Lionel and Marx were fierce competitors in the postwar, mid-century time period. But since old train tooling never dies, it just changes hands, Lionel’s connection to Marx has grown over the years. Especially in recent years.
Old Marx products found their way into Lionel’s product line when Lionel temporarily took over K-Line. But then, in 2019, some of Marx’s HO scale tooling found its way into Lionel’s revived HO product line.
Lionel and Marx’s midcentury struggles
Both companies thrived in the early to mid 1950s, as public demand for their toys proved insatiable after going without toys during World War II. But neither company had a good succession plan once their founders reached retirement age. J. Lionel Cowen’s son Lawrence lost his father’s confidence in the late 1950s, causing the elder Cowen to sell his share in the company to Roy Cohn–yes, the lawyer–and Lawrence soon followed. Cohn, suffice it to say, didn’t really know what to do with Lionel except try to slash costs. That eventually led to Lionel Corporation’s bankruptcy and sale of its train line to General Mills.
Louis Marx, in contrast, didn’t want his son to succeed him. So when he retired in 1972, he sold his company to Quaker Oats. Cereal companies buying toy companies was a big thing in the late 60s and early 70s. Neither company did well under cereal company ownership, but Marx fared worse, going out of business by decade’s end. Marx’s train tooling ended up in the hands of K-Line, an upstart rival to Lionel.
A couple of decades later, after legal action between the two companies, Lionel ended up licensing the K-Line name and product line for a few years.
In 2019, the K-Line version of the Marx 333 locomotive turned back up in Lionel’s catalog, at a price that didn’t suggest this was excess inventory. But not long after, there was more.
The connection between Marx and Lionel HO scale
Every 20 years or so, Lionel tries its hand at HO scale trains. The HO scale market is much larger than the O scale market, so it’s natural for Lionel to want in. It generally hasn’t gone well. Lionel has name recognition, but that doesn’t necessarily help. Buying an HO scale train from Lionel feels kind of like buying a Windows computer from Apple.
In 2019, Lionel tried something a little different. First, they introduced a new track system, similar to its O scale Fastrack, but connected with magnets instead of plastic clips that can break. Then, instead of going after the high end of the market like they did in previous attempts, they went low. They bought existing tooling, including some old Marx HO tooling that Model Power had been using.
Lionel hasn’t tried selling HO scale starter sets before. If this is the route Lionel ends up taking, maybe this time things will be different. Someone who buys a starter set from Lionel will probably buy locomotives and rolling stock from any number of other companies but if they like the track system, they’ll keep coming back to Lionel for track, a situation not unlike what Lionel experiences with its O gauge trains.
This may be why Marx succeeded in HO scale where Lionel didn’t. Marx tried to go get that initial sale, rather than trying to sell high-end product to established hobbyists, where the competition was established.