MUST HAVE TOYS THROUGH THE YEARS

 

http://www.boston.com/business/specials/holiday/2009/must_have_toys/

 

 

Mae Anderson

Associated Press

 

Friday, November 27, 2009

 

LINK TO PHOTO OF ZHU ZHU: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/11/27/BU6O1AR2UT.DTL#ixzz0Y5lSIoIE

 

Seeing a fully stocked shelf, she decided to hold off until Christmas.

That was "before I knew that the hamsters would soon be off the shelves and more scarce than an H1N1 vaccine," said Fowlkes, 32.

Now she can't find them anywhere.

Zhu Zhu Pets - which retail for about $10 and are aimed at 3- to 10-year-olds - are this year's bona fide must-have toy, following in the footsteps of past crazes for Tickle Me Elmo and Cabbage Patch Kids. On resale Web sites like eBay and Craigslist, they fetch $40 or more. Vital accessories such as the hamster car and funhouse are sold separately.

By many counts, the toy is an unlikely hit. They're in a field crowded with toy pets. The hamsters, which scurry around, make noises and drive cars, don't always work the way you expect and have a limited range of action.

"Honestly, I don't really get it," said BMO Capital Markets analyst Gerrick Johnson. "But I don't need to get it for a toy to be hot."

The toys do have several factors that make them compelling, Johnson said: fun accessories and scarcity - sometimes when something is hard to obtain it makes people want it more. One big thing going for them in tough economic times: They're cheap.

Unlike past hot toys made by large manufacturers like Mattel's Tickle Me Elmo and Tiger Electronics' Furby, Zhu Zhu Pets are made by tiny Cepia Inc. of St. Louis, with just 16 employees in the United States and 30 in China, making their success even more unlikely.

Just 6 years old, Cepia worked on an electronic dispensing device for consumer products before turning to toys.

The company was started by toy industry vet Russ Hornsby, 56.

The success of Zhu Zhu Pets wasn't entirely accidental. After being inspired by classic robotic toys, like the barking puppy dog who flips, Hornsby created a prototype. The craze sets Cepia up for a strong 2010. Hornsby estimates the company will sell $100 million in Zhu Zhu Pets by the end of the year. It's always hard to tell how long a toy will stay hot, but based on bookings, he says that will grow to $350 million to $400 million by the end of next year as production ramps up.

BMO analyst Johnson agreed 2010 will be big for Zhu Zhu Pets.

"I don't know what Chinese New Year is coming up, but as far as toys are concerned, next year will be the year of the hamster."