Hot wheels drive onto children's furniture scene

In an attempt to increase sales, toy manufacturers look past toys.
NEW YORK (AP) -- It's a child's dream -- bedroom decor just like a Bratz doll's. A bed in the shape of a Hot Wheels car. Or a chair shaped like a Tonka truck.
As toy sales stagnate, manufacturers are no longer putting all their efforts into games, puzzles and dolls. They're targeting the market for children's decor, from bed boards and lounge chairs to sheets and wallpaper, hoping to showcase their brands in places beyond stores' toy departments.
For girls, products include bedroom furnishing based on the popular Bratz: purple bed canopies, bed boards, lamps, trinket boxes, inflatable lip-shaped lounge chairs, and bedsheets, all featuring images of the fashion dolls. For Tonka lovers, there are yellow plush chairs in the shape of dump trucks and tables and chairs that feature truck motifs. More Tonka-themed items are expected later this year, including hampers, lamps and wallpaper borders.
"You've got to be in different categories," said New York-based independent toy consultant Chris Bryne. "Toys is crowded and competitive."
"And the furniture market is hot right now," he said.
New stores
By lending a hand in decorating a child's room, toy makers including Mattel Inc., Hasbro Inc., Spin Master Ltd., MGA Entertainment Inc. and Toy Quest Inc. are trying to create a business that allows them to sell not only to new customers such as Bed Bath & amp; Beyond Inc., but to be in different aisles of toy stores or mass merchants. And decor is a year-round business, not one concentrated at the holidays, like toys.
"We see our company becoming the P & amp;G [Procter & amp; Gamble Co.] for kids," said Anton Rabie, president and co-chief executive of Spin Master Ltd., which changed its name from the more limited Spin Master Toys three years ago and now generates 20 percent of its sales in non-toy items. "Why is it that we should be making just dolls and airplanes? Why can't we broaden out?"
In fact, Spin Master, considered a pioneer in the home decor trend, said that this past holiday season, its foam sofas that convert into beds were just as popular as its hottest holiday toys.
The Toronto-based company, which began testing home decor for spring 2003 under the name Marshmallow, will be releasing a full assortment this year, including pillows, canopies and foot rests that feature characters such as Dora the Explorer and Spider-Man. The products will be featured at the American International Toy Fair, an industry product expo that officially begins Feb. 20.
Sales of traditional toys are expected to fall 5 percent in 2004, from 2003, when it recorded a 2.9 percent drop to $20.7 billion, its first annual decline, according to the NPD Group Inc. a Port Washington, N.Y.-based market research company. And toy makers remain cautious about 2005 as they face more price pressure from discounters and greater competition from products such as digital music players.
But Sean McGowan, a toy analyst at Harris Nesbitt, has mixed feelings about toy companies' expanding into home decor.
"Part of me applauds the move," he said. But he believes the strategy can be risky for companies that market just one brand -- if a brand's popularity slips, a company will have more to lose.
Parental skepticism
Some parents aren't sure they want to buy character- or toy-themed cribs, beds and other furniture.
"I'm looking for more practical furniture, something more neutral," said Barbie Davalos, of Chatsworth, Calif., who has an 18-month old daughter. But she noted that she would be open to buying a few accessories like a character-themed wrap for a bed when her daughter gets older.
Toy companies are joining a growing number of retailers who have expanded into children's furniture and decor. While in the past parents shopped at Swedish furniture retailer IKEA or at small specialty stores, over the last two years major home furnishing chains such as Pottery Barn, a division of Williams-Sonoma Inc., and Bombay Co. have opened offshoots selling children's furniture.
Toy makers believe they have an advantage because of their ongoing relationship with children.
"We look to the bedroom as a great place to express their love of a particular brand," said Bryony Bouyer, senior vice president at Hasbro's properties group, which is marketing Tonka and Little Pony home decor.
Price range
Toy executives also say the furniture, mostly made in China, where costs are considerably lower than in the United States, is also quite affordable. Spin Master's foam sofas are under $30, while MGA Entertainment's home decor ranges in price from $7.99 for a small plastic storage container to $99 for a wooden bedboard. Mattel's lineup of furniture ranges from $4.99 for a plastic chair to few hundred dollars for a toy box with shelves.
Still, it wasn't easy at first for toy companies to persuade retailers to make room for their home decor. But after some successful test marketing, toy sellers and other stores like J.C. Penney Co. Inc. are expected to expand offerings from toy companies this year. And Toys R Us Inc., which was very happy with the sales of Spin Master foam sofas last year, will be at Toy Fair to see what other furniture and decor are available, said Kelly Cullen, a spokeswoman.
Some toy makers are wondering whether their home decor business might eventually surpass their toy sales.
"It is a great crystal ball question. Which businesses will be bigger?" said Rabie of Spin Master.