A real toy story

Entrepreneur, Sept, 1997 by Gayle Sato Todder

Russ Berrie is still swinging. That's how he knows he's successful - not because his Oakland, New Jersey, gift and novelty firm, Russ Berrie and Co. Inc., posts more than $375 million in annual sales. And not because he's masterminded some of the best-selling gift items in popular memory, ranging from that little plastic statuette from the '60s who, with his arms outstretched, proclaimed "I love you this much!" to, more recently, the troll doll, which enjoyed a formidable comeback in the early '90s. With its top-rated line of baby gifts and accessories, its nostalgic "Bears From the Past" teddy bear series, and a menagerie of other familiar gift items, Russ Berrie and Co. enjoys more than its share of major hits.

Berrie, 64, is understandably pleased with these accomplishments. But it's the longevity of his 34-year-old company that pleases him most. "There are not many companies around today that were here in 1963," Berrie says. "In this business, things are always changing, but we're still around. And it's been fun every step of the way," even though it hasn't always been easy.

In a consumer environment where entertainment tie-ins and mammoth advertising campaigns seem to dominate, Russ Berrie and Co. rides trends the old-fashioned way - by tracking customer interests and responding to them. It is not an exact science. "I'm not going to say to you that every product we've made has done well," Berrie admits. "But batting average is really not the question. It's making sure you get the right hits at the right time and, of course, whether or not you win the game."

* THE EARLY DAYS

Above all else, Berrie seems to love the entrepreneurial game. His career began at age 10. A middle-class kid from the Bronx, Berrie loved baseball - and found a way to profit from it. "I'd go to Yankee Stadium after the games and pick up discarded score cards," Berrie explains. "I'd clean them up [by erasing the pencil marks and smoothing the wrinkles] and take them back the next day and sell them for 10 cents."

Humble beginnings, yes, but he was profitable at it. In fact, jokes Berrie, "I've been trying to match that gross profit margin ever since."

At 11, he developed his own newspaper delivery route, distributing his papers from a borrowed baby carriage. He did odd jobs, worked as a delivery boy, and was even an amateur bookie for a brief time. After high school, he attended college and did a stint in the military. But he never had the patience to finish his degree. "I was eager to make an honest man of myself," Berrie says.

His first job after college, at age 23, was selling toys for a now-defunct Chicago toy company. Here, Berrie found his calling. Within a year, he branched out to become a manufacturer's representative, working for five toy and novelty firms on straight commission.

The entrepreneurial structure of being a manufacturer's rep suited Berrie, but in the end, it wasn't entrepreneurial enough. "I would bring [the manufacturers] certain suggestions as to products I thought would sell, and I was frustrated that they didn't really show an interest," he says. "By 1963, I'd been doing this for about seven years. I had experience, and I knew people who could make products for me. So I continued to work as a manufacturer's rep, but I also invested $500 in some products and rented a converted garage." Russ Berrie and Co. was born.

Berrie's first products were primarily basic toys and impulse gift items such as wind-up gadgets and Indian dolls he purchased from various manufacturers.

Early sales didn't require much extra effort. "I would see my customers and sell them the lines I was representing. Then I'd take out the half-dozen or so different items I had [in my line]," Berrie recalls. With a local teenager's help, Berrie would pack orders and type invoices in the evenings. Orders may have only averaged between $70 and $100, but they added up: Between August and December 1963, Berrie generated a healthy $60,000 worth of sales.

* GET THE MESSAGE

Over the next two years, sales mushroomed to $250,000 in 1964 and $750,000 in 1965. By then, Berrie was ready to give up his rep job and become a full-time enterprise, moving out of the garage and into a tiny bedroom office in his apartment. He had a part-time secretary, a bookkeeper, a handful of independent reps and a stable of products with potential.

Like what? Berrie's goods were largely novelties sporting cute messages. "We developed a product called Fuzzy Wuzzies. They were little sheepskin characters on a wooden base, and they said 'Happy Birthday' or 'I Love You,' or [a variety of other messages]," Berrie recalls. "We also did Loving Cup trophies that said 'World's Greatest Lover' and 'World's Greatest Wife,' and so on."

Message novelties proved to be a lucrative niche in the not-yet-liberated '60s. "They were like three-dimensional greeting cards," says Berrie. "Only these were items you would keep." In an era when self-expression was fairly subdued, sweet little novelties that could convey love or appreciation were real commodities.