After 35 years of expansion, Shrinky Dinks brand is for sale

Milwaukee Journal Sentinel (MCT) - In 35 years, a business based on shrinking has expanded to include about 250 products sold in 42 countries around the world.

Now Betty Morris, one of the inventors of Shrinky Dinks, is hoping that the value she created with her plastic crafts company, K&B Innovations Inc., translates to a big nest egg for her retirement.

"I can't believe it's gone so fast," Morris, 68, marvels at the years that have passed since she and Kathryn Bloomberg invented Shrinky Dinks as a Cub Scout project with their sons in Brookfield, Wis.

Their story has been told many times: The two stay-at-home moms found a craft project in a magazine that involved tracing on plastic lids and shrinking them in an oven. The Cub Scouts were so excited by the activity that Morris and Bloomberg decided to pursue the idea of creating a product and selling it.

Their first success came at Brookfield Square in 1973, where for $2 they sold kits that they had assembled themselves.

Soon after, they found a business partner, M.W. Kasch in Mequon, Wis., to distribute the product and a way to produce it. After a few months, they sold 50,000 kits in stores around the Milwaukee area.

Later, when their distributor ran into some difficulties, they learned how to negotiate licensing agreements. Under such agreements, companies such as theirs, which hold rights to a product, allow another company to use their brand name on other products, in return for a licensing fee, typically 5 percent.

Colorforms was the first major toy business to make Shrinky Dinks under an exclusive license agreement. A Smurfs Shrinky Dink kit was their biggest seller, Morris recalled.

"Shrinky Dinks just went crazy in the '70s and '80s," she said. Milton Bradley wanted it and bought the rights from Colorforms.

Bloomberg, meanwhile, left the business in the 1980s to pursue a career in politics. She became a Brookfield alderman, and then mayor for 16 years. Morris bought out Bloomberg's share of the business and is now the sole owner.

Milton Bradley bought Parker Bros. during the 1990s and decided to focus on games. The company stopped making Shrinky Dinks products, which cut off Morris' income stream from licensed sales.

"In the '90s, it was pretty rough," Morris said. She struck a new licensing deal with Western Publishing's Golden Books division in Racine, Wis., in 1994, only to have that company go out of business.

Morris decided that she was done with exclusive licensing plans. It was time to try something new. In 1998, she leased a building in North Lake and reorganized her company into a business that granted non-exclusive licenses to multiple toy companies. Her profits would come not from licensing fees but from sales of the plastic needed for Shrinky Dinks. The producers of Shrinky Dink products are required to buy the plastic from K&B Innovations.

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Morris buys the plastic in rolls from a plastics maker. K&B employees in North Lake roughen and cut the plastic, then ship it to factories in China, Korea and other places where Shrinky Dink products are made.

Morris made a pact with her husband, Chuck, in 1998 that she would give this new plan a year, and abandon the business if they couldn't make money. Their decision spurred a resurgence in Shrinky Dinks products in the 2000s from manufacturers such as Creativity for Kids, Alex, Usborne Books and Klutz Books.

In addition, K&B makes craft kits in North Lake that are sold to retailers such as Michaels and Hobby Lobby, as well as online. The Web site has sales of $20,000 per month, and total annual revenue is well over $1 million, Morris said.

She estimates total retail sales for Shrinky Dinks products, since 1973, at $150 million.

Shrinky Dink sales represent just a tiny part of the total sales for arts and crafts toys, estimated by NPD Group at $1.5 billion for the 12 months ended in August. That compares with $1.4 billion for the same period a year ago.

K&B has a staff of six people who handle everything from working with plastic to shipping Internet orders.

Morris' husband, Chuck, has not been part of the business. He worked for years at MGIC Corp., then operated his own company, ComCor Mortgage. Chuck Morris sold the business in 2004 in preparation for retirement.

Betty's goal for next year is to sell her business and join him.

(EDITORS: STORY CAN END HERE)

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FUN FACTS ABOUT SHRINKY DINKS

_ Shrinky Dinks went up in the space shuttle Atlantis in 2000 as part of a first-grade science experiment. They wanted to see if a Shrinky Dink would shrink in the extreme temperature changes. It didn't.

_ Seattle hosts a Shrinky Dinks Art Invitational. It's a charity event that requires professional artists to create original work with Shrinky Dinks.

_ In 2001, students from Virginia, Tennessee and Mississippi helped to create a Shrinky Dinks Art Car that was entered in a contest in Houston. More than 1,500 students created 3-inch tiles that were used to cover the entire car. Shrinky Dinks founder hopes to sell toy business

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© 2008, Milwaukee Journal Sentinel.