Toy Industry Strives to Evolve from Seasonal Sales Stigma

By Philip S. Gutis, N. Y. T. N. S. | THE JOURNAL RECORD, August 21, 1985 | Go to article overview

Toy Industry Strives to Evolve from Seasonal Sales Stigma


Philip S. Gutis, N. Y. T. N. S., THE JOURNAL RECORD


NEW YORK - Last year's Christmas card from two employees of the Toy Manufacturers Association pictured an exhausted S anta Claus slumped against a hearth. A man with a briefcase labeled Consultant Inc. hovered nearby, telling Santa what he already knew so well: ""We've got to help you level out this seasonal peak.''

Indeed, a more level sales pattern is the longstanding desire of the highly seasonal $12 billion toy industry, and some manufacturers, retailers and analysts think they are beginning to fulfill that desire.

Most toy manufacturers are adopting some of these strategies to encourage year-round sales:

- Developing ""collectibles'' - toy lines marketed as a series and that include products at varying prices such as Coleco's Cabbage Patch dolls and Hasbro's Transformers.

- Introducing new products earlier, such as Mattel's Angel Bunny and Princess of Power, and gearing manufacturing so that toys are on retailers' shelves by January or February.

- Increasing advertising, and spending the ad dollar more evenly throughout the year.

Some of these measures, in fact, helped reduce the rate of fourth-quarter sales in 1984 to about 50 percent of the year's total, according to many in the industry. Usually, sales in that period hadranged from 55 percent to 70 percent of the year's total. But not all companies had the same degree of progress.

""For some companies, the year-round toy business is a reality,'' said Douglas Thomas, the toy association's president. ""But for the industry it's not a reality yet.''

Rick Anguilla, editor in chief of Toy and Hobby World, said, ""Talking to a manufacturer about year-round sales is just like talking to Billy Martin and his saying, "I want to win games.'"

And just as a successful baseball manager plans his winning strategy carefully, so does a successful businessman.

These moves have created what many call a more stable operating environment for the toy manufacturers and retailers.

""The percentage of our business has changed slightly,'' said Norman Ricken, president and chief executive of Toys ""R'' Us, the largest toy retailer. ""Last year was the first year that less than 50 percent of our business was in the fourth quarter.''

Stephen A. Schwartz, senior vice president of marketing at Hasbro Inc., said his company had seen ""incredible growth in the first three quarters.''

""The toy business is truly becoming a 12-month business,'' Mr. Schwartz added. ""It still peaks in the fourth quarter, but it certainly has flattened out.''

There are some dissenters. Paul Valentine, a toy analyst with Standard & Poor's, said he ""is in the school that the toy industry is always going to be highly seasonal.''

""While there was no question that the retail sale of toys was more evenly distributed last year than any other year, that was primarily because of the early buying sparked by severe product shortages in Christmas 1983,'' Valentine said. …

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