Toymakers hope last year's hot sellers can rescue this year's profits
The stock market's churning probably won't shrink this year's crop of Christmas stockings. But children may be disappointed when they look inside. Some analysts see a shift back to basics, and away from last year's trend - an explosion of expensive, high-tech toys. Others see the trend continuing inevitably. What most seem to agree on, however, is that there's nothing brand new out there ``to capture America's heart.''
``This was the worst year for toys in 30 years,'' says Susan Buttenhoof, an account supervisor at Lewis Galoob Toys in San Francisco.
In fact, toy sales, which are counted as nondurables, have gone down. Spending on nondurables had risen only 0.5 percent in August, says Laurie Lively, who follows the toy industry at Oppenheimer & Co., a research firm in New York. ``That is very, very weak,'' she says. ``That's the same kind of number you get when you're in a recession.''
Ms. Lively believes that this year ``we won't see as many high-ticket items, like $100 talking dolls and $100 Lazer Tag games.'' But not necessarily because parents are cutting back.
Like last year, a lot of these toys are being produced in China, where costs are 20 percent lower. But poor quality and late shipments created numerous problems for retailers, and they didn't get the products out there until after the Christmas rush was over.
Some of the hottest toys last year, especially Worlds of Wonder's Teddy Ruxpin, had ``a terrible drop in sales,'' says Ms. Buttenhoof. While ``it's going to take some time to work all the bugs out,'' she says, ``they'll soon be producing high-tech toys that kids will want at a price mothers can live with.''
In the meantime, last season's hot products are making the rounds again, with a few new additions.
Toys `R' Us expects its biggest sellers to be Mattel's talking doll, Heather, which has ``a maturing vocabulary,'' and Coleco's talking Cabbage Patch kids, both of which run about $100.
Analysts expect the high-priced Mr. Game Show, made by Lewis Galoob Toys and featuring a talking game show host, to be extremely popular as well.
Nintendo, a Japanese-made home video game system, ``has been selling big all year'' and will continue to do so, says Paul Valentine, a toy analyst at Standard & Poor's. It is similar to Atari, but Nintendo is trying to limit the amount of software available to keep the quality high, Ms. Lively says.
More affordable toys that will probably be under a lot of trees this year, Mr. Valentine says, are Coleco's stuffed Couch Potatoes; Mattel's Captain Power, a controversial toy based on a television show; and Little Boppers, characters that dance, from Worlds of Wonder.
Fisher Price has a new line called Fun With Food, which features play kitchens.
Michael Goldstein, executive vice-president at Toys `R' Us, the nation's largest toy retailer, doesn't expect this Christmas to be very different from last year. With the stock market situation, ``a lot of retailers are not taking as much risk, and are carrying less toys,'' he says. ``This means more customers will come to us.''