Charlie Woo spends more time around toys than does the average adult. Heck, he probably spends more time with toys than most kids. Four decades ago, Woo emigrated with his family from Hong Kong to Los Angeles, where he would eventually start his own toy company and help turn a blighted downtown neighborhood into a thriving business district. Early on, though, the challenges he faced were daunting. A childhood battle with polio left Woo with limited use of his legs, and when he moved to the United States as a teenager to go to UCLA, his English skills left something to be desired. But he persevered, earning both his bachelor’s and master’s degrees in physics. In 1979, Woo, then a Ph.D. student, took the summer off to help his family start a small toy company, ABC Toys, in downtown Los Angeles – and he never looked back. Woo soon set out on his own, starting Megatoys. Today, the company has 500 employees and annual sales of nearly $100 million, with an emphasis on low-cost toys, including dolls, water guns and remote-controlled cars, which typically retail for less than $10. The company designs and imports the toys from factories in China, supplying major retailers such as Wal-Mart and Walgreens. Credited as the father of the Toy District, the 58-year-old executive is now one of the area’s largest property owners and a leading voice for the wider business community, becoming the first Asian American chairman of the Los Angeles Area Chamber of Commerce in 2001. Most recently, he proposed his first development: a 320-unit live-work complex in the eastern part of downtown. The Business Journal caught up with Woo at Megatoys’ downtown headquarters where he discussed his life, the toy business and the future of downtown.

Question: What will be the hot toy this Christmas?

Answer: I believe the highly promoted, licensed items – like Transformers – will be hot. But that’s based on promotion. I don’t see any sort of innovation. This is a period when there’s no one new technology.

Q: Does Megatoys sell any licensed toys?

A: We do licensed toys based on characters, but we don’t do the movies because it’s very expensive and for such a short time.

Q: It’s curious you said there will be little innovation this year. Why is that? The economy?

A: A little bit. Some companies innovate when business is slow, but in general they don’t. We try to, but we are not trying to create one toy that dominates the market. We just want to constantly upgrade the line and create a better value, so we beat out the other competitors for shelf space.

Q: What’s the biggest hit you ever had?

A: Everything is relative. My Easter basket line is generally (earning) the most revenue in the last couple of years. I would say those little micro, radio-controlled cars were the hottest. I sold more than a million pieces in less than two months.

Q: Are there ever times when you think something will be big and then it’s a bust?

A: All the time. (Laughs.) I’ll give you an example. A couple of years ago, everybody wanted to buy bigger and more expensive radio-controlled toy cars, like up to $100. They made them two or three feet long and people put in more bells and whistles, and all of the sudden those items weren’t selling. Usually there’s a trend and everybody overdoes it, then the bubble bursts and people move on to something else.

Q: How do you turn a concept into a toy, anyway?

A: We have designers on staff and we have freelance people that we engage to come up with products. We have the Hong Kong office to translate the concept into a set of plans that a Chinese company can understand.

Q: So how did you first get into the toy business?

A: I came here as a foreign student to go to school at UCLA to study physics. One summer I dropped out of my Ph.D. program to help the family start a toy wholesale business. That started the whole thing and I never went back.

Q: Given your family’s emphasis on education, were there any second thoughts about not pursuing physics?

A: There is a lot of reward being an entrepreneur. I manage my own time and I can live the life I want. I like being an entrepreneur.

Q: Now that you’ve achieved business success, do you ever consider going back to finish your Ph.D.?

A: I’ve thought about it, but I don’t have the attention span. Being a scientist, you need to live with your project. In business, I make all the decisions (quickly).

Q: So, why did your family choose toys?

A: At that time, Hong Kong was kind of a manufacturing center, not China, and everybody knew somebody that was in the toy business. You’d have friends, cousins, people you go to school with in the toy business. It was an industry where I could get the product.

Q: So it wasn’t a result of a childhood love of toys?

A: No.

Q: Do you still have family in the industry?

A: All my four brothers are working in the industry. This business I share with my brother, (Megatoys President Peter Woo).

Q: So exactly how do you split running the business with your brother?

A: There’s no set rule. There’s just an understanding that if he’s responsible for something, he does it; if I’m responsible for that, I do it. If I’m not available, he’ll cover for it. (Currently), he’s busy watching his Halloween shipment.

Q: Do you have kids?

A: I’ve got two boys: one at UC Berkeley, one at Stanford.

Q: As children, they must have been thrilled to have a dad who owned a toy company.

A: No. (Laughs.) For a while, but they always wanted what they didn’t have.

Q: Do you think your kids will follow in your footsteps and take over the company?

A: I don’t know. It’s too early to say. I would actually prefer my kids not work in the business at least in the beginning. I want them to make it on their own.

Q: How has the toy business changed since you started?

A: It’s a different environment in terms of the customer base – from a mom-and-pop, neighborhood independent business to large discount chains that dominate the market. Every phase of the business has changed. The supply side has changed. You have so much production capacity now in China. But you need to be selective about your supplier because government regulation has changed.

Q: Did the China lead safety scare affect you?

A: We have had to terminate some suppliers because they could not produce consistently. We gave our existing contractors a new set of guidelines and regulations. We just take the product and test it and test it and retest it. You can do the product 100 times, but if you have one failure, then you wipe out everything you’ve done.

Q: Tell us why you’re credited as father of the Toy District.

A: My family just rented a 300- to 400-square-foot storefront warehouse on Third and San Pedro streets. As the business grew, we bought neighboring buildings for storage. We had a lot of customers who actually started their business because we were there; we were their supplier for toys for them to sell.

Q: How many buildings do you currently own?

A: I don’t even know. (Laughs.) More than 10 in the Toy District. You guys did an article one time that said I was the largest property owner in the Toy District. I’m not sure if that’s correct, but you guys thought that was.

Q: You recently unveiled plans for a live-work development that would replace one of your warehouses. Why?

A: We just noticed that on our street, it’s a quiet street with some artist residents. People live nearby. The next building is a pretty well-known artists’ loft. You’ve got movies renting out space. This is a somewhat trendy place.

Q: How about some details on the project.

A: We are going to build on both sides (of Garey Street) and rebuild the street for pedestrians so that we would have an open area for shops and restaurants and businesses that would serve the growing population in this area. I see my project as an open space gathering area for the neighborhood.

Q: But the real estate market is horrible right now.

A: I think this is really the time to take the first step and prepare ourselves and go through the entitlement process. I think when things are down is really the time to start thinking about the next step. When the next cycle comes in, I will be ahead of the curve.

Q: Let’s talk about how you ended up leading the chamber.

A: (Having a) business in the Skid Row area, that required a lot of development and government attention to attract customers and to lower the crime rate. I was a frustrated person trying to get through City Hall, and then I learned how to reach out to neighboring businesses and organize and form a business group, called the Central City East Association. I was the chair of that and then became a director of the L.A. Chamber of Commerce. I was the chamber’s first Asian-American chairman in 2001.

Q: What would you say was your biggest accomplishment?

A: I can take credit for changing the chamber bylaw to (establish) a political action committee to start endorsing candidates for local elections. Now, the chamber’s PAC endorsement is one of the most sought-after endorsements in the area.

Q: Not bad for someone who grew up speaking Chinese at home and not moving to the United States until you were 17.

A: I went to high school in Hong Kong, so I learned my English. I knew enough to read and write, but in terms of speaking, it was pretty much like any foreigner coming to this country – it took me a while to learn how to speak well. I had to take all the basic, remedial English classes in the first year.

Q: That certainly wasn’t your only obstacle to overcome. It must have been a struggle to deal with polio as a child.

A: It’s impacted my whole life. It impacted my childhood; I could not go to school for several years. When I actually started going to school, I had a lot of catching up to do.

Q: Do you think it has changed who you are?

A: I think it makes me a tougher person. Still, a lot of everyday activities that other people take for granted, I struggle with. I have to deal with it every day. You just need to look at the positive side and make the best out of it. I don’t sit back and feel sorry for myself.

Q: Does being in a wheelchair ever make things difficult?

A: I have a little difficulty maneuvering in the factories in China. But I’ve dealt with it all my life. It helps keep things in perspective: If I can deal with my own disability, I can deal with (anything).

Q: You are still heavily involved in the daily operations of Megatoys. How much longer do you want to do this?

A: That’s a question I always ask myself. It’s a stressful business. You’re dealing with consumers; you’re dealing with the supply chain, logistics, manufacturing, design. I have to worry about every aspect of the business every day. I stay up till 2 almost every night so that I can communicate with my Hong Kong office.

Q: So why not retire?

A: It’s a very stressful business, but I wouldn’t know what to do. (Laughs.)

Charlie Woo

TITLE: Chief Executive

COMPANY: Megatoys Inc.

BORN: 1951; Hong Kong

EDUCATION: Bachelor’s and master’s in physics, UCLA

CAREER TURNING POINT: Dropping out of the doctoral physics program at UCLA to help run his family’s toy business full time

MOST INFLUENTIAL PERSON: His father, who made sure that Woo had every

opportunity to get an education, and who also instilled in him a conservative business philosophy

PERSONAL: Lives in Rancho Palos Verdes with his wife; has two sons in college

HOBBIES: Politics, community involvement, spending time with his kids

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