Global Courant
An image of Warren Buffett at Berkshire Hathaway Shopping Day, May 5, 2023.
Yun-Li | CNBC
Shrewd business legend Warren Buffett has a whimsical side, buying companies whose products he personally enjoys, such as Dairy Queen and See’s Candies. Now count cuddly phenomenon Squishmallows.
Squishmallows made it Berkshire Hathaway debut of this year’s annual meeting in Omaha, Nebraska, with shareholders picking up 10,000 cozy dolls in the space of hours, including dolls modeled after the “Oracle of Omaha” and his longtime business partner Charlie Munger. Berkshire inherited Squishmallow’s parent company Jazwares through its acquisition of Alleghany in the fourth quarter of 2022.
Jazware’s founder and president, Judd and Laura Zebersky, now report to and interact regularly with Greg Abel, Berkshire’s vice president of non-insurance operations and Buffett’s successor. The South Florida-based couple, who went on to become lawyers and toy entrepreneurs, said they are excited to be under the Berkshire umbrella and enjoy the autonomy of running their own businesses.
“It’s a great structure. We love being a part of it,” said Laura Zebersky in an interview. “It’s better than we could have ever imagined and it’s phenomenal to be around the greatest leaders in the world, and it’s also something we’re interested in exploring the synergies.”
The 92-year-old Buffett recently sang Abel’s praises, saying he has taken on most of the responsibilities. Abel has overseen much of Berkshire’s sprawling empire, including energy, railroads, and retail.
While Buffett only got into Jazwares indirectly through Alleghany, he has shown a willingness to invest in much smaller companies that don’t have the weight to move the needle in terms of Berkshire’s massive earnings and earnings. Buffett often admires the company’s management and expects it to continue to grow and remain profitable.
Zoom in IconArrows pointing outA whopping 100 million Squishmallow units — with prices ranging from $5 to $30 — were sold last year alone. Laura Zebersky said the pandemic accelerated Squishmallows’ growth. Endorsements from celebrities from Kim Kardashian to Lady Gaga on TikTok also helped.
“The idea of having something that was nurturing, cozy, cuddly, affordable and accessible. Instant gratification,” Zebersky said. “We really touch on all walks and areas. So it was really interesting to see that it’s not just kids, it’s also adults. Our demographic is very wide and broad and it’s very unusual in our business to have that.”
In April 2020, Jazwares bought toy maker Kellytoy, who created the Squishmallow brand in 2017.
No flame in the pan
To maintain Squishmallows’ success, Jazwares is aware of oversaturation and tends to be highly selective in partnerships, Zebersky said. The plush toy brand has accounted for 40% of Jazwares’ total sales over the past two years.
“We’re in year six of the brand … it’s not a flash in the pan,” Zebersky said. “It’s growing smartly and sustainably. We make sure we limit the amount of production. We make sure there’s something different for each sales channel, there’s collectability, there’s unique styles, unique sizes.”
Squishmallows recently announced a partnership with McDonald’s Happy Meal, which will take place in 70 different countries by 2023.
Zoom in IconArrows pointing outLast month, Jazwares attended VidCon in California, an annual convention for content creators and online brands. The company had a pit filled with a sea of Squishmallows for visitors to jump into.
“We don’t do traditional marketing. We are where our fans are. And a good example of that is VidCon, the largest gathering of influencers,” Zebersky said.
Squishmallows is an intellectual property of Jazwares, but the company also sells products with licensed partnerships with disney, WWEPokémon, etc.
How toy sensation Squishmallows joined Warren Buffett’s conglomerate
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