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Lionel Trains return headquarters to Manhattan

Lionel Trains return headquarters to Manhattan

New York Sun 11/3/2006

By Annie Karni

After almost four decades working out of a sleepy Detroit suburb, Lionel, the toy train and model railroad manufacturer, is back on Madison Avenue, and trying to bring model trains out of the hobbyist’s basement and into the realm of popular culture.

Founded in 1900 by Joshua Lionel Cowen in Midtown Manhattan, Lionel grew to mainstream popularity through the 1950s, when trains were icons of Americana and lifelines of cross-country travel. But when cars and planes began to replace train transportation, Lionel’s sales dwindled, with only hardcore hobbyists buying.

The move to Madison Avenue is part of Lionel’s CEO Jerry Calabrese’s aim to “re-establish what Lionel’s tradition was for its first 65 years and stake our flag back in the world of pop culture,” he said in an interview yesterday.

The Madison Avenue showroom, complete with oak floors and three operating train layouts, marks a nostalgic homecoming for the company. “There are old men who weep that we’re back with a showroom on Madison Avenue,” Mr. Calabrese said. The showroom is now seven blocks north of the company’s original Madison Avenue showroom at 27th Street. “It’s great to be back in the city because the roots of the company are in New York,” Mr. Calabrese said.

The family-owned company moved from New York to Chesterfield, Mich., in 1969 when it was sold to the cereal conglomerate General Mills. “It was a time when cereal companies were diversifying into businesses about which they knew absolutely nothing,” Mr. Calabrese said. It was during this era that collecting model trains became stigmatized as a hobby for the 40-and-over set who enjoyed tinkering away in badly lit basements.

“The world’s taste changed in terms of entertainment,” Mr. Calabrese said.

“We became a smaller business that catered just to the hobby world.” The market is narrowed also by cost. Lionel trains sell for $189 and up. Now Mr. Cabrese talks of moving business into the fast lane. “We want to be back where that world is, and that’s New York.”

And with most of the large licensing shows and toy fairs operating out of New York, Mr. Calabrese said, “it just makes a lot of sense to have a presence here.”

On November 15, 2004, Mr. Calabrese took Lionel into Chapter 11 bankruptcy to protect the company from a lawsuit that accused a Lionel subcontractor of misappropriating a competitor’s train designs. The company is still bankrupt.

Mr. Calabrese, a former Marvel Comics executive, is using the comics industry’s successful transition from a hobby business to pop culture phenomenon as a business model for Lionel’s future.

“Comics were a true a hobby business. You wouldn’t find comic books in Wal-Mart or Kmart, but in a network of about 3,500 comic book stores. With the movies, suddenly you’ve got deals with Fruit Loops and it becomes media-driven pop cultural,” he said.

Under Mr. Calabrese’s leadership, Lionel has signed licensing deals with the movies “The Polar Express” and “Harry Potter,” with Nascar, and an exclusive deal with the MTA to manufacture replica subway cars.

Last year’s Lionel train display at Grand Central Terminal drew more than 200,000 visitors to the station Mr. Calabrese refers to as “the St. Patrick’s Cathedral of trains,”during the holiday season when train sets suddenly enter the mainstream zeitgeist. “At the end of the day we’re a pop cultural iconic American brand,” Mr. Calabrese said. “Now we have to catch up with our destiny.”