(Reuters) – Two years ago, popular American singer Lady Gaga and others posted the stuffed toy “Squishmallow” on the video-sharing app TikTok. The manufacturing company last year came under the umbrella of Warren Buffett’s business empire.
Squishmallows, which are popular for their chewy texture and cute design, are produced by Jazzwares. Owners Judd and Laura Zeversky had no idea the stuffed toy company would be successful when they met in law school at the University of Miami 33 years ago.
The two married in 1993 and pursued a career in law, but Mr. Judd quickly realized that it wasn’t his nature. Four years later, he founded Jazzwares and became CEO.
“I really liked pop culture since I was a child.” Buffett’s investment firm Berkshire Hathaway held an annual shareholder meeting earlier this month in Omaha, Nebraska, and Judd gave an interview.
“I love comic books and toys, and I’m not very good at making them myself,” said Judd. “When I told my wife, ‘I want to make toys,’ she said, ‘You should follow your dreams,’ and I did.”
In 2005, Laura quit her job as a litigation attorney to join her husband’s business and become president.
Jazzware’s annual sales will surpass $1 billion in 2021, about 40% of which will be Squishmallows, which have sold over 100 million units. The rest of its revenue comes from its own brands and the licensing of external brands such as Fortnite, Pokemon and Star Wars.
Berkshire bought insurance holding company Allegheny, the parent company of Jazzwares, for $11.5 billion last October.
“Jazzwares is a gem, and Judd and Laura are ideal managers for Berkshire,” Buffett said in an emailed statement.
At a Berkshire shareholder meeting sales event, 10,000 squishmallows modeled after Buffett and his longtime partner Charlie Munger were so popular that they sold like hot cakes. Not long after, some of these were auctioned on the eBay site for more than $500 each.
Born in 2017, Squishmallows became a business of Jazzwares when it acquired the toy company.
The Zeverskis were convinced of the popularity of the stuffed animal, but initially struggled to sell it to the masses.
There are now over 2,000 types of Squishmallows, each with a name, date of birth (Squish Date), and story.
“I thought it was a brand that deserved a lot of love,” said Judd. “It really hits the spot. If the toy industry can create a product that hits the spotlight, it wouldn’t be strange for something amazing to happen,” he said.
In 2014, the Zebarskis sold a portion of their Jazzwares stake to Allegheny to expand their business, and the company acquired a majority stake two years later.
Allegheny is led by Joseph Brandon, who previously ran General Re, a reinsurance company owned by Berkshire. Allegheny is now backed by Mr. Buffett’s strong balance sheet.
“Joe[Joseph]told me that our lives would be so much better because we had partnered with the most respected company in the world, the best company in the world,” said Judd Zeversky. rice field.
The couple now report to Berkshire vice chairman Greg Abel, who Buffett has named as his successor.
“Greg is the Berkshire business model we’ve learned to operate in. Let us run it and do it the way we think is best,” Laura said.
Jazzwares products are mainly produced in China, and have expanded production bases to Vietnam, Cambodia, and Indonesia. The cost of production in the US is too high.
Judd said the company is also considering branching out into the “ancillary” business of toys such as costumes.
In a rapidly changing world, it’s curiosity that determines where to go next, Judd said. “When you think you’ve reached the top of the mountain and lost your curiosity, the company starts to fall,” he said.
(Reporter Jonathan Stempel)
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