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Kipps Brothers still evolving after 125 years

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Walk through the Kipp Brothers showroom and you’ll find the makings of one heck of a birthday celebration: gag gifts galore, endless sugary treats and headgear that puts the traditional party hat to shame.

Such seemingly frivolous items might be business as usual for the Carmel-based novelty distributor, but it’s no laughing matter—not when annual revenue surpasses the $7 million mark. That’s a lot of whoopee cushions.

“We’ve been providing giggles and smiles for 125 years,” quipped company President Bob Glenn.

Founded in 1880 in downtown Indianapolis, Kipp Brothers has endured unstable economies, rising prices and changing technology over the years, all the while remaining surprisingly the same. Original products such as wooden milk bottles and carnival hoops are still being sold, but the company's survival instincts have been just as persistent.

Indeed, enduring 125 years hasn't been a cakewalk. Even now, as the business celebrates a milestone year, its owner is looking for ways to expand and target more diverse markets. "We're not in the necessities business," Glenn said.

German immigrant brothers Albrecht and Robert Kipp opened the store to sell fireworks and items imported from their native country. They sold it in 1939, when World War II prompted a suspension in German exports. New owner Leon Levin shifted the focus toward carnival supplies and novelty toys.

Glenn—who worked as an assistant to Levin's son-in-law when he ran the business—bought the company in 1999 after 18 years as an employee. Keeping with the family business tradition, Glenn's sons Jason and David also work there.

It didn't take long for Glenn to make his mark. In 2001, he moved Kipp to Carmel, giving the company twice the warehouse space and a larger, air-conditioned showroom.

Flamingos to flying pigs

From wind-up chattering teeth and water guns to wizard hats and inflatable flamingos, the Kipp Brothers catalog boasts more than 4,000 novelties. Some items have remained in the product list since the early years, but the company is always looking for ways to keep things fresh.

"This past year, we added 700 items and eliminated 350 old items," Glenn said.

Kipp imports 95 percent of what it sells from overseas. Glenn and usually one other employee travel to China and Hong Kong twice a year to choose new items, spending a total of five to seven weeks on the road.

"In our buying process, to say we see 3,000 to 5,000 items a year would not be an exaggeration," he said.

A five-person committee—Bob and David Glenn among them—choose from about 1,000 items selected during buying trips.

"We look at them, try to play with them, and try to break them," Bob Glenn said.

Among the factors they consider: quality, value, color, price, safety and what would be "new" for children. Yo-yos, for example, have had an up-and-down cycle over the years as younger generations discover the toy.

As for choosing the new successes, Glenn said he has no crystal ball.

"There is no one item that will make us rich or make us poor," he said. Sometimes promising items flop; other times, surprise items emerge as top sellers.

A recent rising star is the flying pig hat, an adult-size cap made of pink velour. Pull the strings below your chin and the pig perched on your head flaps its wings. "I thought, 'Now this is kind of goofy,'" Glenn recalled of his first impression. The distributors wanted Kipp to purchase a minimum 1,000 hats. Unsure of its selling power, Glenn talked them down to 500. "I wish we had bought 15,000," he said, because Kipp can't keep the $3.75 hat in stock.

All in the family

Kipp has 80,000 customers nationwide, distributing hundreds of thousands of catalogs and taking orders over the Internet or by phone. Local shoppers can browse the showroom and take home their goodies the same day.

Customers buy the inexpensive toys—some bulk items are as cheap as 3 cents apiece—for schools, churches, parties and redemption centers like those found in arcades.

Schools are Kipp's biggest customer group, followed by churches.

"A majority of our customers are repeat customers," Glenn said.

One such frequent client, Mary Scholl, attributes the company's success to its selection and quality of items—and Scholl knows toys. She orders from Kipp to stock the gift shop at her Beaver Island Toy Museum in Michigan.

"They have such a nice sense of taste," said Scholl, a 25-year Kipp customer. "It's never offensive."

Scholl said she appreciates that Kipp continues to sell durable items fashioned from metal and wood—a favorite being the wooden toy trains.

"They have some of the most intriguing toys," she said. She also raves about the customer service.

Kipp Operations Manager Jerry Butler said the company has excellent customer service because of its longevity—not to mention its stable of longtime employees.

"It's a good place to work," said Butler, a 23-year employee. "It's a family-like environment."

Literally. Butler's wife, sister, son, brother-in-law and cousin are all current employees, and his daughter and two brothers are Kipp veterans.

Survival of the funniest

So how does a company selling magic tricks and wood popguns stay afloat for 125 years?

"Kipp Brothers' sustainability is directly related to its unique position in the marketplace," said Roland Dorson, executive vice president of the Greater Indianapolis Chamber of Commerce. "They are the center of the universe for chotchkes."

Dorson also credits its focus.

"They are a well-managed company," he said. "They know exactly what their business is and who their customer is."

Maria Weiskott, editor of trade publication Playthings, said the novelty toy business is as strong as ever. "It transcends trends," she said.

Even so, she is impressed by Kipp's staying power.

"I think that's phenomenal," Weiskott said. "It shows how far impulse buying and gag buying goes."

Still, the business has had to move with the times. Butler said one of the biggest changes he's seen has been improved technology.

Kipp uses a computerized inventory system to keep track of items in its warehouse. Until its 2001 move, the company still used a paper inventory card system.

The company also has had its ups and downs due to an unstable economy. Increasing gas and plastic prices are now causing concern.

Glenn said Kipp is placing orders now for all of next year hoping to beat price hikes.

"Since 9/11, our business has changed quite a bit," he said, adding that it has been more up and down.

Company leaders looked for ways to cut expenses, which hasn't always been painless. Out of options in January 2003, Kipp laid off four employees; it now has 42 full-time and 10 part-time workers.

125 more candles to come?

As Glenn looks to guide Kipp toward its next milestone, he said he has considered opening satellite storefronts once business stabilizes.

In the nearer future, a 24,000-square-foot warehouse expansion will open by early November. Glenn plans to lease out the new space; the company already rents 20,000 square feet to four tenants.

Glenn added moonwalk rentals to the store's repertoire two years ago in another effort to increase revenue. He hopes to offer party-game rentals, too.

And more changes are on the horizon. Glenn added a director of outreach and Hispanic marketing this month, hoping to tap that growing market.

Glenn hopes central Indiana takes notice.

"It's incredible how many people after 125 years still don't know we exist," he said.

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