It was a heady time for Mego. The company was making a giant leap after almost 2 decades as a small toy distributor in the dime-stores and discount shops across the country.
The learning curve proved to be quite steep. Their first foray into major television advertising was nearly fatal. They were sued by Hasbro. Simply getting products made in Asia was difficult enough; Getting them made correctly took years...
Mego had a few things going for it, however. A young and ambitious management team, the right connections with licensing agents, and solid experience with polyester knits.
It's true. Mego's trading agent in Hong Kong was Lion Rock Trading, and one of Lion Rock's many ventures was producing and importing ladies undergarments and 70's LEISURE suits to Britain. This proved beneficial when it came to producing fabric costumes for their dolls and action-figures. It also explains why it can be difficult to find matches for Mego materials today. Megos were made with cutting edge 1970's fabrics that for some reason have fallen out of favor today....!
They were further connected with the production routes for tooling and molding plastic. For several years the company did not own it's production facilities in Hong Kong, but instead contracted to have goods produced. While this system had it's drawbacks in terms of how much control Mego had over production, it was very successful for a number of years. Mego finally opened a state of the art factory in Hong Kong in 1977-78, only to see interest rates hit 21%, thus exacerbating the problems that would eventually shut the company down.