Rose Art Industries

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Rose Art Industries

6 Regent Street
Livingston, New Jersey 07039
U.S.A.
Telephone: (973) 535-1313
Toll Free: (800) 272-9667
Fax: (973) 533-9447
Web site: http://www.roseart.com

Private Company
Founded: 1923 as Rosebud Art Company
Employees: 153
Sales: $12.3 million (2000 est.)
NAIC: 339942 Lead Pencil and Art Good Manufacturing; 339941 Pen and Mechanical Pencil Manufacturing; 339932 Game, Toy, and Children’s Vehicle Manufacturing

Considered the fastest-growing crayon producer in the world, Rose Art Industries is a family-owned and operated private company based in Livingston, New Jersey. Rose Art’s products, numbering over 1,500, include a wide array of arts and crafts and stationery items, as well as toys, writing instruments, and bulletin and dry erase boards that are sold at leading retailers, including Wal-Mart, Target, Toys R Us, KayBee Toys, Walgreen’s, and A.C. Moore. Rose Art’s growth is associated with licensing agreements with such companies as Mattel, Marvel, and the NBA, and the company manufactures a number of top-selling children’s arts and crafts supplies, toys, activities, slumber bags, and back to school products featuring the popular characters Bob the Builder, Spider-Man, Barbie, Hot Wheels, Strawberry Shortcake, and Thomas the Tank Engine. Rose Art manufactures or assembles 70 percent of its products in the United States at plants in New Jersey, Indiana, and Oregon.

Family Business Takes Root: 1923–80s

In 1923 Isidor Rosen founded a small business called Rosebud Art Company in the Bronx, New York, that printed and produced coloring books. During the 1930s, the company changed its product offering to focus on games and puzzles. Two decades after its founding, the company was run by Isidor’s sons Irving and Sydney. During Irving and Sydney’s tenure as company heads, Rose Art diversified its product offerings to include novelties, American flags, and art and school supplies.

By the late 1970s, the company’s name had changed to Rose Art Industries. In 1978 the third generation of the Rosen family—Sydney’s sons Jeffrey and Lawrence—became active in the company. Rose Art focused on the manufacture of arts and crafts supplies, including crayons, paints, and chalks. That year annual sales reached $850,000.

In the late 1970s Rose Art moved to Passaic, New Jersey, across the river from New York’s Manhattan. During the Labor Day Weekend of 1985, a massive fire swept through the four-block industrial complex where Rose Art was located. The fire destroyed 23 homes and 17 industrial buildings occupied by approximately 60 manufacturers. Damages for the four-block site were estimated at $400,000,000.

Just days prior to the devastating fire, Sydney Rosen had been close to securing a $750,000 loan to buy new equipment for his growing company. Following the fire, the company’s entire inventory, manufacturing equipment, and even financial records were destroyed. Rosen’s bank, Midlantic Bank/North, had faith in his company, and approved the loan a day after the fire. Instead of going toward new equipment, the loan was used for rebuilding. Additionally, the bank offered Rosen and his company a $1.5-million line of credit.

The quick financial response and determination of the Rosen family aided the company’s recovery. Sydney Rosen recalled in The (New Jersey) Record, ‘The big question the day after the fire was whether we were going to start up at all. My two sons, my wife, they all looked at me and said, ‘What are we going to do?’ It never occurred to me to quit. I said, ’Well, let’s go,’ and my two sons sprang into action.” Immediately, Rosen installed extra phone lines in his home and ran the business from there until the company obtained a lease at a warehouse in Bloom-field, New Jersey, a month later. Two years after the fire, Rose Art’s sales had more than doubled, reaching $13 million in 1987. By 1993 company annual sales had increased by almost 2,000 percent to total roughly $100 million.

Acquisitions and Licensing in the 1990s

Rosen brothers Jeffrey and Lawrence bought Rose Art in the early 1990s. With Larry as president and CEO and Jeff COO, they continued the entrepreneurial spirit of the company by developing a growth strategy based on acquisitions and new product development. Rose Art president Larry Rosen noted in the New Jersey Business that the company would continue to grow by “acquisitions, creativity and innovation.” Through a steady series of acquisitions, including Coloron/Avalon, Warren Industries, American Publishing, among others, Rose Art increased its worldwide presence in the arts and crafts and toy industries.

In 1992 Rose Art ventured into the doll market when it became the licensed manufacturer of soft-bodied dolls in the “Precious Moments” series. Rose Art dolls in the series started at just under $10 and quickly became a hot seller among collectors and children alike. Also that year licensing agreements with Kodak yielded winners with Rose Art’s Kodak Sketch Case, which was awarded the Parent’s Choice Gold Award, and the Kodak Designer Desk, which was chosen by child expert Dr. Stevanne Auerbach as one of 1992’s “100 Best Product Picks.”

In 1993, Rose Art acquired the doll manufacturer Jesco, Inc. This acquisition opened the door for licensing rights with Jesco’s famous Kewpie doll on the eve of the doll’s 80^th anniversary. The doll’s official debut was launched at the American International Toy Fair on Valentine’s Day, 1994. Rose Art president and CEO Larry Rosen stated, “We expect our new line of whimsical and nostalgic Kewpie Babies … to recapture the hearts of people young and old everywhere.”

Marketing both to the nostalgic and the trendy consumer, Rose Art entered into the fashion doll industry with the release of XUXA, a replica of the wildly popular Brazilian children’s entertainer. The 11.5-inch doll’s lifelike appearance was gained by sculpting the doll from an actual mold of XUXA. Rose Art’s first step into the fashion doll industry set new trends in the business. Larry Rosen stated, “Unlike other so-called ethnic fashion dolls, the XUXA doll is based on a real, charismatic and colorful children’s entertainer—a woman with real features, fashions, talents and concerns.” Released just in time for the 1993 holiday season, the XUXA doll quickly became the “number one ethnic fashion doll” at Toys R Us, with one outlet selling as many as 500 XUXA dolls in one weekend. Demand for the dolls surpassed the original 200,000 and 50,000 dolls were soon shipped to meet the popular demand.

Predicting the trends of the toy industry increased Rose Art’s presence in the marketplace and by 1993, the company posted $105 million in annual sales. Though nowhere near the figure of leading toy maker Hasbro, whose annual sales that same year reached $2.7 billion, Rose Art could still claim to be in the top ten among toy makers. Despite the significance of Rose Art’s inroads into the toy industry, the company’s niche remained in the crayon and arts and crafts business. Rose Art became the fastest growing crayon manufacturer in the United States, ranking second behind Binney & Smith, the makers of Crayola.

Safety Precautions Alter Crayon Industry in 2000

When a report published in May 2000 in the Seattle Post-Intelligencer cited government-certified lab results that indicated asbestos, a carcinogen, could be found in 32 of 40 crayons made by Crayola, Rose Art, and Prang, the media and public quickly took notice. At issue was whether the talc used in the manufacture of crayons could deposit levels of asbestos. While the crayon manufacturers and spokespeople for art supplies safety at the Art and Creative Materials Institute of Hanson, Massachusetts, did not endorse the Post’s lab findings, the manufacturers were quick to investigate any safety concerns related to talc. Immediately on the heels of the news release, some school districts removed crayons from all classrooms as a precaution.

Company Perspectives

Rose An Industries offers over 1,500 products, which include crayons, markers, paints, molding compounds, cosmetics, activity kits, and licensed products—an extremely broad and diverse offering. With over 75 years of experience, Rose Art strives to create new and exciting toys and art supplies for children.

Key Dates

1923:: Isidor Rosen founds Rosebud Art Company in the Bronx, New York.
1940s:: Irving and Sydney Rosen, Isidor’s sons, join the company.
1970s:: Company is incorporated as Rose Art Industries and moves to New Jersey.
1985:: Fire destroys Rose Art factory and company’’s entire inventory and operations; company relocates to Bloomfield, New Jersey.
1990s:: Licensing strategy creates company growth and increased product line.
1992:: Company moves manufacturing facility to Wood-ridge, New Jersey, and merges with Brooklyn crayon company Coloron/Avalon.
1994:: Company headquarters opens in Livingston, New Jersey.
2000:: Rose Art is first crayon manufacturer to eliminate talc, a possible asbestos contaminant, from its crayon products.
2003:: Rose Art celebrates its 80th anniversary and Lawrence Rosen, grandson of Isidor, is made chairman.

By June 2, Rose Art announced that their crayons were deemed free of any asbestos after independent testing through a U.S. government-certified lab. Fifteen months prior to any of the controversy surrounding talc used in crayons, Rose Art had developed talc-free crayons in over 90 percent of its crayon products as a means to create an improved crayon. On June 13, the Consumer Product Safety Commission urged crayon makers to reformulate their products to exclude the use of talc even though any health risks associated with talc crayons were very low. Binney & Smith and Prang agreed to reformulate their crayons within a year, while Rose Art felt secure that they had already taken steps. CEO Larry Rosen asserted, ’’Because of our reformulation to a talc-free crayon more than a year ago, I believe our crayons to be among the safest on the market. Ironically, it was our determination to make a better crayon, brighter and more durable, that led us to the talc-free formula we feel to be superior to any we’ve had before.”

Surging Ahead into the New Millennium

By the end of 2000, Rose Art secured two key licensing agreements with Mattel to manufacture back to school supplies and activity products for Barbie and Hot Wheels. The company also signed a licensing agreement with the National Basketball Association (NBA) to create a new line of stationery, back-to-school products, and toys using player and team identification. In 2001 Rose Art acquired the Oregon-based coloring and arts manufacturer and distributor Western Graphics Corporation from that company’s parent Mead Corporation. This acquisition further strengthened Rose Art’s presence in the arts and crafts and stationery market that reached to over 80 countries worldwide. Larry Rosen claimed, “With this acquisition, as well as recent licensing deals and distribution agreements, Rose Art is well positioned for continued growth.” As the company celebrated its 80th anniversary in 2003 with more than 1,500 products and continued steady growth, Rosen’s words held true.