Retailers seek next 'Elmo' to boost '97 toy sales

Discount Store News, Feb 3, 1997 by Laura Liebeck

Licensing continues to hang tough in the toy industry, with major merchandise presentations expected this year around such movies as "Jurassic Park," Star Wars," "Batman and Robin," "Hercules" and "Anastasia."

Other popular licenses for the year will doubtless include Teenage Mutant Ninja Turtles, in the midst of a revival and a new live-action TV show, and possibly Power Rangers, which morph this year into turbo form with the backing of a new live-action movie to be released in March.

With the release of the new "Jurassic Park" movie, dinosaur goods should be popular from a variety of manufacturers, including Kenner and Lego.

Video game sales should be impressive, too, as sufficient stock of Nintendo N and other platforms fill shelves, perhaps giving retailers a mid-year sales and earnings blip due to unfulfilled demand from Christmas. Even Tickle Me Elmo and its 1997 line extension -- Tickle Me Ernie, Big Bird and Cookie Monster - should continue to produce impressive sales as pent-up demand for the furry red character and Ids friends keeps customers visiting toy departments for months to come.

While Christmas 1996 was not the standout many had hoped for, sales gains should still be in the 4% to 6% range overall, pushing total industry sales to about $21 billion, up from $20 billion in 1995.

A number of toy manufacturers did exceptionaly well in '96, including Lego, said company spokeswoman Katherine Lee. Lego, said company 10% consumer sales increase in '96 and in '97 will offer 103 products -- its largest selection every -- of which 60% will be new, as compared to 30% of last year's line. And Tyco, which-found that its original supply of 400,000 Elmos wasn't enough -- and would produce more for a total of 1 million dolls -- will offer the next generation of the doll with its new Sing 'n Snore Ernie. Ernie comes dressed in pajamas and a sleeping eye mask. As he snores, his belly moves up and down. With the press of one hand, he singing "Twinkle, Twinkle Little Star" as he falls asleep and snores. By touching the other hand, he says, "I feel much better."

While Nintendo 64, Tickle Me Elmo and Holiday Barbie grabbed headlines as the hot products of the '96 holiday season, other toys sold well, too, including Olympic Gymnast Barbie and Pet Doctor Barbie, Lego, Power Wheels and Melanie's Mall, plus toys bearing the licenses of Space Jam, 101 Dalmatians, Goosebumps, Toy Story, Looney Tunes the Disney characters and Star Trek, among many others.

"Parents want basic toys; they always do," said Marianne Szymanski, president of Toy Tips, Milwaukee. "They want Play-Doh, Lego, Matchbox cars. All the rest is media hype."

Despite sales reports that showed some retailers failed to make their plan for '96, others did. Some retailers, including Kay-Bee Toys, now a division of Consolidated Stores, did particularly well during the holiday selling season recording impressive sales gains from a broad assortment of basic toys.

Toys "R" Us, the nations largest toy chain, recorded flat sales overall for Holiday '96, but video game hardware and plush, especially Tickle Me Elmo, was very strong, as was Toy Story merchandise and Star Wars products, said Michael Goldstein, vice chairman and ceo. Star Wars will be a very strong program for Toys "R" Us this year, Goldstein added, noting that beginning in late January the toy retailer launched a Star Wars shop in its toy stores. "Its a very exciting presentation with lights and sound,, said Goldstein.

Similar programs for other licensed properties will be in-store for later in '97, although he would not identify the licenses or divulge any details of those future programs.

Goldstein is awaiting the merchandise shipment of Nintendo 64, which he feels will be a home-run program for Toys "R" Us throughout '97. Other systems, such as Sony Playstation, also should do well.

A merchandiser of a regional discount store chain said that for 1997 he "doesn't want to get caught up in the `Jurassic Park/Batman, hullabaloo. We need to look for additional merchandise that sells everyday."

This retailer, who asked not to be identified, recorded a double-digit sales increase in toys in '96. "We've accomplished a good part of our mission statement, which was to make our toy department a destination department," he said. The merchandiser added that many products did well in his stores, including 101 Dalmatians products, TV dolls, board games, Lego, pre-school, Barbie, collectibles and die-cast cars, in addition Tickle Me Elmo. For '97, he said Hercules merchandise will be a big seller as will Batman and Star Wars, which he hopes will not get "overexposed."

In the short run, though, toys will be getting a lot of exposure in the coming weeks as the industry converges on New York City for the 1997 American International Toy Fair, Feb. 10 to 17, hosted by the Toy Manufacturers of America. More than 20,000 buyers from the United States and abroad will converge on the Big Apple, scouring showrooms in and around the toy building at 200 Fifth Avenue and 1107 Broadway (from Feb. 10 to 14) for the next Tickle Me Elmo. This year, as in past years, the Toy Fair also will include an exposition at the Jacob Javits Convention Center. That arena features 1,135 exhibitors offering their wares from Feb. 14 to 17.