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As marketing trends go, the Beanie Babies craze was supposed to run its course, eventually fading into the backdrop a la Barney and the Power Rangers. But one sentence on the company's Web site last week abated all hope of a quiet retreat.

"On Dec. 31, 1999, 11:59 p.m. (CST), all Beanies will be retired," the announcement said. By week's end, it was still unclear whether that would actually happen, although all signs indicate the Beanies, or their successors, will still be working for Ty Inc. come January.


Ty executives last week didn't provide an official reason for the announcement, which was on the site less than one day. But industry observers, retailers -- and even devoted consumers -- declared the mystery move a marketing stunt designed to invigorate sluggish sales in the face of competition from rising stars such as Pokemon.

"The strategy has clearly worked," said David Leibowitz, a managing director at Burnham Securities. "I doubt if there is anybody who's not aware of the announcement. It's been successfully implemented."

Even a generation that claims to be marketing-savvy couldn't contain itself. Excessive news coverage provided the equivalent of million of dollars in media exposures. Pleas of "Say it ain't so" flooded Ty's Web site. Hobbyists drove up the price of Beanies -- originally priced at $5 -- on auction sites . And specialty retailers across the country reported an uptick in Beanie sales.


Instead of backfiring and alienating customers, the publicity stunt rejuvenated sales. As marketing strategies go, what could have been a Beanie bungle became yet another Beanie boom. reported a 75% increase in bid volume Sept. 1. Three Cardworks stores in Manhattan saw their sales of the plush toys double in the days following the announcement. And the line at Creations & Confections in San Diego extended to the back of the store.

Ellen Benkle, VP-Beanie Babies (yes, that's her title), said customers were queued up outside for the store's 10 a.m. opening. By 1 p.m., hundreds of the plush toys has been sold; by day's end, she estimated she'd sell nearly 1,000.

NPD Group estimated 1998 retail sales of Beanie Babies in the $400 million to $700 million range. But Nintendo of America's Pokemon is gaining ground. Pokemon's retail sales of trading cards alone are about $100 million so far this year. Add to that $60 million to $70 million in videogame sales and $40 million in other toys, and the Beanies have a formidable foe.


Many industry observers said Ty had to do something to reignite Beanie fever.

"Beanie Babies have slowed down with kids this year," said Jim Silver, publisher of Toy Book. "It has run its course. They still have collectors but they don't have the 4-, 5- and 6-year-olds like they did a year ago. That's another reason why they're pulling this marketing scheme."

Marketing experts concur Ty was successful in creating the craze.

"It's hard to fault any strategy that generates ink," said Al Ries, chairman of consultancy Ries & Ries. The plan worked because of the lack of information, he said: "There's a certain power in mystery."

While Ty officials kept quiet, toy industry watchers, the media and consumers buzzed with speculation.

Some said retirement of the current line is necessary because the glut of Beanie Baby knockoffs has gotten out of control. Others theorized the line will continue, but will be revamped with hologram tags to prevent counterfeiting.

In February, Ty registered at least several names such as Bean E Bear, E Buddy and E Beanies. The company also has a contract with McDonald's Corp. for Happy Meal promotions that extends past this year.


Since Beanie Babies were first introduced in 1993, founder Ty Warner has simultaneously managed to confuse and court customers. He has manipulated supply and demand of the toys, often creating artificial scarcity and buying frenzies for the Beanies. The brand has been built on buzz, not ad support.

"That man is an incredible marketing genius and that's an understatement" said Mary Beth Sobolewski, editor in chief of Mary Beth's Beanie World.

The company further intrigued information-starved consumers last week with subtle hints about what was to come. The ominously named The End black bear Beanie was introduced on the same day of the retirement announcement.

Later that day, on the company's Web site, an interactive Beanie named Neon teased customers with: "Did you see the names of all the new Beanies? They all look cool, but I wonder what kind of a name 'The End' is? It seems like a really odd name to me."

Especially since this tale is only just beginning.

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