Zak Designs Buys Rival Acquisition Gives Company New Access To Upscale Segment Of Market
Like Sylvestor catching the coy Tweety Bird, Spokane’s mass market distributor of cartoon-character dinnerware has gobbled up its major upscale competitor.
Zak Designs Inc., an Airway Heights distributor of children’s dinnerware to Wal-Mart, Target and other mass merchandisers, Thursday said it has acquired Selandia Designs, a Southern California distributor of dinnerware to Nordstrom, Bon Marche and high-end gift shops.
The deal gives Zak Designs immediate access to the lucrative upscale market and controlling interest in this unique import industry.
“This is a great acquisition for our company,” said Irv Zakheim, president of Zak Designs. “Selandia was our only real competitor, so we basically own this industry.”
Zakheim said he expects to add up to 10 employees to his staff of 140 people. Company revenues, which reached $40 million in 1996, should hit an all-time high of $50 million this year.
Terms of the Selandia sale were not disclosed, but Zak Designs has agreed to retain co-owners Dick Saklad and Margaret Word and six other artists and sales representatives in California. The company had employed 60 people.
Selandia will close its warehouse, but continue to keep a separate office. Zak Designs will keep the Selandia name for its high-end product division.
In a foreshadowing of the Selandia deal, some of Zak Design’s Winnie the Pooh products recently were pictured on the cover of Business Week magazine to illustrate how many companies are marketing two sets of products: one for the middle class, one for the wealthy.
“There’s a different philosophy with each product line,” Zakheim said. “Department store customers want high-grade quality that costs a little more, whereas customers in mass markets want quality with a good price. We need to separate as a company to handle that.”
Zak Designs obtains licensing agreements with Disney, Warner Brothers, McDonald’s, Universal Studios and others to use Mickey Mouse, Bugs Bunny, Curious George, Barbie and other characters on an assortment of acrylic tumblers, flatware, plates and bowls that are sold individually or in sets.
Company artists design the dinnerware in Airway Heights, but workers in Taiwan, Hong Kong and China manufacture them. The imported goods arrive in Spokane and are repacked in Zak Design’s 125,000-square-foot warehouse for distribution to thousands of retailers.
Zak Designs ships 4 to 5 million dinnerware sets a year, Zakheim said, and none cost more than $10 retail. That will change with the addition of the Selandia line, which prices sets at $20 to $25 each.
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