RETAIL TRADE: The Little King

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Zippo Climbs Back. The horn sold well, and Marx was made a Strauss director. One day the directors discussed whether the company should continue to manufacture and sell in its four retail stores in New York or give up selling. Marx alone urged Strauss to get out of the retail field. Instead of getting rid of the stores, Strauss got rid of Marx.

In his next job, as salesman for a Vermont wood-products company, Marx redesigned a line of wooden toys, and sales soared from 15,000 to 1,500,000 in two years. At the same time, Louis and brother Dave set themselves up as middlemen. Their specialty was to figure out how to cut costs on a 10 toy. Then they would land an order, farm out the manufacturing and pocket the profit. Before he was 21, Lou Marx had served a hitch in the Army, risen from private to sergeant, and, back in civilian clothes, realized his ambition of making $5,000 a year.

In 1921 brothers Louis and Dave started in to make toys themselves. They bought the dies for Zippo and the Coon Jigger after Strauss had gone bankrupt. The monkey and the minstrel had been on the market for more than 20 years, but Marx gave them bright new colors, brought out bigger models, and sold 8,000,000 of each. By the time he was 26, Marx was a millionaire and convinced that, in the toy industry, there is nothing new under the sun. To prove his point, he brought Zippo back this year, redesigned, rechristened (Jocko) and repriced.

Hard-driving Louis and easygoing brother Dave (known to friends as "Mako" and "Spendo") now have six U.S. factories, wholly owned British and Canadian subsidiaries, and toy-manufacturing interests in Germany, France, Mexico, South Africa, Japan, Australia, and Brazil. Peak U.S. employment: 8,000.

This year, while U.S. toymakers clamored for higher tariffs to keep out Japanese imports (current share of U.S. toy sales: about 6%), Marx-provided Tokyo toymakers with the cash and know-how to turn out toys that he contracted to sell in the U.S. as well as in foreign markets such as South Africa. This Christmas Japanese toys make up 5% of the Marx line and include many items, e.g., a $2.98 remote-control model auto that Japanese toymakers can turn out with 10-an-hour labor for less than half as much as it would cost to produce in the U.S. Marx bargained so closely with the crafty Japanese toymakers that Tokyo newspapers accused him of trying to ruin the industry. Marx was unabashed. "When in Rome," he shrugged, "shoot Roman candles."

As Christmas anticipation began to spread across the U.S. last week, Toy King Marx was busy wrapping up ideas for the presents that Santa Claus will be bringing two and three years from now. For Lou Marx, Christmas doesn't come just once a year, or even on Dec. 25. "When you come out with a real great hit," he says, "that's Christmas."