Season’s Sleeper Hit

Move over, Beanie Babies. The hot toy this season is Sing & Snore Ernie, a toddler’s toy, based on a “Sesame Street� character, that makes snoring sounds.

With the toy already in short supply, a speculative market is cropping up for the $30 battery-operated doll that also sings a bedtime tune. In classified newspaper ads and on the Internet, opportunists are hawking Ernie for more than 10 times its retail price.

A West Los Angeles day-care worker, Karen Dumas, and her boyfriend are offering five of the dolls for $500 apiece. They bought most of the toys at a local KayBee store minutes after it opened last Friday for its post-Thanksgiving Day sale.

So far she hasn’t had any takers--but she isn’t worried.

“I’m sure closer to Christmas it’ll start picking up,� she said. “We asked for $500 just to see what happened, but we’ll sell to the highest bidder by a week before Christmas.�

How’d Ernie get so hot? The answer seems to be a combination of smart marketing, favorable publicity and consumer whimsy.

Tyco Toys Inc. last July sent several dozen of its Ernies to editors at influential publications--mostly toy trade newsletters and consumer magazines that target families. In October, Family Fun magazine chose Sleep & Snore Ernie as its toy of the year. Its selection was picked up by news organizations--cluing parents in to the toy.

Tyco, having received good feedback from toy store buyers last spring, expected the toy to do well. It is prepared to ship 1.2 million Ernies before Christmas--but it now seems that won’t be enough. Big retail chains including Target Stores and Toys R Us report many stores are sold out of the toy, and no Ernies were sighted in a spot check of local KayBee stores. According to Tyco, 75% of its total production for the holiday season has already been sold.

“In the first year of a product, it’s very hard to guess the right quantity until you see the demand,� Neil Friedman, president of the preschool business at Mattel-owned Tyco.

Much of the demand seems to come from parents--not kids. Tyco has been advertising the toy on television during the evening, when young children are in bed.

“It’s against ‘Sesame Street’s’ charter to advertise consumer products to children,� said Friedman.

For Tyco, this is its second straight year in the hot toy seat. Last year’s hot toy, Tickle Me Elmo, was also from Tyco. Also based on a “Sesame Street� character, Elmo giggled when its stomach was rubbed.

Tyco went all out to stoke demand for Elmo in 1996. With help from its publicity firm, Freeman Public Relations, Tyco created an Elmo craze by sending 200 of the giggling, fuzzy toys to Rosie O’Donnell. O’Donnell featured the doll on her talk show in October. By December, people were paying more than $700 for it. The $30 toy went for $3,500 in a radio auction in tony Palm Beach, Fla. Tickle Me Elmo remains a hot toy. To date, 4 million have been sold.

Friedman said he thought Tyco would have enough Ernies. The company plans to ship 20% more Ernies than the number of Tickle Me Elmos shipped in 1996.

“None of us expected anything like this, especially back-to-back� with Elmo, he said. “In my 25 years in the toy business, I’ve never seen anything like it.�

Ernie isn’t the only hot toy. “Star Wars� toys--including the basic action figures and Star Wars Beasts, both from Hasbro-owned Kenner--remain big sellers for Christmas, after getting a huge boost from the film’s rerelease in theaters earlier this year. Mattel’s Barbie remains a chart-topper, with Holiday Barbie among the hottest this season. And the much-hyped electronic “pets� like Tamagotchi and Giga Pets continue to move.

So far, only Ernie is disappearing from shelves.

Friedman says that at this point, Tyco is trying to pull its TV ads for Ernie--or replace them with ads for toys that aren’t so scarce--in order to avoid a backlash among those who can’t get their hands on one.

At the same time, Tyco is shelling out to import its remaining supply of 300,000 Ernie dolls from China by plane, instead of container ship, to get them into stores more quickly.

How being caught short-handed two seasons in a row will affect Tyco isn’t clear.

“A company that’s promising too much or not delivering is at risk of getting hurt with the retailers,� said David A. Miller, president of the New York-based Toy Manufacturers Assn. of America. “And if you have to fly in product to keep the retailers happy, that’s not too profitable.�

Consumers are predictably getting cranky at sold-out stores, but Toys R Us Inc. executive Michael Tabakin insists shortages aren’t the fault of retailers or toy makers.

“When [a retailer] purchases a product for Christmas, we’re often purchasing in the first quarter of the year,� he said. “You can’t read a crystal ball. Who knows at that point?�

Retailers generally don’t make waiting lists, instead selling dolls on a first-come, first-served basis if they receive more stock. Friedman emphasizes that Ernie is still shipping, but admits many will probably be disappointed.

As for Dumas, she’s ready. To avoid a deluge of calls, she has listed her pager number rather than her phone number in a classified ad in the Santa Monica Outlook. Told that Ernie will probably remain a sell-out through Christmas, Dumas squealed, “Oh, good!�