Founded in 1919 in New York City by Louis Marx and his brother David, the company's basic aim was to "give the customer more toy for less money,"
and stressed that "quality is not negotiable" - two values that made the company highly successful.
Initially, after working for Ferdinand Strauss, Marx, born in 1894, was a distributor with no products or manufacturing capacity (King 1986, 188).
Marx raised money as a middle man, studying available products, finding ways to make them cheaper, and then closing sales.
Enough funding was raised to purchase tooling from previous employer Strauss for two obsolete tin toys - the Alabama Coon Jigger and Zippo the Climbing Monkey
With subtle changes, Marx was able to turn these toys into hits, selling more than eight million of each within two years. Another success was the "Mouse Orchestra" with tinplate mice on piano, fiddle, snare, and one conducting
By 1922, both Louis and David Marx were millionaires. Initially, Marx produced few original toys by predicting the hits and manufacturing them less expensively than the competition.
The yo-yo is an example: although Marx is sometimes wrongly credited with inventing the toy, Marx was quick to market its own version.
During the 1920s, about 100 million Marx yo-yos were sold.
Unlike most companies, Marx's revenues grew during the Great Depression, with the establishment of production facilities in economically hard-hit industrial areas of Pennsylvania
West Virginia, and England.
By 1937, the company had more than $3.2 million in assets ($42.6 million in 2005 dollars), with debt of just over $500,000.
Marx was the largest toy manufacturer in the world by the 1950s. In 1955, a Time Magazine article proclaimed Louis Marx "the Toy King," and that year, the company had about $50 million in sales.
Marx was the initial inductee in the Toy Industry Hall of Fame, and his plaque proclaimed him "The Henry Ford of the toy industry."
At its peak, Louis Marx and Company operated three manufacturing plants in the United States: Erie, Pennsylvania, Girard, Pennsylvania, and Glen Dale, West Virginia. The Erie plant was the oldest and largest, while the Girard plant, acquired in 1934 with the purchase of Girard Model Works, produced toy trains, and the Glen Dale plant produced toy vehicles (Marx Trains 2007). Additionally, Marx operated numerous plants overseas, and in 1955 five percent of the toys Marx sold in the U.S.A. were made in Japan (Time Magazine 1955).
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