Traditional toys make muted noise: Lack of must-have new entries keeps classics burning bright - Lehman Brothers predicts slow sales for toy stores - Industry Overview

DSN Retailing Today, Oct 7, 2002 by Molly Prior

NATIONWIDE DSNRT REPORT -- Toy retailers don't take too kindly to risk, especially when faced with another challenging holiday outlook. Yet even though analysts' initial holiday forecasts for the hard lines sector as a whole are lukewarm, with firms such as Lehman Brothers predicting sales to ramp up a mere 2% to 3%, most toy retailers that spoke with DSN Retailing Today said they expect to pass the low 3% threshold quite easily.

Getting there, however, will require strong sales from toy lines that have been in the market for a year or longer--as the industry is facing a dearth of exciting new products. So it comes as little surprise many of the toys that made the industry's short list this year are already familiar to both risk-adverse retailers and consumers.

The head-turning Brats pack collectively earned a spot on Toy-Cast 2001. This year, with 10 million Bratz dolls sold since their June 2001 launch, the fashionistas landed the top spot with Bratz Stylin' Salon 'N' Spa by MGA Entertainment. The deluxe playset includes every luxury needed for a day of beauty, including a hair salon, cosmetics counter, manicure and pedicure station, beauty Jacuzzi, and smoothie and cafe bar. And if that wasn't enough to delight little girls, the newest Brats doll, Dana, donned appropriately in a bath robe and salon slippers, comes packaged inside the Brats Stylin' Salon 'N' Spa.

Like the Bratz, Lego Harry Potter also is no newcomer to the elite Top 10.

In the weeks before the holiday 2001 selling season ended, the only chance parents had of scrounging up a Harry Potter Hogwarts Castle by Lego was on eBay. Hogwarts Castle remains a top seller for the Lego Company, and the toy maker anticipates this year's introductions, such as the Chamber of Secrets and Dumbledore's Office, will match the castle's stellar sales performance.

Despite the pool of familiar toys, such as Bratz, Lego Harry Potter and, of course, educational toy manufacturer LeapFrog--darling of the industry for three years and counting-a handful of new, truly innovative toys promise to stir up added excitement this holiday. And by the end of the season, one of these newcomers could potentially be dubbed the Holy Grail of holiday 2002.

Razor USA's new wheels coast along the retro trend with this year's launch of a sleek, completely re-engineered Big Wheel of sorts. However, unlike its plastic predecessor, the Scream Machine is a BMX-quality, steel-framed three-wheeler made for tough, fast and, most important, safe riding. "Kids' eyes grow wide at the sight of the Scream Machine. After experiencing its super speed and skid-outs, they're bulging," said Razor USA president Carlton Calvin. "This is one of the coolest products Razor has ever introduced."

If cool is a prerequisite for a standout toy this holiday, then Spin Master Toys' Air Hogs Helicopter promises to send parents scrambling to retailers' toy shelves before the last of the 'copters take off. With simplified controls and a launching pad, the Air Hogs Helicopter can reach heights up to 100 feet and travel distances of 300 feet. Its $69.99 price point offers an affordable alternative to hobbyist radio- controlled planes, which often cost upwards of $500.

Several trends, albeit mixed well within the familiar and new this holiday, also have gained momentum this fall.

The '80s nostalgia trend picked up steam this year, opening the door once again for properties of yesterday, such as Care Bears, Cabbage Patch Kids, Strawberry Shortcake, He-Man and Transformers. Care Bears made their grand exit from hibernation in July at Toys "R" Us Times Square in New York City. The bears, namely Cheer Bear, Tenderheart Bear, Funshine Bear and, new this time around, Share Bear, mingled with parents and kids among the newly launched Care Bears plush toy line by Play Along Toys.

Greg Staley, president of Toys "R" Us, said entertainment properties, such as Care Bears and Cabbage Patch Kids, now exclusive to Toys "R" Us, do well because they resonate with young mothers who fondly remember the characters from their own childhood.

Dr. Stevanne Auerbach, known as "Dr. Toy," said, given the tough year Americans have been through, parents--seeking comfort and perhaps somewhat of a "security blanket"--are turning to toys they are familiar with.

The comeback toys have inspired a slew of anniversary promotions for toys returning from a hiatus in the marketplace, along with those that never left. At the start of 2002, American Greetings launched a hefty $10 million marketing campaign to celebrate Care Bear's 20th anniversary.

Matchbox kicked off a 50th birthday tour in April that lasted through the summer, with stops in select Kmart and Toys "R" Us stores across the country. Hasbro's Mr. Potato Head marked his big 5-0 with a gathering of industry bigwigs in New York City last February. Hasbro's chairman and ceo Alan Hassenfeld and artist Jim Davis of "Garfield" fame were on hand, among others, to sing "Happy Birthday" and kick off a year-long national "50 Years of Smiles" promotion in partnership with Operation Smile, a not-for-profit medical services organization. By year's end, Mr. Potato Head is expected to attend birthday parties in his honor at 250 Wal-Mart stores.