New York Times
Wednesday, September 1, 1999
Advertising Requiem for Beanie Babies. Or Maybe Not.
The maker of
Beanie Babies, Ty Inc., created a frenzy yesterday when it posted
this announcement on its World Wide Web site: "All beanies
will be retired" as of Dec. 31.
Beanie traders and even the company's own employees were dumbfounded.
Has Ty, led
by founder Ty Warner, simply created a gimmick to pump up profits
of the pint-sized stuffed animals, which toy industry experts say
have begun to lose some of their appeal. Or is the company effectively
resigned to the fact that Pokemon now rules and is moving on. No
one knows for sure. But what is certain is that Ty, at least for
now, has created a Beanie buzz that is not likely to be sorted out
any time soon, as company executives remained mum.
As news seeped
out, Internet chat rooms went crazy, bids flooded into on-line auction
houses and parents began to fret over what to tell their children.
"In the last half hour we've had a 50 percent increase in bids,"
said John Babina, founder of Collingnation.com which operates Beanienation.com,
an on-line auction site that trades Beanie Babies. Its live chat
room, "was filled this afternoon right after the announcement
In Las Vegas,
Nev., Pamela Coheri was trying to figure out what to tell her 10-year-old.
"I think it will be sad for the kids," said Ms. Cocheri,
an administrative assistant at a weekly classified newspaper, whose
daughter, McKenzie, has 18 beanies.
Ty did nothing
to clear up the confusion on its own Web site yesterday. Customers
who turned to the company for guidance were ignored. One customer
who left a message on the site, pleaded: "Ty, are you ever
going to make Beanies again after the thirty-first of December.
People who phoned
the company seeking information did no better. A customer service
representative reached at Ty said the staff had been told of the
"retirement" only yesterday afternoon and had no further
information. "We were barely informed like a half-hour ago,"
said the representative, who identified herself only as Laura.
at Ty, based in Oakbrook, Ill., said she also had no idea what the
announcement meant and, "We have no comment; we have nothing
to say." The manager, who said her name was Denise, refused
to forward requests for an interview with Mr. Warner or other senior-level
executives saying, "It's not going to happen at all."
P.M., Ty listed the announcement on its Web site under a listing
of new Beanies, including one named "The End," a black
bear. The posting came several weeks after the company said that
"a very important newsflash will be made Aug. 31"
experts said it was unlikely the message meant that Ty would cease
to make toys altogether. Rather, they said, the company will probably
introduce new Beanies next year or replace them with an entirely
different product line.
can't imagine it's a gimmick," said Chris Byrne, a consultant
and editor of the Toy Report, a weekly newsletter. "The backlash
from beanie collectors, people who really invested a lot to build
their collections would be huge."
who first elevated the toys to must-have status by purchasing them
with their allowances and trading them at school, would also probably
throw a tantrum. "They could make more," said McKenzie
the Las Vegas girl with 18 beanies, including "Chip" the
cat. If the toy maker is not being honest about its intentions,
McKenzie said she would be upset because the company would be lying.
The appeal of
Beanie Babies initially was their price of $4 to $5 which made them
affordable to youngsters from families in virtually every income
level. But shortly after their 1993 introduction, parents got in
on the fun, making Beanies must-have collectibles that went for
tens of thousands of dollars and were off limits to their children.
But one large
collector said yesterday that the speculation among dealers is that
Ty simply planned to introduce dozens of new beanies next year and
that the retirement was simply manufactured to help the industry.
market has collapsed the market in the last six months," said
George Papania of Georges Video Games and Collectables in Las Vegas.
"What we did was retaliate for the fact that they kept these
things out too long without retiring them."
dealers do not buy from Ty directly, their purchasing activity directly
affects the company's sales because specialty retailers base their
orders in large part on their resale value in the secondary market.
Ty's move yesterday
was just the sort of stunt dealers had been hoping for, said Mr.
Papania, who has about 13,000 Beanies at his store. "I will
stock up on everything I can get now," he said.
Ty Inc., which
is a private company, had a surge in revenue soar since the introduction
of Beanie Babies, topping an estimated $250 million within three
An elusive marketing
whiz known for attention-grabbing promotions, Mr. Warner rarely
gives interviews. The company is also known for its insular culture.
In a blatant display of its perceived omnipotence, the company last
year had its phone number unlisted. Around the same time, the company
angered smaller retailers by cutting back on their orders without
warning and dropping them as customers if they reduced the prices
of the toys.
Now, toy industry
experts say, the company may momentarily drive demand but could
anger its most loyal customers. After all, said Sid Good, president
of Good Marketing Inc., which specializes in marketing to children,
"Consumers out in the market give value to collectable lines
in the first place."