[0] Holidays Looking Bountiful for L.A. Business.

Razor Keeping Its Fad Rolling

Razor USA is riding high.

The Cerritos-based exclusive distributor of one of the hottest products this holiday season, the Razor scooter, is frantically filling orders from its cavernous, scooter-packed warehouse. And just last week, it scored a notable victory when U.S. District Judge Manuel L. Real issued a temporary restraining order that prevents copy-cat competitors from selling knock-off scooters until Dec. 4.

These are heady times indeed for Razor, the same kind enjoyed by countless other fad-product distributors in years past. But if history is any indicator (and it almost always is) the Razor scooter will soon go the way of the Hula Hoop, Tickle Me Elmo and Cabbage Patch dolls, and countless other must-have toys of yesteryear.

Razor officials are determined to not let that happen.

Although they're projecting that some 5 million Razor scooters will be sold in the United States by year end (at $100 a scooter, that's $500 million in retail sales for 2000), Razor officials are not becoming overly fixated on the present bonanza.

They're embarking on a campaign to keep their product popular for a long time to come -- turning scooter riding into a verifiable sport where scooter athletes and teams challenge each other in executing daredevil tricks.

"Keeping the craze alive is on everybody's mind," says Razor USA's 39-year-old President Carlton Calvin.

"The main strategy is to encourage it to be a sport," said Calvin, a former lawyer who previously distributed finger boards, those miniature skateboards that kids ride with their fingers.

While the scooter-as-sport strategy may seem far-fetched, it could work, said Larry Weindruch, a spokesman for the National Sporting Goods Association, a trade organization.

"Skateboarding bottomed out in the mid-1990s, and when the X Games became more established, skateboarding picked up again," Weindruch pointed out. Last year, there were 1.6 million skateboards sold in the United States, up slightly from 1.5 million sold in 1997.

But keeping scooter sales rolling along for years into the future won't be easy.

"Scooter manufacturers have to be on the warpath if they want their sales to increase," he said.

Team Razor

To implement his grand scheme, Calvin has created Team Razor, a group of young scooter enthusiasts who are visiting major stores and demonstrating the pantheon of tricks that can be performed with the aluminum toys.

"I've got a kid who can do a 720," Calvin said, referring to the double full-circle turn one of the team members is able to perform.

He is also producing a 35-minute video called "Evolution" that will show kids how to do tail whips, jumps, ollies and twirls with their scooters.

Razor USA also plans to sponsor several scooter competitions, and is trying to get the two-wheeled vehicles entered into X Game competitions around the country.

But while scooter manufacturers (the same ones that Razor is suing over patent infringement) are encouraged by the marketing efforts, sporting goods experts wonder if such tactics will be enough to grow the market.

"Once kids using scooters are old enough to drive, watch out," Weindruch said. "Inline skating is hanging on because it is something people can do as adults. The only adult who doesn't look foolish riding a scooter is actor Kevin Spacey, who was shown riding a scooter earlier this year."

Marketing experts note that another way to keep a fad alive is to create a series of new products that consumers feel they need.

"I think the reason Barbie is still around is that they have changed it on an ongoing basis," said Dave Stewart, a professor of marketing at the Marshall School of Business at USC. "You don't buy one Barbie. You buy this Barbie or that Barbie. There is a constant change of product. But scooters are harder to change than Barbie. It is not clear how many different ways you can make a scooter."

New models

Nevertheless, scooter manufacturers will be coming out with new models next year. Asa Products Inc., based in the City of Industry, has been importing five different scooter models from China since June. The scooters now account for 95 percent of the company's sales, said Melody Hsieh, chief financial officer of the family-owned business. Before the scooter craze hit, Asa imported and distributed computer parts and radiators.

Next year, Asa plans to distribute three new models of scooters, one designed for extreme sports, an adult model and an electric scooter.

Razor USA, whose scooters are manufactured by J.D. Corp. of Taiwan, is developing several new scooter models for next year and adding a line of apparel and accessories that are expected to be in stores by late this month.

The new models include an ultra-light scooter made out of carbon fiber. It will weigh only 4 pounds. Another is a cruiser scooter that has a flexible, springy deck geared for adults. The third is an electric scooter that will retail for about $400.

Hayley Kissel, a sporting goods analyst with Merrill Lynch, said it's hard to predict if the scooter will last beyond next year. She isn't optimistic.

"It is obviously the Christmas gift of choice for children," she observed. "The biggest concern I have is what I have seen with many leisure goods. Lots of companies come in with a product, flood the market and then you have a major inventory overhang. I think by the second half of next year, the scooter craze will have laid its course."