Traditional toymakers are being pressured by the increasing popularity of electronic products and retail consolidation, so the new owners of Imperial Toy Corp. know they'll have to make some changes.

Nonetheless, Peter Tiger, 43, and Art Hirsch, 47, have a great deal of faith in the key product of their company: bubble toys.

The duo took over in last month in a management-led buyout orchestrated by L.A. investment firm Sage Group LLC. Fred Kort, a Holocaust survivor, founded Imperial in 1969 with the high-bounce ball. He served as the company's chief executive until his death in 2003, after which his family shopped the company to private equity firms and toy companies.

Tiger and Hirsch, who have put in a combined 25 years at the L.A. company, did some checks on the suitors and were dismayed by the plans some of the equity firms had.

"They were looking at the cash that they would be generating in the company," Hirsch said. "Maybe on one hand pull out the cash and on the other hand, look to resell it." In part to keep the company from that fate, Tiger and Hirsch declared their intent to acquire the firm last summer.

"We realized it was an opportunity that we could do ourselves," Tiger said. "We always wanted to own our company." Tiger said Imperial racks up annual revenues in the range of $85 million and $100 million, and he projects 10 percent to 20 percent growth annually.

"There is a legacy," said Tiger. "We want to continue that and build on that." But he is also looking forward to new challenges.

"We are all about change, and change in a global environment." Tiger said, acknowledging that his industry was "not the healthiest."

To that end, Imperial will aggressively pursue licensing opportunities and push the company's products further into nontraditional retailing outlets, including grocery stores.

Imperial has had some success with licensing ventures. The company began selling Bubble Bellies animal-shaped toys that spew bubbles under its Little Tikes label. They are on sale for about $10 at the outlets of Target Corp. and Wal-Mart Stores Inc.

Currently, Imperial has 800 employees, and Tiger and Hirsch said there are no immediate plans to make cuts. However, the company is finding savings. It is eliminating a showroom at New York's International Toy Center, which Imperial has had for decades.

New Bedfellows
Gallery Corp., the L.A.-based company behind leading sleep supply retailer Mattress Gallery, has entered a franchise agreement with Dial-A-Mattress Operating Corp., which sells online and via phone as 1-800-Mattress.

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