Educational toys bright spot in tough category

DSN Retailing Today, April 10, 2006 by Doug Desjardins

When the educational toy industry's two largest learning toy chains shut down in 2004, there was concern the sector would take a hit. The demise of Zany Brainy and Imaginarium eliminated 126 stores, and all that lost shelf space had some manufacturers worried about a slump in sales.

But when The NPD Group released its toy sales figures for 2005, those fears were put to rest. Learning and educational toys showed a remarkable resilience, posting a 5% increase in sales for the year in an industry that saw an overall decline of 3.8%.

"Shelf space is never a real issue because the industry will always find room for toys that sell," said toy industry analyst Chris Byrne. "In 2005, you had a strong core line of products with items like the V-Smile, the Leapster L-Max and interactive books from Publications International and, as a result, sales were solid."

A relative newcomer to learning toys, Publications International Ltd. has sold close to 2 million units of its Story Reader electronic book since its launch in 2003 and has two new products on the way. It bowed My First Story Reader in January--a Story Reader version for kids 6 months to 3 years--and this fall will release its Story Reader Video Plus.

The Video Plus comes with plug-and-play capabilities that project the contents of a book onto a TV screen to help kids learn to read and comes with five different learning games that test kids in letters, numbers and memory.

"Video Plus will be the biggest launch ever for us," said Kerry Cunnion, evp for Publications International. "And it's the most sophisticated product we've ever had because it's a basic Story Reader combined with platforms for animated storytelling and educational games."

Jakks Pacific is branching into similar terrain with its new TeleStory Interactive Book due for release in June. The plug-and-play book also projects a read-along book onto a TV to help kids learn to read.

LeapFrog was able to take home a raft of honors last year for its FLY pentop computer and it has three new versions coming out this summer. They include FLY Through Algebra, which features step-by-step instructions to solve algebra problems, and FLY Through Writing, which includes a writer's toolkit and thesaurus.

And it has a new learning system designed for infants less than a year old. The Little Leaps Grow with Me Learning System includes a two-in-one wireless activity controller with a control panel for infants on one side and a panel for preschool kids on the other side.