Chapter 11 for Fundex
One company I have admired for many years is Fundex. What impressed me about this company was their consistent branding. Whether it was their logo, their packaging design, their website, their tradeshow presence and other marketing materials, Fundex kept a consistently professional appearance and appeared to live their motto “Where fun comes first!”
And with games like ‘Phase 10’, the second best selling card game next to Uno in their line, Fundex was indeed a company to watch!
It came as no surprise to anyone in the toy industry that Fundex recently filed for Chapter 11, listing assets of less than $1.5 million and liabilities of $8.9 million. According to news reports, Fundex had annual sales of $25.8 million in 2010. Sales plummeted to $13.3 million in 2011. For the first 7 months of 2012, annual sales had slid down to $2.6 million.
While there are many reasons for the spectacular drop in revenue – all of which can be seen online in other posts and blogs – I prefer to focus on the opportunities. After all, Fundex produced great products, some branded with licenses from the world’s top game brands (including Scrabble, Rubik’s Cube, Barbie, NHL, and Hot Wheels). Fundex also owned Great American Puzzle Company, one of the leading jigsaw puzzle companies in North America.
Although Fundex is seeking to reorganize its assets under the protection of bankruptcy, perhaps Chapter 7 would be more appropriate. This will allow intellectual property controlled by Fundex to be sold to other games companies; companies that can breathe new life into these games. This would also hopefully allow creditors to see at least a few pennies on the dollar. There are a lot of creditors owed a lot of money.
The demise of Fundex also opens valuable retail shelf space across North America. This is an opportunity for mid-sized companies like Outset Media to reinvigorate some of that shelf space with new board games.
Whether Fundex manages to reorganize and continue operations, or the company’s games are sold to other companies, I hope we continue to see their products on retail shelves because I know customers enjoyed them.
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