Remember those night vision goggles that were selling for $80 during last year's holiday season? This year, Malibu toymaker Jakks Pacific has lowered the price for the new improved model to $60.
That's just one example of L.A. toymakers trying to stimulate consumer spending by cutting prices. Companies are also emphasizing items such as cars and dolls because they're in the lower price category. And some are focusing on products that kids won't forget the next day, such as a Mattel game that players control with their brain waves.
All the toymakers are expecting the upcoming holiday season will be better than last year's.
"We are definitely looking at giving the consumer great value this holiday," said John Ardell, senior vice president of marketing for Jakks Pacific Inc., "whether it be improving the quality of our night vision goggles and taking the price down $20 dollars or offering items that people can play with for a long time and have fun for the entire family."
Jakks Pacific also cut the price on its game console by $50, from $79.99 to $29.99.
Last year's economic crisis caused consumer spending to fall during the 2008 holiday season, and U.S. toy sales dropped 3 percent from $22.3 billion in 2007 to $21.6 billion in $2008, according to market research firm NPD Group Inc. What's more, toy sales dropped 5 percent for the fourth quarter of 2008 from the same period in 2007. Toymakers make at least a third of their annual revenue in the fourth quarter.
Industry analysts said they expect to see an increase in sales this holiday season as the economy shows signs of a turnaround.
"The general feeling is that this year will be better than last year, when the consumer was in a state of panic over what was happening with the stock market and economy," said Jim Silver, editor of Time to Play Magazine, an online trade publication.
But retailers aren't as optimistic.
"Right now, retailers are not placing orders," said Sean McGowan, an analyst at Needham & Co Inc. who follows Mattel Inc. and Jakks Pacific. "They are deciding whether or not the orders they've placed are high enough or low enough."
Back to basics
Mattel is promoting toys that are priced at $30 and under, which make up about 80 percent of its product line. Investors seem keen on the prospects for the holidays and 2010: The El Segundo toymaker's stock price has been steadily increasing since March. Mattel was trading at $17.97 on Sept. 24, a 42 percent increase from its low of $10.45 on March 5.
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