Hawkeye has been delivering Christmas cheer, awesome action, and a ton of fun nods to the comics that inspired it. Episode three was no different. Alongside a lot of references to the series it’s based on— Matt Fraction and David Aja’s Hawkeye—we also got a nod to one of the most drama-filled eras of Marvel Comics history. It was revealed this week that Clint and Kate were imprisoned in an old KB Toys. This works on a lot of levels, as the defunct toy emporium inspires nostalgia in ’90s kids. KB is also the initials of the show’s hero, Kate Bishop. But there’s something more. See, KB Toys played a vital part in the attempted revival and eventual bankruptcy of Marvel Comics. This twisty and complex story paves the road to the creation of Marvel Studios. Let’s get into it.
What Is KB Toys?
KB Toys began as an early 1920s wholesale candy store opened by brothers Harry and Joseph Kaufman. Two decades later, the pair acquired a wholesale toy store as part of a debt they were owed. They soon realized toys were much more profitable than sweets so, in 1948, they moved solely into the toy business. Calling themselves Kay-Bee Toy & Hobby (after the Kaufman Bros.), the abbreviation KB Toys was born. Acting as both retail and wholesale, the company continued as such until 1973 when they became a solely retail business. By the early ’80s, it was a thriving toy store chain of more than 200 stores with the Melville Corporation soon purchasing the company. KB’s stores became stalwarts in most shopping malls in America and the second biggest toy store behind Toys “R” Us.
Around the same time, a new toy company in the US was on the rise too, signing an “exclusive, perpetual, royalty-free license” to make toys for Marvel Comics. Many of these would go on to be released exclusively at KB Toys. That company was called Toy Biz and they too would become a major player in the battle to save Marvel Comics.
Wait, What’s Toy Biz?
Toy Biz has its roots in Canada; however, the company was reborn in the United States in the late ’80s and acquired by Issac Perlmutter in 1990. Perlmutter’s acquisition brought regime change with a focus on lowering overhead and increasing licensing efforts. The Marvel toy license, acquired the same year as Perlmutter’s takeover, was different from the standard royalty-based toy deal. Instead, Perlmutter gave Marvel a 46% equity in Toy Biz, making the two companies business partners in the truest sense.
Along for the ride was toy designer and marketer Avi Arad. Gaining 10% of Toy Biz in 1993, Arad even became an Executive Producer on X-Men: The Animated Series. This is no surprise considering the great success of Toy Biz’s X-Men toy line—$30 million in sales—in the early ’90s. Along with national outlets like Walmart, K-Mart, and Toys “R” Us, KB Toys stocked action figures of famed Marvel heroes like the X-Men, Iron Man, and Spider-Man.
Bankruptcy and the Birth of Marvel Studios
While the early ’90s saw superheroes— led by Marvel Comics’ X-Men #1—selling millions of comics and toys, the boom was soon followed by a bust. The upward trend was driven by speculation, the process of buying or even hoarding comics to simply resell them at a higher value. This was fueled by Marvel’s publishing line, which released a glut of anniversary issues and gimmick covers. Ronald Perelman, who had purchased Marvel in 1989 for $82.5 million, was responsible for policies that led to speculation and put comic book retailers at great risk.
As sales of collectibles like comics and trading cards began to dive in the mid-’90s, the toy business was doing much better with KB Toys and Toy Biz raking in cash from Marvel characters. So in 1993, Perelman came up with a plan to create Marvel Films studio to license and make Marvel movies. Toy Biz’s Arad became the President and CEO of the burgeoning studio that same year. Marvel Films’ first foray was into animation with Arad’s involvement in the aforementioned X-Men cartoons, which eventually led to him securing a deal for the future Fox X-Men film series.
However, this wasn’t quite enough. It would take a bankruptcy filing in 1996 (the same year KB Toys cleared $1.1 billion in sales) and a takeover for the fledgling studio to take off. In this same year, Marvel Films Animation was sold to Fox with an agreement to license certain characters for different animated series. Arad (alongside Jerry Calabrese) began packaging and licensing Marvel characters to major studios like New Line Cinema, including a seven-year deal with Fox for Marvel movies. This was a savvy business move for a recently bankrupt company. But this, unfortunately, meant Marvel no longer had film rights for many of its characters. Nevertheless, through a complicated series of corporate maneuvers and stock offerings, Marvel Films was incorporated as Marvel Studios in 1996.
The Battle for Marvel Control
As chronicled in the brilliant Comic Wars by Dan Raviv, the corporate fight to take control of Marvel during this bankruptcy era was nasty. Perelman’s ownership was challenged by Carl Icahn, a high-rolling investor. He didn’t believe the film studio was a good idea. Icahn even managed to briefly take control of Marvel in 1997 before a surprise victor emerged that same year: Toy Biz.
The two men behind Toy Biz, Isaac Perlmutter and Avi Arad, purchased Marvel and installed KB Toys CEO Alan Fine as CEO of the company’s Toy Biz division. Over the next few years the thrifty ways of Toy Biz, the powerful marketing of Arad, the installation of new Marvel EIC Joe Quesada (who co-created Hawkeye character Echo!), and Perelman’s film studio would create something game changing.
Marvel Studios Takes Flight
In 1998, the first-ever Marvel Studios film Blade hit screens. Taking a lesser known character and putting him at the forefront of a grounded Hollywood blockbuster made the movie a huge success. Blade became the spark, with the Fox X-Men movies (2000-2006) confirming that superhero films could rake in the cash.
In 2003, Arad and Perlmutter met with a producer called David Maisel. He pitched the idea of Marvel making more money from their own movies. Of course, his pitch led to him assuming a leadership role at the studio. The following year, Maisel organized a now-infamous deal with Merrill Lynch. The bank would put up the money for any Marvel movie up to “$165 million as long as it was rated PG-13.”
Marvel Studios wouldn’t have to front any money, but the rights to its characters were the collateral. And it would pay off massively. In 2005, Marvel regained the rights to Iron Man from New Line Cinema. They also got the ability to make Hulk films from Universal in 2006. The rest, as they say, is history. In 2008, Iron Man and The Incredible Hulk would release, beginning the Hollywood juggernaut known as the Marvel Cinematic Universe.
What Happened to KB Toys and Toy Biz?
Meanwhile, KB Toys fortunes had reversed. The once-mighty toy juggernaut of shopping malls across the country had been gutted by a Bain Capital takeover. KB Toys filed for bankruptcy in 2008, the same year Marvel Studios scored two massive hits with its first two films. Former KB Toys CEO Alan Fine had long moved on, of course, to higher roles at Marvel.
While the man who owned Toy Biz now owned Marvel, Toy Biz no longer produced Marvel toys by this point, with Hasbro now Marvel’s official toy licensor. The Toy Biz branding officially ended in 2006, with the division rebranded as Marvel Toys and shuttered soon after. Perlmutter is still with Marvel as a chairman while Arad continues to produce Marvel films, including Sony’s Spider-Man films. Marvel Studios, of course, lives on.
So yes, what seemed like a little nostalgic Easter egg is actually connected to one of the most tempestuous yet ultimately game-changing eras of Marvel history. Isn’t that cool?
Featured Image: Marvel Studios