997, uniting Matchbox with its longtime rival Hot Wheels under the same corporate banner. Under Mattel, the name "Matchbox International Ltd." was terminated.

The buyout by Mattel was greeted with considerable trepidation by the Matchbox collectors' community. The rivalry between the Hot Wheels and Matchbox brands is not only a battle fought by the companies; collectors of each of the brands feel strongly about the qualities of their brand of choice. For the typical Matchbox collector, Hot Wheels are inferior in scaling and model choice, making Hot Wheels less desirable. There were great fears that Mattel would either impose a Hot Wheels-style philosophy on the Matchbox line, or actually fold the Matchbox line into the Hot Wheels series. Early concerns of this nature by collectors were countered by assurances from Mattel that (a) Matchbox would continue to develop their product line independently from Hot Wheels, and (b) that it was intended that Matchbox represent "real" and traditional vehicles, while fantasy would primarily be placed firmly in Hot Wheels territory. Some very realistic Hot Wheels Caterpillar models were actually re-branded to Matchbox to demonstrate the latter statement (though this did not necessarily assuage concerns about the truth of the former).

In 2002, Sky Busters made a comeback, but with Continental Airlines as the only major airline to sponsor the product. In 2003, Matchbox came out with a line of special edition cars to celebrate its 50th anniversary.

Breaking with the philosophy set forth in the '90s, Mattel revamped the Matchbox line almost completely in 2003, introducing "Ultra Heroes", a series of fantasy vehicles, as part of a "Hero City" theme. Matchbox collectors were appalled, but so was the market: These toys proved to be unpopular, and the line was soon discontinued. The next year, Matchbox, with a new team in charge based in El Segundo, California, USA started the return to the company's roots of selling realistic looking, well-detailed models, most of which were based on real prototypes (now however mostly of American cars or brands well-known on the American market). The reappearance of the pre-2001 Matchbox logo, albeit without its classic quotation marks, marked the return to this philosophy.

To signal the seriousness of the venture and their commitment to the brand, a new, second 1-75 series (parallel to the standard range) was introduced, celebrating the "35th Anniversary of Superfast". Models were packaged in model-specific blister packs containing not only the model, but also individual, traditional-style "retro" boxes harking back to the Superfast boxes ca. 1970. All castings were of realistic vehicles, and indeed some 1969 castings were re-activated for inclusion in the range. The series was strictly limited in production volume, sold at a premium price, and was a great success. Further Superfast series were released in 2005 and 2006.

Also in 2005, certain Yesteryear castings which had been released in the Tyco/early Mattel era as part of the "Muscle Car" series of Matchbox Collectibles were re-released in 1971-style retro packaging and retro wheels as Super Kings — considered by many to be a strange name choice, since models of this nature had been called Speed Kings in the '70s.

Following the "Hero City" fiasco (the name being dropped in late 2005 in favor of "MBX Metal"), Mattel has shown interest in reviving the Matchbox brand. However, since Matchbox Collectibles Inc. was shut down, Mattel's interests have always been concentrated on very few series of the Matchbox legacy: 1-75, Sky Busters, Convoys, and to some extent the Two Packs concept (although now sold under a different name, Hitch 'n Haul ). Although small numbers of Super Kings and Yesteryears have been released at times, no new castings have been created. Battle Kings reappeared on the market in 2006, but not as King Size models, but rather as a name of military-oriented Two Pack-style sets of regular size models. The Dinky name has effectively been reduced to a few "re-branded" Matchbox 1-75 cars on the international market (normal models with "Dinky" tampo-printed onto the baseplate); no further investment in dies or tooling has been made. It appears that this classic brand, once saved by Matchbox, may be allowed by Mattel to languish or die once again.

In 2008, Mattel expanded the size of the standard Matchbox series to 100 models in certain markets, most prominently in the US. However, the 1-75 series will remain a 75-model series in most markets.