News Releases
NEW YORK, December 10, 2009 – After a private consultation with Santa Claus himself, BMO Capital Markets revealed the Top 10 mass-market toys expected to have the most impact this year on the toy industry.
“Shopping activity continues to build toward its seasonal crescendo,” said Gerrick Johnson, Toys analyst for BMO Capital Markets, based in New York. “However, shoppers seem to be maintaining a lot of discipline. They are following their holiday shopping lists very closely and are remaining very price-conscious by sticking to promotions. We think that any toy company choosing to support retail promotions in lieu of other forms of advertising is seeing a good return on its investment,” added Johnson.
The Top 10 Toys for the Holiday Season, according to BMO Capital Markets, the investment and corporate banking arm of BMO Financial Group (NYSE, TSX: BMO), are:
1) Zhu Zhu Pets (Cepia, Private) – You can't find these adorable toy hamsters anywhere. Their popularity is being compared to the compulsive buying that spurred Cabbage Patch Kids, Tickle Me Elmo, and Furby to cult-status. Part of the initial appeal of Zhu Zhu Pets was the inexpensive $10 price point, though people are now paying up to $50 or more for these hard-to-find critters on auction sites such as eBay.
2) LEGO (LEGO, Private) – LEGO construction toys remain one of the top gifts of the season. We note no specific set or kit in the LEGO line because we think the LEGO strength will continue to be broad-based. Simply put, we think LEGO is currently the strongest and most popular brand in the toy business.
3) Bakugan (Spin Master, Private) – These exploding spheres burst onto the scene last year but are still hot. This year sales should be bigger than in 2008. Bakugan are creative, fun, collectible, and priced under $10.
4) Moxie Girlz (MGA Entertainment, Private) & Liv (Spin Master, Private) – MGA's Moxie Girlz and Spin Master's Liv are both brand new entrants to the fashion doll category. We pick them to share this spot because we think they represent the biggest shakeup in the fashion doll aisle since Bratz came along in 2001.
5) Mindflex (Mattel, MAT) – This is the only big-ticket item we have on our list, at a retail price of $79.99. When playing with Mindflex, kids try to move a ball through a maze using the power of their minds. If parents are going to buy one expensive item, the novelty factor of the mind-controlled maze game seems hard to resist.
6) Nerf Blasters (Hasbro, HAS) – Nerf blasters are extremely fun and offer the safest gunplay on the market. The Nerf Raider CS-35 is this year's hot seller and has the largest dart capacity of any Nerf gun yet.
7) Toy Story (Mattel, MAT/ Thinkway, Private) – Toy Story is as evergreen a movie property as Star Wars or Cars. Excitement is already building for Toy Story 3, which is to be released next year. The movie toys are already on the market and are off to a good start.
8) Printies (Techno Source, Private) – Printies is a great activity that taps into the ageless desire of children to make their own toys. Kids can design their own creature or character on the computer, print it out onto special pre-sewn fabric sheets, and fill it with stuffing to create a brand new stuffed toy.
9) Tag Jr. (LeapFrog, LF) – Tag Jr. Book Pal, a pre-schooler's version of the Tag Reading System introduced last year, is a book-based learning toy that is entertaining for kids and satisfying to parents who take comfort in the fact that their children are learning while playing. Kids learn by touching any part of any page to bring words, pictures or activities to life.
10) Ultimate Fighting Championship (UFC) Figures (JAKKS Pacific, JAKK) – UFC figures have not made other industry hot lists as some think the sport is too violent. However, the sport is gaining more mainstream acceptance each day and we think the highly detailed and poseable figures, with 29 points of articulation, are going to be very popular with kids and collectors alike.
Other trends to mark this year's holiday shopping season are:
- Store traffic has been building, consistent with seasonal trends
- Purchase transaction sizes appear small, as shoppers are willing to buy gifts on a piecemeal basis and chase deals
- Retailers are giving customers the promotions they crave. We believe promotional activity has been broader and deeper now than it had been in the year-ago period
- Inventory levels are still in good shape for general items. However, certain key items such as Zhu Zhu Pets and Mindflex are difficult to find
- Zhu Zhu Pets continue to be the most wanted item this holiday season and the popularity of these toys has been a benefit for the overall toy sales
About BMO Capital Markets
BMO Capital Markets is a leading, full-service North American financial services provider, with over 2,200 employees operating in 14 North American offices and 27 worldwide, offering corporate, institutional and government clients access to a complete range of investment and corporate banking products and services. BMO Capital Markets is a member of BMO Financial Group (NYSE, TSX: BMO), one of the largest diversified financial services providers in North America with US $359 billion total assets and more than 36,000 employees as at October 31, 2009.
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Gerrick Johnson, Toy Analyst for BMO Capital Markets, with the top 10 toys for this holiday season.