Lionel Train Company Going Digital

By Andrew Khoury,
Money and Investing Writer

After 113 years, the iconic train set company, Lionel Trains, is getting a digital makeover.

CEO Jerry Calabrese has a mission to reinvent Lionel to appeal to kids today who are playing games but at the same time, keeping the “old folks” who grew up with the electric model trains happy.

Calabrese says that being a 113 year old company is both good and challenging. The challenging part is becoming a rec­ognized brand of the twenty-first century, something they were a century ago.

One of the ways Lionel plans to achieve this is through its recently launched iPad app that interfaces with its model trains. It allows users to control the trains, tracks, and other components through the app.

Along with the app, the company launched a new game, Lionel Battle Train, an iPad game where the player has to fend off enemy attacks while moving his/her train from one point to another.

“Digital gaming is the future. We want a new generation of kids to discover us digitally,” says Calabrese.

He also wants to set up partnerships with popular online marketplaces like eBay (NASDAQ: EBAY) and Amazon (NASDAQ: AMZN) to further immerse the company in the digital age.

Lionel will also launch a line of Christmas ornaments this year which it hopes will appeal to people’s nostalgia of when they were kids.

Josh Lionel Cowen started the presti­gious train company in 1900, and although the company remains standing today, it has not been an easy feat to accomplish. The company has changed ownership four times and has even gone bankrupt.

Cowen originally sold the trains to hardware stores as window displays, but people liked them so much, they wanted to buy them for their homes. What benefitted the initial launch of the company was how railroads were new and very popular.

These train sets did not come cheap however, as an average Lionel train set was approximately the same cost as the average mortgage payment. After World War II, trains were less popular as the airplane had stolen the spotlight.

The company strug­gled enough that in 1969, the company licensed its trains to General Mills. Manufacturing moved from New Jersey to Michigan to Mexico and back to Michi­gan.

In 2004, Lionel, then owned by a private equity firm, filed for bankruptcy after losing a patent infringe­ment lawsuit that cost them $41 million.

Four years later, in the midst of the financial crisis, the company got back on its feet.

A version of this article appeared in the Tuesday, Oct. 29 print edition.

Contact Andrew at
andrew.khoury@student.shu.edu

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