BEANIE COUNTERS; COLLECTORS BAGGING BIG RETURNS THROUGH $5 TOYS.

Byline: Vivian Marino Associated Press

Seven-year-old Jacob Vanderwiel keeps his most cherished toys - palm-sized, polyester beanbag animals with names like Tobasco the Bull and Roary the Lion - safely tucked away in a canvas duffel bag.

He sometimes takes them to school to share with fellow first-graders in Naperville, Ill. He likes learning about all the species they represent or just tossing them up and catching them.

Myrtle Vanderwiel, 44, shares her son's passion for the cuddly critters, but for other reasons: ``Many of them have become quite valuable, especially the retired ones. I buy extras and I do shows and sell some.''

And so goes the tale of Beanie Babies.

Since they first flopped into the lives of children four years ago, ``Beanies,'' as they're affectionately known, have sprouted like Jack's magical beanstalk, complete with a thriving secondary market and a barrage of imitators fiercely vying for beanbag bucks. Some of the toys, originally priced at $5 apiece, sell for hundreds, even thousands, of dollars to serious collectors.

A complete collection - that is, 179 varieties and various generations of each, or 600 Beanie Babies in all - is valued at $100,000, according to Mary Beth Sobolewski, editor of Mary Beth's Beanie World, an independent magazine.

There are numerous Beanie Internet sites, Beanie collectors shows, Beanie accessories businesses, and handbooks, one of which even briefly made it onto the best-seller lists earlier this year.

It sure ain't kid stuff any more.

But are Beanie Babies truly an ``investment'' as the collectors and the handbooks claim? Will they take their place among the venerable Barbie doll and continue to grow in value? Or, will they follow the Cabbage Patch doll and Tickle Me Elmo and fade from popularity?

``I see the market holding up for another year. (But) I don't know if these things could be huge five, 10, 20 years from now,'' a distinguishing factor of true collectibles, said Steve Ellingboe, editor of Today's Collector, an antiques and collectibles monthly newspaper.

Countered Sobolewski: ``I don't see any end in sight.''

An avid collector herself (She's one of about 100 in this country to have the complete set), Sobolewski dismisses the notion Beanies are a fad. She notes the subtleties distinguishing the valuable from the common: different generations of identifying ``hang'' and ``tush'' tags, the occasional mistagging or mistakes, changes in fabric color, material or style from one ``generation'' to the next, limited supplies and discontinued lines, or ``retirees.''

All are orchestrated by Ty Inc., a privately held company based in Oak Brook, Ill., and its owner, toy designer Ty Warner, who introduced Beanie Babies in January 1994. The company doesn't release sales information or specifics about its business, spokeswoman Anne Nickels said. But Nickels did say Ty officials were taken aback by Beanies' success.

``We thought they would do very well, but we had no idea it would become a phenomenon,'' she said.

What little is known about the 13-year-old toy company reveals tremendous growth: It has added on product lines, including a collection of larger Pillow Pals; hired more workers, moved to bigger headquarters; and installed special software to help answer its 175,000 daily calls.

Ty's deliberate low-profile has added to Beanies' investment appeal: It doesn't advertise or sell to big chains like Toys `R' Us and does only a few promotions, like giveaways at sporting events. It only recently authorized an ``official'' membership club in conjunction with Gloucester, Mass.-based Cyrk Inc. It also has teamed up with McDonald's Corp. in a wildly successful Teenie Beanies promotion.

Harry L. Rinker, president of Rinker Enterprises Inc., an antiques and collectibles research center in Emmaus, Pa., said he's suspicious of the frenzy surrounding Beanies and believes consumers eventually will tire of it.

``Ty is manipulating the market,'' he said. ``By discontinuing or retiring certain Beanie Babies, it's fueling demand. Then it's taking advantage of that demand and upping production of other Beanies.''

Not so, said Nickels: ``To make way for new products we retire old products. This goes on in any industry.

``We are not connected with the secondary market at all. As far as we're concerned, we've created an inexpensive toy . . . that we thought was a nice, nonviolent toy for kids.''

The most coveted Beanie Baby still being produced is Princess, a purple bear with a white rose, commemorating the death of Princess Diana. Introduced in December with a suggested retail of $5, some stores and collectors have been selling the bear for up to $300 due to its limited availability. (Ty donates its profits from the sale of the bear to a Diana memorial fund.)

Some collectors boast their Beanie Baby produce higher returns than most stocks. But Rinker thinks the secondary market for Beanies is speculative and prone to collapse.

``It's the hot toy of the moment,'' he said. ``But in 1999, George Lucas' new Star Wars movie will be out. No one will care about Beanie Babies.''

Beanie all-stars

Some Beanie Babies are now worth much more than their $5 issue price. The 10 most valuable, according to Mary Beth's Beanie World Magazine:

Peanut the Royal Blue Elephant

$5,200

Brownie the Brown Bear

$4,750

Derby the Fine Mane Horse

$4,750

Teddy, the New Face Violet Bear

$4,500

Nana The Monkey

$4,400

Punchers the Red Lobster

$4,300

Quacker the Wingless Duck

$2,800

Humphrey the Camel

$2,400

Chilly the Polar Bear

$2,400

Slither the Snake

$2,400

Associated Press

CAPTION(S):

2 Photos, Box

PHOTO (Color) Ty's ``Jerry Garcia'' Beanie Baby

PHOTO (Color) no caption (bat, iguana and crab Beanie Babies)

BOX: Beanie all-stars (See Text)