For over 125 years, the name Lionel has been synonymous with toy trains. The storied American manufacturer, founded in New York City, has changed hands more than a few times over the years. As Round 2 prepares to acquire Lionel, LLC, and create the Lionel Brands Group, let’s take a look back at the history of Lionel Trains ownership.
The Cowen Era (1900-1959)
Joshua Lionel Cowen, born Joshua Lionel Cohen in Queens, New York City in 1877, co-founded the Lionel Manufacturing Company with his associate Harry Grant in 1900. The company was established near City Hall in New York City.
Cowen’s path to toy trains began with inventive pursuits. In 1899, he received his first patent for a device that ignited a photographer’s flash and secured a $12,000 defense contract from the United States Navy to produce mine fuses. According to some accounts, he devised a battery-powered fan for his shop and then connected the fan’s motor to a small model train. Other sources suggest he designed his model train after seeing a stationary model train in a department store window.
A Manhattan shopkeeper bought Cowen’s first electric train in 1901, using it as a storefront display. When customers indicated they wanted to buy the display, the shopkeeper bought six more trains—and a business was born.
By the end of World War I in 1918, Lionel had become one of the top manufacturers of electric toy trains in the United States, competing with American Flyer and Ives. Cowen’s son Lawrence joined Lionel’s board of directors in 1937, continuing the family tradition. As a youngster, Lawrence had appeared as “The Happy Lionel Boy” in catalogs, packaging, and sales materials.
Lionel reached what some enthusiasts regard as its peak in the early 1950s, becoming the world’s largest toy manufacturer while earning record profits.
The Cowen family era came to an end in 1959, when Joshua Lionel Cowen and his son Lawrence sold their shares to an investment group headed by Roy Cohn, Cowen’s grand-nephew.
The Decline and Transition (1960-1969)
The 1960s proved difficult for Lionel. Without its founder’s guidance, the company struggled to find its direction. In a doomed effort to diversify, the company introduced slot cars, science kits, and even juvenile phonographs. Former U.S. Army General John Medaris became president of Lionel in 1960, but the company could not reverse its fortunes.
Joshua Lionel Cowen passed away on September 8, 1965, at the age of 88 in Palm Beach, Florida. Just two years later, in 1967, Lionel filed for bankruptcy. In 1969, the company licensed its electric train manufacturing to General Mills, the breakfast-cereal conglomerate, marking the end of Lionel’s existence as an independent corporation.
The General Mills/Fundimensions Era (1970-1986)
By the 1970s, what remained of the original Lionel Corporation had become a holding company specializing in toy stores. The Lionel name was leased to Minneapolis-based General Mills, which had also acquired other toy companies, such as Parker Brothers, Kenner, and Model Products Corp (MPC).
By 1973, Lionel was folded into the General Mills subsidiary Fundimensions, which carried on the Lionel tradition with the slogan “Not Just a Toy, A Tradition.” Manufacturing had by then been moved from New Jersey to Michigan.
However, the relationship between Lionel and General Mills was not without difficulties. In 1982, General Mills decided to relocate the Lionel factory to Mexico, a move that proved disastrous. Production eventually returned to Michigan in 1984.
In 1985, General Mills sold its toy divisions, with Lionel being absorbed by Kenner-Parker.
The Richard Kughn Era (1986-1995)
In 1986, Detroit-based real estate developer and toy train enthusiast Richard Kughn bought the brand and established Lionel Trains, bringing an ownership with genuine passion for model railroading. Under his leadership, Lionel experienced a renaissance.
In 1992, Kughn partnered with rock musician Neil Young, an avid model railroader, to create Liontech, chartered to develop exclusive new model train control and sound systems. This collaboration produced RailSounds II™, which debuted in 1994. The all-new digital system captured a real-life locomotive’s actual sounds, propelling Lionel to the forefront of model train technology.
Richard Kughn sold Lionel in 1995 to Young and Wellspring Associates LLC, an investment firm.
The Digital Era (1995-Present)
Following Kughn’s sale, Lionel continued to innovate and evolve. In 1996, the company issued its first fully illustrated catalog in more than 30 years. The Lionel Century Club, announced in 1997, inaugurated activities celebrating the company’s first hundred years.
The new millennium brought significant changes. In 2000, Lionel celebrated its centennial by introducing the 24-karat gold-plated 700E J1e 4-6-4 Hudson steam locomotive. That same year, the company moved its 100 years of American manufacturing to Korea and China to remain competitive.
In 2004, Jerry Calabrese joined Lionel as President and Chief Executive Officer. In 2006, Lionel received the K-Line brand of toy trains as the result of a court case, though K-Line was discontinued in 2010 due to declining sales. Also in 2006, corporate headquarters moved from Chesterfield, Michigan, to New York City, just a few blocks from the founding location in 1900.
The 2010s saw further corporate restructuring. In 2013, Howard Hitchcock was appointed General Manager of the combined companies, and the following year he was named president of Lionel LLC. Also in 2014, Lionel shut down its offices in New York City and moved its global headquarters to Concord, North Carolina.
The Latest Chapter
The most recent development in Lionel’s ownership history came with an announcement that Praesidian’s portfolio company, Round 2, intends to acquire Lionel, LLC. According to the announcement, as the transaction progresses, the companies will come together as the Lionel Brands Group.
The companies have stated they are aligned around a shared vision to build a stronger, fan-first platform that supports the brands, communities, and partners that have made each company successful, while creating new opportunities to grow over time.
This acquisition marks a significant development for the Lionel and the toy train industry, adding another chapter to a famous American business with a history spanning 125 years.
