Boosting Sales Is No Game to LeapFrog

In the first half of this decade, sales were skyrocketing for LeapFrog SchoolHouse—a division of LeapFrog Enterprises Inc. and publisher of interactive, research-based assessment and curriculum content for the PreK-8 education market. The Emeryville, Calif.-based company saw a boom in net sales from $8.8 million in 2001 to $55.2 million in 2004. In 2005, however, the company faced some hard (and controversial) times, and its sales began to drop.

Last winter, LeapFrog SchoolHouse made a number of changes to get the company back on a growth track, including restructuring the organization, hiring a new president and focusing on its strongest segment within the division—PreK-5 literacy. While it’s still early in the transition, the company’s plans for 2008, new partnerships and its recent receipt of a major industry award for quality and innovation suggest that it’s headed in the right direction.

The Growth Years

Mike Wood and Bob Lally founded educational toy company LeapFrog Enterprises Inc. in 1995. Four years later, they launched the LeapFrog SchoolHouse division, after requests from educators to customize LeapFrog’s award-winning technology and products for the classroom.

A new, school-oriented line was developed, called “Leap Into Literacy,” with its core LeapPad platform—a toy that could hold various electronic, interactive books. The device enabled children to use an electronic pen to point at words or letters, and the LeapPad audio system would produce the corresponding sounds. When LeapPad was launched, there were just a few books, but by the turn of the century, there were more than 30 titles in the line.

LeapPad made LeapFrog Enterprises a force to be reckoned with, as its sales jumped from $160 million in 2001 to $680 million in 2003.

In 2003, the LeapFrog SchoolHouse division experienced an 86-percent net-sales increase compared to the previous year, which helped establish it as the fastest-growing K–12 instructional software publisher, according to Simba Information’s “Electronic Media for the School Market 2003–2004” report. The division’s net sales of $37.4 million that year were a result of the growing success of its core products, including the Ready, Set, Leap! program, the English Language Development program, the LeapTrack Assessment & Instruction System, The Literacy Center and a growing library of LeapPad books.