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Positive Trends for Toys & Souvenirs

Mar 1, 2010
by Kevin Zimmerman

A decent holiday season and the generally positive economic outlook for 2010 are boding well for companies specializing in toys and souvenirs. And while some sellers report sales that were either flat or slightly down during the fourth quarter of '09, they insist that such results are actually a relief, especially given how bpoor the first three quarters of the year were. According to market research firm the NPD Group, U.S. toy sales fell by 0.8 percent in 2009, to $21.47 billion. Fourth quarter sales were described as flat, despite a four percent gain in unit sales, attributed mainly to heavy promotional activity at retail during the holiday season. Unit sales for 2009 were down 0.5 percent from 2008 totals.

"2009 was a remarkably uneventful year for the toy industry, but in a good way," says NPD Group industry analyst, Anita Frazier. "In a time of continued economic turmoil, toy industry revenues were very stable, and the uptick in unit sales in the fourth quarter is a very positive sign for the industry heading into 2010." NPD research found that Building Sets and Arts & Crafts were the two categories with the most significant gains in sales for 2009, up 23 and seven percent, respectively. Sales of Action Figures and Games/Puzzles were up by four and one percent, while Youth Electronics and Plush suffered the greatest sales revenue losses, down 17 and 13 percent. "The increase in Building Sets and Arts & Crafts speaks to the entertainment value these categories deliver," says Frazier. "Both can deliver hours of open ended play, and Arts & Crafts does so at very attractive price points."

In its report, NPD also cited several other factors affecting 2009 toy business, including:

? Unit sales of toys priced under $5 decreased, the only price range to do so, while more people opted for products in the mid range, between $5 and $10.

? Children in the 9 to 12 demographic were the only age group to gain in market share and absolute dollar sales, a result thought to be related to the gain in sales of building sets, which tend to skew older.

? Licensed toys represented 25 percent of total industry sales, down from 27 percent in 2008. Best selling licensed products, in alphabetical order, were, "Cars: The Movie," Disney Princess, Dora the Explorer, Star Wars, and Thomas and Friends.

Leading the charge was Zhu Zhu Pets, the robotic hamster toys that typically retailed for $8 to $10, and were often resold by individuals for as high as $100. Total sales figures for Zhu Zhu Pets and Go Go Pets (the name the hamsters sold under in some markets; in the future they'll all be branded Zhu Zhu) have not been made available, but sales were strong enough that manufacturer Cepia LLC has already announced plans to roll out several waves of additional hamsters throughout the year. "The highly sought-after Zhu Zhu Pets brought welcome excitement to the toy category this holiday," Frazier remarks, "and many other properties benefited from this in Q4."

Also expecting to reap dividends this year are a number of Toy Story 3 licensed products. The film, set to open in the U.S. on June 13, will be available in the 3-D format, and a plethora of toys ranging from action figures to Legos, puzzles and craft sets will start hitting store shelves over the next couple of months. Given the still solid performance of merchandise associated with the first two Toy Story films, and, with most products licensed by Pixar Studios, a Toy Story 3 bonanza seems a given.

Such developments are welcome news for the likes of Esco Import Toys (www.escoimports.com), which figures to benefit from a trickle-down effect for its line of toys, ranging from cars, trains and airplanes, to pirate, western, and animal toys. "Last year we started seeing improvement, and over the last few months things have really been picking up," reports president, Jack Steinfeld. "The Christmas season was a lot better than it was in 2008, and we're anticipating a good 2010."

Esco's large line of dinosaur toys has been an evergreen, Steinfeld says. The company's dino line includes 5.5 inch dinosaurs in a range of species, priced at $42 per 60 piece box (three boxes go for $36 each, six boxes for $30 each); a "Dino Fossil and Slime in Egg-Shaped Container," set, priced at $12 per 24 piece box (six boxes for $10.80 each, 10 for $9.60 each); and five inch dinosaur watersnakes, priced at $20.40 per 24-piece box (three boxes for $18 each, six for $15.60 each). In addition, girls' kitchen sets are also strong sellers. A six-piece play set (including stove top, frying pan and food) goes for $10.80 for each box of 12 (five boxes for $9.60 each, ten for $8.40 each), while the seven-piece baking set (including rolling pin, spatula, and cookie cutters) is offered for $15 per 12 count box (four boxes for $13.80 each, eight for $12 each).

"Gross novelties also continue to do well," Steinfeld states, referring to such items as "Big Barrels of Slime," (available in four colors, priced at $9 per 12-piece box, $7.80 each for six boxes); "Green Putty with Alien," ($18 per 12 piece box, or $16.20 each for four boxes, $14.40 each for eight boxes); and "Slime in Test Tube with Bugs," ($18 per 24-piece box, or $15.60 each for five boxes, $13.20 each for nine boxes). Steinfeld adds that Esco recently redesigned its website, which went live in November. The new version has a different overall look and improved cart function, that makes order processing, "flow better."

Maintaining its presence in the plush toy category is Transworld Plush Toys, Inc. (www.eplushtoy.com), where sales manager Steve Sheng says both animal plush toys and animal slippers remain their main source of business. Animals offered include a number of teddy bears (14-inch-tall white or brown bears are priced at $84 per box of 12, while different 12 inch individual bears wearing hoodies are priced at $5 to $7 each); several breeds of 5.5 inch tall barking dogs ($30 per dozen), and assorted cats, frogs, pigs and unicorns. Transworld's animal slippers, many available in both children's and adult sizes, are designed to wrap around the wearer's feet up to their ankles. They're priced individually at $19.95 to $30.75 per pair, depending on size and breed. The company also specializes in custom made stuffed animal plush toys for wholesale trade in bulk quantity. The minimum order is 200 dozen (2,400 units) per item per shipment.

Business at Trippies Inc. (www.trippies.com/home.jsp), which specializes in giftware and home décor products, has been, "Soft over the past 12 months," according to CEO, Kevin Davis. "That's primarily been due to the economy. Our customers' businesses have also been slow, so they've been tending to work through the inventory they already have." Nevertheless, he adds, Trippies was, at press time, in the midst of adding some 200 new figurines to its catalog, and was taking a fair share of pre-orders during the Atlanta Gift Mart, held Jan. 6-12. "We're still seeing a lot of action with our roosters and hens," Davis reports. "They've always been in style as a great kitchen accent piece, and it looks like they're gaining even more momentum."

Those best sellers include a 13 inch rooster ($16.60 per piece; $14.95 per piece for two or more, $13.80 for four or more) and a set of four plates with chicken designs, with hanger, for $12.35 per set ($11.10 per set for two or more, $10.25 for six or more). Trippies also offers a number of items featuring bears, snakes and deer. "We definitely see business picking up in 2010," Davis declares. "No one is declaring victory just yet, but it just feels better than it has for awhile."

At The Glow Pro (www.theglowpro.com), which as its name suggests serves as a wholesale distributor of glow sticks, glow bracelets, glow necklaces and the like, director Garret Hebenstreit, says business for 2009 was down about ten percent. "It's been a challenging time, there's no doubt about it," he says. As a result, Hebenstreit says, "The Glow Pro will continue expanding the product line, as we do pretty much every year." The glow product business is a seasonal one, he notes, so it's been somewhat difficult getting a handle on what, if anything, the company's typically slow winter might mean.

For all its novelties like the flashing LED pacifier ($0.95 each) and light-up swords ($2.99), The Glow Pro's best sellers remain the six inch glow stick ($0.54 to $0.64) and the 22 inch glow necklaces ($19.95 to $21.95 per 50 pack). Discounts for bulk orders of up to 15 percent are available for most items.

Times are, "A little scary," at Lifeforce Glass Inc. (www.lifeforceonline.com), according to president, Kristina Runciman. The company offers low-priced, high quality giftware on rocks and glass products. While business in 2009 was on a par with 2008, she says, "It's been increasingly hard for our reps to get appointments." While the store offers a number of pre-designed rocks and glassware with aphorisms and famous quotes ("I thought some of these would be too 'New Agey,' saying, 'I am healthy,' or, 'I am successful,' but they've been doing pretty well," she says), it's from its customization program that Lifeforce Glass receives the bulk of its orders. "We can put anything that a customer wants on our products," according to Runciman. "There's no setup charge; all we ask is for an order to be a minimum of 100 pieces."

The holidays were a "pleasant surprise," for Natural Gems Company (www.naturalgemscompany.com), according to office manager, Kristin Myers. "We took a more aggressive advertising approach, getting very heavily into online advertising, and we've been evolving our product line to include more diverse items. Buyers are out there. You just have to find them." Offering figurines and jewelry carved into animal and geometric shapes has been just as important to Natural Gems' growth as has its cornerstone jewelry and sterling silver products, she says, with glass heart and ammonite pendants being particularly successful of late.

"We're changing our product line constantly to keep our merchandise fresh and new, so that people don't keep seeing the same things when they come to us," Myers says. Business has been so strong, in fact, that the Illinois based Natural Gems is opening a second physical store in Los Angeles, and unveiling a, "More user friendly and detailed website," in March.

The following were interviewed:

Jack Steinfeld, president
Esco Imports Inc.

6055 Woodlake Ctr
San Antonio, TX 78244
Toll Free: 800-445-3836
Tel.: 210-271-7794
Fax: 210-223-1547
Email: jack@escoimports.com
Website: www.escoimports.com

Steve Sheng, sales manager
Transworld Plush Toys, Inc.

2121 Kings View Dr.
Hacienda Heights, CA 91745
Toll Free: 800-884-4828
Tel.: 626-964-4828
Fax: 626-964-4546
Email: salesmanager@eplushtoy.com
Website: www.eplushtoy.com

Kevin Davis, CEO
Trippies, Inc.
287 Elam Road
Ray, OH 45672
Tel.: 740-884-4434
Fax: 740-884-4441
Website: www.trippies.com/home.jsp

Garret Hebenstreit, director
The Glow Pro
3748 West Fork Rd.
Cincinnati, OH 45247
Toll Free: 866-456-9911
Tel.: 513-286-1220
Fax: 513-286-1223
Email: sales@yourdomain.com
Website: www.theglowpro.com/default.aspx

Kristina Runciman, president
Lifeforce Glass Inc.
123 Wexler St.
Kingsport, TN 37660
Toll Free: 800-828-3870
Tel.: 423-246-7188
Fax: 423-246-7199
Website: www.lifeforceonline.com

Kristin Myers, office manager
Natural Gems Company
23841 W. Industrial Drive South
Plainfield, IL 60585
Toll Free: 800-883-8650
Tel.: 815-609-3298
Fax: 800-883-8651 / 815-436-8983
Email: naturalgemsco@yahoo.com
Website: www.naturalgemscompany.com

Topic: Product Trends

Related Articles: toys  souvenirs 

Article ID: 1277

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