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Companies that vanished: Lionel Corp., synonymous with toy trains

This post is part of a series on some of the most memorable companies that have disappeared.

Although the name Lionel, synonymous with electric model trains, is still the hallmark of that toy genre, the current Lionel LLC, is in no way directly connected to the original Lionel Corporation.

The root stock of Lionel trains, Lionel Corp., was founded in 1900 by Joshua Lionel Cowen and Harry C. Grant in New York City. However, that company did not originally set out to manufacture toy trains. At the outset, Lionel was in the business of manufacturing small electrical devices, including fans and light fixtures. Lionel's first model train was in fact a window display designed to attract customers to other Lionel products. The train display was an immediate hit with customers, who then wanted similar sets for themselves, and thus the toy train business was set in motion.

Lionel had a bumpy yet upward ride from the time of its incorporation until 1957. In that year, a convergence of factors quickly brought trouble upon the company. A shift in consumer preference from Lionel's classic "O" gauge trains to the smaller "HO" scale cut deep into Lionel's sales. Toy buyers also began taking greater interest in the automobile, which compounded the company's troublesome decline. Then began a series of critical yet unsuccessful business moves that finally drove the company to bankruptcy in 1967. In 1969, Lionel acquiesced to the reality of its financial troubles and its toy train legacy was sold in its entirety to General Mills (NYSE: GIS).

After selling it's toy train interests, Lionel continued down a tumultuous path in the pursuit of operating its own chain of toy stores. The company had highs and lows in that regard also, yet the decline of the company seemed to be in the cards. Competitive forces, corporate misguidance, and irreconcilable financial difficulties figuratively conspired to bring the company to its knees.


Finally, in June of 1993, Lionel announced its intent to liquidate assets and cease operations. Today, all that remains of the original Lionel Corporation is the stalwart Lionel name (a new company purchased the rights to the name). Now it is that new Lionel that proudly wears the patina of 108 years of childhood exuberance, and which is coupled with a deep loving respect for the railroads.

Let us know in the comments what you miss about Lionel. And be sure to check out other Companies That Have Vanished.

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Last updated: November 21, 2008: 11:55 PM

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