A puzzle that confounds solvers but rescues a toymaker

Sometimes being a reporter can make a person feel pretty silly. There we were, a bunch of grown-up "journalists," bent over with notebooks and minicameras, conducting an interview in a department store with a nine-year-old boy who had completed a puzzle.

Actually, Jonathan Cheyer had just won a contest and $500 by completing -- in a little over 48 seconds -- a hot-selling, mind-boggling puzzle that has managed to baffle corporate executives and graduate engineering students, Ideal Toy Corporation's Rubik's Cube.

But perhaps most important for Ideal, it has also managed to help rescue the toymaker from heavy financial losses.

The cube is a multicolored plastic puzzle with 27 subcubes that turn on vertical and horizontal axes. The object is to twist and turn the cube back to its original position of having the same color on each of the six sides. It is named after Erno Rubik, a Hungarian architecture and design professor, who invented it as an exercise for his students. Since Ideal began selling the cube in May 1980, more than 10 million have been sold.

Wearing a Rubik's Cube T-shirt that hung down to his knees, young Jonathan patiently answered all of the questions about how he got his first cube (for Christmas), how long he practices (four hours a day), and where he practices (everywhere).

A few feet away, the faces of beaming Ideal employees reflected more than the promotional value of the contest.

For a company that lost $15 million last year, Rubik's Cube is one of several new toys that came along just in time.

"The cube has been a big help to us," said Stuart Sims, Ideal's senior vice-president for marketing and product planning. "But it's only one of six products that has done well for us." Titles like Missing Link (another movable-segment puzzle), Team America toy motorcycles, Guzzler cars that run on a few drops of water, Dukes of Hazzard Road Racing, and Pretty Curls dolls have been selling well enough to all but ensure a profit this year.

For the company's first quarter, which ended in May, sales reached $35.9 million, compared with $21.7 million for the same quarter last year. Profits for the period totaled $905,000, against $64,000 in the first quarter of 1980.

Last year, Ideal got hit with a double whammy of high interest rates and customer resistance to high-priced toys, said Norman Siegler, Ideal's vice-president and chief financial officer. With interest rates in the 20 percent range, many retailers were unable to borrow the money needed to finance large inventories of toys for their shelves.

"Dealers held back longer than usual, then ordered in much lower quantities," Mr. Siegler said.

Then, many of the toys dealers did order stayed on the shelves, once moms and dads got a look at the prices. While the most expensive items this year carry a wholesale price of around $20, some toys last year sold at wholesale for $40, Siegler said. (Retail prices vary considerably because many toys are sold in discount stores.)

"We were merchandising a line of products that our customers [retailers] and consumers were not willing to accept," Siegler admitted. "Our dealers told us they wanted items with the highest possible dollar return for the shelf space. So we sent out a lot of high- ticket items."

But in his industry, says Mr. Sims, the pendulum-like shifts in tastes of the toy-buying public -- children and their parents -- can catch a company off guard. For example, when Ideal was developing toys for last Christmas -- a process that began more than a year earlier -- "the pendulum had been swinging to the high-priced electronic area, and we put a lot of development and support behind that." Because toymakers make about half their sales in the fourth quarter of the year, Christmas is the season for profits.

Last year, however, the economy failed to cooperate, leaving Ideal and other toy companies with a lot of electronic games and other expensive toys that were never sold.

This year, Ideal hopes to fare better with a line of lower-priced toys, including road-racing sets, dolls, toy cars and motorcycles, and, of course, Rubik's Cube, which retails for about $8.

In addition to millions of frustrated Rubik's Cube owners, the puzzle has generated at least two paperbacks books on how to solve it, both selling for $1. 95, which is 5 cents cheaper than the solution Ideal will send to customers who can't stand the aggravation any longer.

It has also spawned some cut-rate copies. Since there is no worldwide patent on Rubik's Cube, spurious cubes are coming from Hong Kong and Taiwan. Actually, the real Rubik's Cube is made in plants in Hong Kong and Taiwan, too.

While Ideal can keep track of the number of cubes it sells, it cannot accurately follow how many people actually solve it, as opposed to those who finally banish it to a drawer along with other unfinished projects. The number of successful "cubists" is probably growing much more slowly.

After almost a week, for example, I've only figured out how to get one side to have the same color. Five more to go.