TOY INDUSTRY HAS BIG PRESENCE IN VALLEY.

Byline: Brent Hopkins Staff Writer

When San Fernando Valley shoppers hit the toy store, there's a good chance they're supporting their hometown without even knowing it.

In recent years, the region has become a haven for toy makers, boasting the creative minds that have come up with holiday favorites and perpetual favorites. From classic characters like Raggedy Ann and Andy or Winnie the Pooh, controlled by Woodland Hills' Applause, to staples offered by Northridge's What Kids Want, the area has won recognition from the industry as a hotbed of talent.

Dominated for years by New York, home to the annual Toy Fair showcase and many of the industry trade magazines and showrooms, the local area has built itself into a formidable force in the toy world.

``There's a huge presence in Southern California that no one realizes is here,'' said Genna Goldberg, a spokeswoman for Malibu-based Jakks Pacific. ``New York is a very important city for the toy industry, but it's not the ideal location for us on a day-to-day basis. We joined a lot of our peers by locating out here and we don't plan on changing.''

To be sure, most firms are still in industry giant Mattel's long shadow. The El Segundo-based Barbie maker brought in $4.8 billion in sales in 2001 and dwarfs all its competition in sheer size with its 27,000 employees. With its marketing might and worldwide distribution, the firm was once seen as an unassailable player, buoyed by Barbie to untouchable reaches.

But the Valley's upstarts have managed to keep Mattel busy. MGA Entertainment snatched the fashion doll category with its Bratz dolls, first conceived in North Hills and modeled after chief executive officer Isaac Larian's own family. Jakks Pacific has grown to become the third- largest publicly traded toy firm after Mattel and Hasbro, cobbled together by Jack Friedman and Stephen Berman in only seven years.

All the major players cited access to talent as their key reason for setting up shop locally. Additionally, aside from Larian, the heads of all the firms live in the area, making it a strangely tight-knit community of chief executives.

Bob Solomon, chief executive officer of Applause, has relocated his various firms to Woodland Hills several times, all for the purpose of being near his home.

``I moved Applause to the Valley in 1983 and became an owner and president,'' Solomon recalled. ``We sold it in '88 and I stayed on for three years. I bought Dakin in San Francisco, then moved it to Woodland Hills and became Applause's major competitor. My goal was to buy Applause back, but they bought me. I had to sign a five-year agreement to not compete. They didn't want me to buy someone else and bring it to Woodland Hills again.''

When the company nearly folded in 2001, Solomon bought it back from foreclosure and kept its offices on Variel Avenue open.

With so many toy companies established locally, combined with a strong business school at California State University, Northridge, and stellar design presence at California Institute for the Arts in Valencia and Pasadena's Woodbury University, the talent pool is rich.

``We can recruit a better work force here,'' said Larian, who relocated MGA to North Hills in 1995. ``We used to be downtown, which is a really tough place to get people. People don't like going all the way down there - but here, most of our employees live 15 minutes away. They're our biggest assets, so we wanted to come here for them.''

Once established here, the firms can share talent, as well. Although Larian says companies have a friendly understanding not to head-hunt from one another, these companies cross-pollinate regularly.

``There's a bit of a revolving door in the Valley toy industry,'' said Dave Schwartz, vice president of marketing for Woodland Hills-based Funrise. ``You see people from Jakks at Applause or people from Applause at MGA. The fount of many people's experience is Mattel. People cut their teeth in El Segundo, then find their way back here, where they live anyway. We're all looking to hire the best talent, and if there's no relocation involved all the better.''

Jordan and Steven Kort, co-CEOs of What Kids Want, launched their own firm in 1999. After two decades of working in the family business downtown, their first thought was to come to Northridge.

``And we're proud of it,'' Jordan Kort said. ``The Valley's a safe neighborhood. Downtown wasn't the greatest neighborhood and we were in a very industrial area. That was great for the toy industry when there was lots of production going on there. Now that's done in the Orient, so it's morphed into a design business that fits better in the Valley.''

Even as production moved overseas, the area gained newfound importance because of its proximity to the Port of Los Angeles, the shipping gateway to Asia, and its easy international access for executives.

``For a company like MGA or Funrise, the Orient plays a big part in the business,'' said Jim Silver, publisher of the New York-based trade magazine Toy Book. ``There are many trips to be made to Hong Kong, and the difference from New York to Hong Kong is six more hours on your trip. That can be a whole day, so that's a big factor.''

The region's close proximity to Hollywood studios helps, as well, with nearly all the firms relying at least partially on licensed material for revenues.

The Valley's only problem lies in its own success, Larian said, as the area has been so good to him, he's running out of room. Now his North Hills office is getting more and more cramped, he's looking to expand to Warner Center.

Seven years into a successful run, however, Jakks' Goldberg said the firm has no plans to change its Malibu address anytime soon.

``We've done so well, we don't want to rock the boat,'' she said. ``It's just about the nicest place on the planet to work.''

CAPTION(S):

3 photos

Photo:

(1 -- color) The world's best-known rag dolls, Raggedy Ann and Andy, are licensed by Applause, a Woodland Hills toy company.

(2) Funrise Toy Corp., a Woodland Hills manufacturer and distributor allied with major toy firm Hasbro, makes children's toys such as the Spider-Man electronic pinball machine, at left.

(3) In the fashion-doll category, one of the latest Barbie challengers is MGA Entertainment's newly introduced Slumber Party Cloe, right, conceived in North Hills as part of the Bratz assortment.