Empty toy box paid off big time for Kenner

In honor of Star Wars Day on May 4, we're republishing this story from 2017.

He had one thing on his Christmas wish list.

Star Wars. Star Wars "anything," to be exact.

And on the morning of Dec. 25, 1977, Matthew Fox unwrapped more than what he wanted. He got Star Wars everything.

Forty years ago, a Star Wars Christmas mostly meant jigsaw puzzles and a board game. But there was one other thing under Matthew's tree that year. Something the world had never quite seen before and would never quite see again.

But it had to do with Star Wars, so it was there, for 6-year-old Matthew to open in his Dearborn, Michigan, home that morning.

It was an envelope, the size of a typical board game, emblazoned with these words in technicolor: "Early Bird Certificate Package."

It was an IOU from Kenner's headquarters in Cincinnati – printed half a million times over or so – that once the company's Star Wars toys were ready, a tiny, plastic Chewbacca, Luke, Princess Leia and a robot called "Artoo-Detoo" would arrive in your mailbox, before anybody else on the block.

It was something. But what?

For Matthew, the early bird certificate was just a piece of paper. A piece of paper he couldn't play with. At least he could do something with the puzzles, he thought.

For the top brass at Kenner, however, that early bird certificate was the only thing they could conceive in time for Christmas '77, which fell – to the day – seven months after some space opera called "Star Wars" debuted.

Christmas '77 also came just about eight months after Kenner president Bernie Loomis shook hands with an up-and-coming director named George Lucas and bought the rights to make what would soon – and still – be one of the most successful toy lines of all time.

That success, however, came way too soon and almost no one, not even Lucas, saw it coming. Even today, a few months is not enough time to design and manufacturer new toys.

So Kenner folks did something daring. Unheard of. Now, it almost seems unthinkable.

It sold a promise.

Here's the strangest thing of all: The certificate, that gutsy gamble, paid off big time, elevating Kenner, the people who worked there and the city they all called home.

Maybe it was luck. Maybe it was moxie. Maybe it was the right place, right people, right time. Maybe it was that Cincinnati toymakers knew people and how they play better than anybody else on the planet back then.

But one thing is certain. Forty years and eight "Star Wars" films later, that idea is still working.

Risky business

This early bird certificate was actually just a gamble within a gamble, one little risk within the great big risk that was Star Wars. But the Kenner people saw something that no one else in their industry did.

They almost didn't get the chance. See, there is a reason they didn't secure the licensing rights for Star Wars until the month before the sci-fi flick hit the silver screen. They were the very last company director George Lucas and distributor 20th Century Fox approached.

Top toymakers like Mattel passed. Politely. "It was greeted with a seated ovation," joked Pete Kelly, head of sales for Kenner at the time.

It's said that the Mego representative literally pushed the Star Wars folks out the door at Toy Fair in New York City that February. This Star Wars idea was that crazy.

Still determined – or just plain desperate for extra financing – the filmmakers tracked down Kenner's Craig Stokely at that NYC industry showcase.

Stokely agreed to catch an across-town cab to check out a trailer for a new movie coming out that might have a toy potential. Even though no movie as of that date had proven real toy potential.

Companies much bigger than Kenner had tried products inspired by the "Dr. Doolittle" and "Chitty Chitty Bang Bang" movies. The films did fine, the toys not so much.

Most movies came and went pretty quickly, with typical theater runs of 10 weeks for only the big hits, which in 1976 were "Rocky," "All the Presidents Men" and "A Star Is Born." Home entertainment systems were years away from appearing in most people's homes. Betamax hadn't even come out in the United States yet.

Television, however, meant almost guaranteed money. With products imitating the shows and cartoons that played every week, year after year, in America's living rooms, these TV toys advertised themselves.

Kenner knew that better than most. Its line based on the hit action TV series "The Six Million Dollar Man" was pretty much paying the bills.

But in February 1977, it took Stokely just a couple of minutes in that NYC office to believe that Star Wars could break the mold.

This could reinvent the rules.

He only watched the trailer, but that was enough time to see the robots and the vehicles. He didn't know the plot or the point. But he saw toys in every scene, in every second.

His boss, Bernie Loomis, coined a term for this: Toyetic.

Stokley's first stop when he returned to Cincinnati would have to be Loomis' office.

The Wizard

Loomis was a forceful man, confident and clear. He boasted he was the only person who subscribed to The Hollywood Reporter in all of the Queen City.

Jim Kipling, Kenner's longtime lead lawyer, calls him "lightning in a bottle." Others today just go with genius.

In the early 1970s, Loomis led the business, then a subsidiary of General Mills, to double its gross sales.

Before Kenner made the mold for C-3PO, the company had already produced 150 different toys and employed as many as 4,000 Cincinnatians.

And the ideas those thousands created often hinged on hunches. People literally operated on goosebumps there. If they got that reaction to an idea then that idea would move on to the next step. And Star Wars, even just the trailer shared around that office, gave them chills they couldn't shake.

Loomis had them, too. He knew what he wanted: That when the Star Wars toys appeared on the shelves, the box had to say "Made in Cincinnati."

The right stuff

Loomis next had to go to California to secure that partnership with Lucas.

Pete Kelly later heard that meeting went something like this: Lucas only shared the story. No script. It was basically Cowboys and Indians in space, Kelly said. Big block drawings hung in the California office. There was Darth Vader. There was R2D2.

Loomis and company talked it over. The design lines of the characters and vehicles were right, meaning they easily could be manufactured as toys. The names were right. This whole thing could be right.

The group eventually negotiated the terms. The advance against all the royalties was $25,000. The royalty guarantee was $125,000 and the royalty rate was 5 percent. (When these terms were re-negotiated in the early 2000s, toymakers had to pay more than $300 million upfront. And today, Star Wars toys and merchandise are valued at $17 billion.)

In a couple months, after Star Wars hit the theater, that agreement became also the deal of the century for Kenner.

Star Wars wasn't a movie. It was a phenomenon.

We didn't ask each other if we'd seen "Star Wars." We asked how many times we had seen it.

That summer, we wore bellbottoms with our Star Wars tees, grooved to the Star Wars disco 8-track. We bought every Star Wars poster, which replaced that Farrah Fawcett glamour shot as the top seller of the day.

We bought up all those Kenner puzzles. A Kenner board game called Escape from Death Star for $6.49 at Shillito's.

The Awakening

Steve Sansweet thinks he knows why the movie "awakened something" in millions. He's the chairman and president of Rancho Obi-Wan, a museum of the world's largest collection of Star Wars memorabilia.

"This was the era of Vietnam," he said. "It was a dark era. The movies were dark. George Lucas wanted to do a movie for kids that had heroes in it. There hadn't been many movies for kids or pitched to kids with heroes since the westerns of the '50s."

Cincinnati was one of the first 32 cities to see the first film on its release May 25, 1977. Unlike in the other cities, Cincinnati actually screened the saga before the rest of the world. And only the Kenner employees were invited.

Mark Boudreaux was there. A Cincinnati kid, he was then an intern at Kenner. And from the moment the star destroyer flew over his head on that big screen, his life was changed. The University of Cincinnati student just didn't know it yet.

The next year, he would be one of the lead designers on the Millennium Falcon, the "piece of junk" ship that still soars in "Star Wars: The Last Jedi." Today, a decade and a half after Hasbro acquired Kenner, Boudreaux is the senior principal designer at Hasbro, still making Millennium Falcons.

Toy Story

Forty years ago, Boudreaux and his Kenner coworkers left that early "Star Wars" preview buzzing with a jumbled up mix of excitement and anxiety.

Why would their company even license a movie that was just months away from Christmas, the biggest sales time of the year?

Kenner could pull off those puzzles and that game, the easier to produce two-dimensional stuff.

But kids wanted what Kenner does. They wanted toys.

Designer Ed Schifman says he first mentioned the early bird idea to Loomis in a passing hallway conversation.

"Why not offer the right to purchase the product when it becomes available?" Schifman said to his boss. Loomis smiled back, as Schifman tells it. "I'll get back to you," Loomis replied.

Loomis announced the Kenner Early Bird Certificate Package to the rest of the world in September.

Each included a certificate good for four Star Wars action figures, a display stand, a Star Wars Club Membership Card signed by Luke Skywalker and some stickers.

All the customer had to do was mail in that postage paid certificate. And then wait. And wait for 3.75-inch versions of their favorite characters.

The package said the toys would arrive sometime between Feb. 1 and June 1, before the pose-able toys were available in stores. And the certificate was only available to retailers to sell before Dec. 31.

That limiting purchasing period was one of Loomis' compromises with retailers. Because he struggled to sell just the possibility of a product to stores.

The big box retailers like Sears and J.C. Penney's downright refused to stock the certificate.

The force awakens

Pete Kelly, the vice president of sales, didn't think much of the early bird certificate either.

"But Bernie (Loomis) was a force … he thought it was a great idea so that meant that we at least had to present it like it was a great idea," he said. "Which we did."

And Kelly did get the regional retailers to bite. A Children’s Palace toy store around here sold 24 certificates in two weeks. Acme-Click had 20 dozen certificates on the shelves before Christmas.

It all added up to a few hundred thousand kits sold. (Kelly's not sure of the number now and even 40 years ago, the reported sales total varied.)

But Kelly still saw it as a success because it kept Kenner's name in the same sentence with the massively popular film. ("Star Wars," by the way, was still playing in Cincinnati on Christmas Day at the Showcase Cinemas in Springdale and Erlanger.)

Matthew Fox received his Christmas gift, fulfilled, March 3, 1978. It's easy for him to remember the day the four toys arrived because it was also his seventh birthday.

He got them as soon as he came home from school. And the next day, he took the toys to school that morning. Later, so did his friends.

Kenner sold 22 million Star Wars toys annually during the run of the first three films.

Supplies would sell out in hours. The average kid owned 11 Star Wars toys, and Kenner enjoyed an 80, 85 percent market penetration.

That's unheard of.

"I think the toys were essential to making Star Wars the phenomenon that it is today ... There were toys there in the three-year period between movies that would keep the movies alive," Steve Sansweet said.

Fox and his friends couldn't put a movie projector in their pockets. So to remember the movie, you had to be the movie. Act it out with your Kenner toys in the backyard, the basement, on the bedroom floor.

The saga continues

Some 4,000 miles away in England, a 9-year-old named Steve was playing with Star Wars toys in backyards and bedrooms.

He asked for figures and ships each and every birthday and Christmas. He learned to recognize the Kenner company logo on the box.

"As the Star Wars story grew, I grew with it," Steve Evans says today. "The journey of Luke Skywalker resonated with me as a kid trying to work out life, family, friends, school, and knowing right from wrong. It was – like all the best tales – incredible but relatable."

Since 2014, Evans has been on Hasbro's Star Wars team.

Today, the early bird certificate feels like "it really represents the psyche of all of us Star Wars fans," he said. "If it's Star Wars, we want it. No matter how crazy it sounds."

That includes the early bird certificate today, 40 Christmases later. Now, as a coveted collector's item.

"I would imagine the amount made was limited, which conjures this 'holy grail’ type mystique to it," Evans said. "Also, the fact that it was virtually all paper products adds to its lore. It’s very unlikely that someone will find one undamaged today."

Bill Wills was one of those average kids, owning handfuls of Star Wars toys. He was 7 when "Star Wars" played in the theater on Main Street in Hamilton, not far from his hometown of Trenton.

Wills doesn't remember the early bird certificate package from those early years. But he has one now.

"Well, if you're into the Kenner action figures, this is where it all started," he said, holding an unopened early bird package he picked up for $300 about 20 years ago. "This is what started everything.'"

He expects this early bird package is worth about $7,500. If he had bought at Shillito's in 1977, it would have cost him $11.99.

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Empty toy box paid off big time for Kenner

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