The Plain Dealer
Business Section
Tuesday, September 12, 1999

Beanie baby mania enters Phase 2: 'retirement'

By Marcia Pledger
Plain Dealer Reporter

If the announcement that all Beanie Babies will retire at the end of this year was a stunt to stir interest, it worked.

"There's been a flurry of phone calls from people asking if we have the new Beanie Babies," said Michael Ziegenhagen, owner of Playmatters Creative Toys in Solon, Pepper Pike and Shaker Heights. "We've also gotten a lot of foot traffic from people checking out our Beanie Babies. They want to make sure they have everything in stock."

The buzz started when Ty Inc., an Oakbrook, Ill. Company that makes the beanbag animals posted an announcement on its Web site Tuesday afternoon. Along with the usual update of new Beanie Babies to be released next month, the page said all beanies, including the new ones, would go out of production Dec. 31.

Ziegenhagen believes it's a marketing gimmick. Kids today are more attracted to newer toys, such as Pokemon and Krazy Bones, he said, adding that most Beanies buyers in the last two years at his stores have been middle-age women, probably collectors.

Efforts to reach Ty were in vain yesterday, but the Associated Press reported that the company declined to say whether it would be making any new Beanie Babies in 2000.

Ziegenhagen said a Ty representative told him yesterday that it was true: All of the newest toys announced on the internet will be retired on New Year's Eve. But the news hit the internet before retailers could order the products, so they won't be in some stores for about a month.

"It's outstanding marketing. Honestly, I think that Ty's marketing strategy has people doing things that they don't even want to do," Ziegenhagen said. "It's almost like an addiction. From now until the end of the year, there will be people madly chasing the new styles."

Ty started selling the toys in 1993 and now has more than 100 characters from teddy bears and dinosaurs to birds and zoo animals. Within three years of the Beanie Babies' introduction, the company had a revenue surge estimated at $250 million.

But the toys have changed from a children's fad to an adult collectible.

In collecting, scarcity matters, so discontinued - "retired" - models have been the hottest sellers.

Some toy industry experts say Ty had to find a way to build the buzz again, rekindling interest in its newer toys.

"Our take on it is first and foremost, they're generating a lot of discussion and renewed interest on Beanie Babies at a time when kids right now are more focused on Pokemon, among other toy products," said Sid Good, president of Good Marketing, Inc., a Cleveland-based children's product development and consulting business.

"Chat rooms have been buzzing. That in itself is a major coup for Ty, just to get people talking about Beanie Babies again," Good said.

"How that translates into additional sales is yet to be seen."

Some retailers hope one thing the news means is a revived frenzy for older models.

"There's a lot of Beanie Babies that need to be retired because they're sitting on the shelves too long," said Fern Epstein, co-owner of Fad Frenzies in Beachwood Place.

She expects to keep selling beanies for a long time. "We're not worried at all," she said.

"Ty is a marketing genius. I don't believe that this will be the permanent end of Beanie Babies (Company founder Ty Warner) will probably start the new year with a brand new line of Beanie Babies.

Pat Krassen of Shaker Heights stopped by fad Frenzies yesterday afternoon to make sure there were no Beanie Babies at the mall cart that weren't already in her two daughters' 100-plus collection.

The family began discussing the possible end of Beanie Babies early yesterday morning.

"If it's true that they're retiring, I told my kids we'd put them all in Ziploc bags and put them away," Krassen said.

"My little one wants to keep a couple of them out to sleep with. And their father wants to sell them all."