NEW YORK -- If Santa Claus lives, he will be in New York this morning along with 20,000 other more conventional retailers, shopping at Toy Fair for what will go under the tree next Christmas.
For the major buyers, it's this critical 10-day stretch that will largely determine what will be offered customers. For the manufacturers, particularly the smaller ones, the pivotal holiday season begins now.
Consider the importance of Toy Fair to United Enterprises, a husband-wife start-up (hence the "United") in Columbia, with a newly invented game to sell and a minuscule marketing budget. "It's make or break," said Chief Executive Mary Blaylock.
For older, more diversified companies, it's not quite as critical -- but almost. "In effect, everything we do is to prepare for Toy Fair," said a besieged Edward Weiss as he scurried around on a recent morning to finalize plans for Life-Like Products, a long-time manufacturer headquartered in an old Baltimore textile mill.
Mr. Weiss, the company's marketing manager, stopped briefly in his cluttered office and attempted to deal with myriad questions between rings from a constantly jangling phone.
"This is insanity," he uttered as he answered yet another call. "We're usually insane, but this is real insanity. This is the time my cholesterol shoots up and I'm sure I'm having a heart attack."
Conditions will get worse before they get better for Mr. Weiss and every other manufacturer as T-day approaches. And then, if history is any guide, for all but the most fortunate, it will get even worse.
Why? Because despite its ubiquitous presence, toy manufacturing remains a flat business. Sales have barely moved since 1984. In 1990, revenues for the entire industry were about $8.8 billion, or a little less than those of Patriot missile producer Raytheon, number 52 on the Fortune 500.
Price increases in the toy industry are minimal, consistently falling below inflation. Hits are rare, life spans brief, and failures common. For every Barbie, there are literally thousands of Bobbies, Freddies and Joanies introduced annually that would be quickly forgotten had they ever been remembered.
Worse still, any increase in one company's prospects almost inevitably means a decrease in another's. For evidence, tour the 15-story Toy Building and the adjacent annex in lower Manhattan, main site of the Toy Fair and a bustling nerve center at this time of year.
The offices remain as they have for decades, but the tenants come and go -- one, like Hasbro, to swank accommodations of its own across the street, but most, like Coleco, the fastest growing toy company in the early 1980s, to liquidation.
In its second week, the fair expands for four days to the city's vast Jacob Javits convention center, where more than 1,000 small-timers will crowd into temporary space. They are scientists peddling botched experiments that produced bouncing goo, chefs selling edible rocking horses, and innumerable other small entrepreneurs peddling ideas. Most will end up hoarse -- and broke from negligible responses. A few, though, could walk away clutching arms full of orders for the next Cabbage Patch doll or Ninja Turtle. Typically, the biggest hits have been developed by the smallest players.
But in some ways, despite the extraordinary odds, the advent of the New York Toy Fair -- as well as two others -- one in Hong Kong and another in Nuremberg, Germany -- have given small players a better shot. The fairs replaced a network of traveling salesmen who hauled trunks of samples around the country, pitching them to small local stores.
Now the biggest retailers scour the world for products. Got a good idea? The chances were never better for it being found. Got a tough competitor? Chances were never better that its products will be bought.
Reflecting two dramatically different ways to approach the business are Mr. Weiss' Life-Like and Ms. Blaylock's United Enterprises Inc.
Despite Mr. Weiss' harried schedule, Life-Like is as close to a stable company as may exist in toyland. Its U.S. plants and Asian suppliers turn out a stream of hundreds of low-cost decorative products for model train enthusiasts, as well as a small version of the trains themselves and, through assorted acquisitions made over the years, tiny self-propelled cars and elegant wooden building blocks.
The overall market for most of these items may have peaked years, and in some cases, many many years, ago, but steady modest demand continues.
"Every year, we have to sell them again," Mr. Weiss said. "We have to reinvent our message and continue to tell the retailers that we deserve shelf space. Any other toy vying for that space is our competition."
A few years ago, it added a new line of meticulous replicas of old locomotives, precise down to the brake cylinders and exhaust grills. Sexy? Hardly. But successful.
This year, Life-Like is taking a bigger risk, adding an entire new line. If the venture is unusual, the product is not unfamiliar: slot cars. The market for these, as in the case of trains, is sluggish and mature. Ed Roth of the NPD Group, a New York market research firm, reckons overall sales at about $75 million with the one company, Tyco, dominating.
But car racing is booming. In 1991, attendance at NASCAR races trailed only major league baseball, said Mr. Weiss, and he expects children to hop along for the ride.
Everything is tenuous for United Enterprises. On a recent Thursday in a basement apartment in Columbia sits half the company's work force: Chief Executive Officer and President Mary Blaylock, age 27. The company's other employee, Executive Vice President and Chief Financial Officer -- Stan Blaylock, age 28, is at his other job, working on mergers at Alex. FTC Brown & Sons in Baltimore.
The primary office is a small extra bedroom with a portable computer and folded shipping crates on the floor. On the floor are folded shipping crates, on the wall various framed college and graduate school degrees.
Interviews are conducted in the living room, where wedding pictures stand out. The corporate dinner is simmering nearby in the all-day cooker. The daily business meeting, however, may be brief. Ms. Blaylock said her husband typically works 90-hour weeks at his other job.
One item the board needn't address: compensation. That awaits profits, which is at least a couple moves away. The couple have invested savings of $20,000 and while awaiting a return, money pressure on the new company is clearly relentless.
"I wasn't prepared for the stress, for not knowing where the next dollar was coming from," said Ms. Blaylock. Finances are private, but Ms. Blaylock admits that United's first 5,000-run printing of its product, a game called Humm...ble, would not push the company into the black. A few hundred copies are left.
As part of his job as CFO, Mr. Blaylock is responsible for collections. That means, his wife said, that after spending most of the day working on multimillion-dollar corporate sales, he gets on the phone with a store owner to retrieve several hundred dollars. "That's a lot for us," Ms. Blaylock said.
The enterprise germinated from a guest speaker in a business school class of Mr. Blaylock's. After he joined Alex. Brown in 1989, Ms. Blaylock began business school herself and work began on founding a new company.
First the two determined what they liked in games (pressure, competition, knowledge) and then the games they liked. The result, Humm...ble ("The game of melodies and memories") bears a close resemblance in form to Trivial Pursuit, the biggest winner in modern gamedom.
Dice are used to move players from one square to another, each of which contains a letter that corresponds to a type of song, be it folk, television, Broadway, etc. Players then either hum the song or use charades to act it out for teammates, who must guess the name.
Compiling these tunes took an entire summer. While other classmates took short-term jobs, Ms. Blaylock trudged off to various libraries with her portable computer, logging every tune she could find.
"Chances are, if it's a popular song, we're using it or thought about it," she said.
Ms. Blaylock graduated in May, and along with a degree she walked away with a business plan. Production began soon thereafter, and Ms. Blaylock started her own 14-hour-a-day job as head of United. Neighborhood stores were canvassed, family friends in the industry questioned, and marketing letters sent to classmates.
"Contacts, contacts, contacts, that's one of the things you learn in business school," Ms. Blaylock explained.
Initial sales have gone surprisingly well but production glitches were common and there have been innumerable tiny decisions, such as what to use for a logo, or the proper measurements for the board's borders.
"Doing this," she sighed, "you learn about details."