Why Kids Are Gonzo For Beanie Babies

CRITTER CRAZE

At 9:30 on a Tuesday morning last week, when they should have been at work or aerobics class, dozens of parents stood outside the No Kidding! toy store.

A shipment of Beanie Babies had come in overnight, and word spread like wildfire through suburbia. When the store opened, 400 were snatched up in two hours.

"I've never seen anything like it," says Carol Nelson, co-owner of the specialty toy store in Brookline, Mass. "People are just wild for them, and they come in and buy as many as they can."

Move over Tickle Me Elmo. Beanie Babies are here.

These pint-sized beanbag animals, with names like Seamore the Seal and Patti the Platypus, are the hottest toy in the US right now, and they're another example of how Americans can't resist a gimmick. But this time, it's a little-known toy company that has executed the wildly successful but unorthodox marketing campaign. And the benefactors are small, specialty toy stores, rather than mass merchants like Toys 'R' Us.

At the moment, the soft critters are selling so fast they're nearly impossible to find. Stores can't keep them on the shelves. Parents, desperate to buy their children the latest style, have been known to intercept shipments in parking lots as they're unloaded from the truck. Some of the stuffed animals the company has "retired" are commanding upwards of $1,000 on the Beanie Baby black market.

Even McDonald's stash of 100 million Teenie Beanies (the fast-food company's largest toy order ever) was nearly depleted in a matter of a week.

"The first day of the promotion was really crazy," says John Timas, assistant manager at McDonald's in Framingham, Mass. The franchise sold about 1,000 Happy Meals with the miniature Beanies inside. "Some stores," he says, "have had to unplug their phones."

Independent toy stores have benefited the most from the critter craze. "It's probably the most successful toy the specialty toy stores have ever had," says Frank Reysen Jr., editor of Playthings, a toy industry trade publication in New York.

"It's a very big hit with kids and adults," says Henry Lee of Noodle Kidoodle, a New York-based specialty toy chain with 32 stores nationwide. "Right now we're out of stock," he says, "but as soon as we get them in, the phones ring off the hook and [customers] wait for the trucks to come in."

The stuffed toys were introduced in 1994 by Ty Inc., a privately held toymaker in Oak Brook, Ill. Since then, Ty has rolled out about 80 different characters with clever names like Chocolate the Moose, Righty the (Republican) Elephant, and Garcia (as in Jerry) the tie-dye Bear.

The reason they're so hot seems simple: They're cute, cuddly, and priced right - about $5 apiece - which is a big selling point with parents.

"We like them. They're very cute, and we happen to have a lot of them ... but we're not crazed," says Eve Youngerman of Brookline, Mass., whose three school-age children have a total of 60 Beanie Babies.

"We get them as we get them," she says. She confesses, however, that the kids' grandmother is on every toy-store waiting list in Naples, Fla.

For kids and even some teenagers, they've become a must-have.

"If a friend wants me to come over and play, they always ask me to bring my Beanie Babies," says third-grader Annie Oyer of Newton, Mass. She has 26 Beanies and would like to make Freckles the Cheetah No. 27.

But it's more than good looks that is fueling the critter craze. Ty Inc. has engineered a smart marketing campaign.

For one, because each Beanie Baby has its own identity, kids are aiming for the complete collection.

In addition, the company periodically stops manufacturing an animal, which only fuels the frenzy.

Geckos, a gift store in Key West, Fla., for example, sells two or three retired Humphrey the Camels a week for $700. "The phone rings nonstop," says a sales assistant, who asked not be identified.

In addition, Ty distributes the Beanies only to specialty toy stores and gift shops. That means you won't find them at Toys 'R' Us or Kmart.

"One of the [company's] smart strategies is that it is limiting the distribution somewhat so that it truly is a collector's item," says Mr. Reysen.

The Beanie craze has really taken hold in the past year to six months.

Last year, Beanie Babies placed eighth in Playthings' Top 10 list of the most popular toys sold. "Among 150,000 toys," Reysen says, "that's a pretty good finish for a toy whose distribution is rather limited."

Due to the huge demand, Ty put a dollar limit on the Beanie Babies merchants can order each month.

Ms. Nelson of No Kidding! says she can order only 2,000 Beanie Babies a month. "We could have easily ordered that [amount] each week."

Also, she says, Ty ships only what it has in stock. Back-ordered items are automatically canceled.

"They're still trying to catch up," Nelson says. "They're still looking at February and March orders."

"Ty won't admit this," she says, "but what we suspect is that their energies went into producing those Teenie Beanies for McDonald's, so the regular retailers weren't being shipped very much."

Ty has been so inundated with calls that it unlisted its telephone number earlier this year. (It also did not respond to numerous requests for an interview.)

"Nobody can talk to them. I've never talked to them," says industry watcher Reysen. "I tried to get to their booth during the [February] toy fair, and I couldn't even wave to the guy."

HOT COMMODITIES

* Most Beanie Babies sell for $5 apiece. But after the company 'retires' a style, its value increases. Here are secondary-market prices recently paid for mint-condition retired Beanies.

Patti the Platypus - $500

(original)

Peanut the Elephant - $1,000

(dark blue)

Spot the Dog - $1,000

(original, with no spot on back)

Quackers the Duck - $700

(original, without wings)

Source: Animal Crackers toy store, Sarasota, Fla.