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SUMMER HARVEST; `STAR WARS' LEADS PACK OF SUMMER '99 MOVIE TOYS ALREADY TAKING ROOT ON STORE SHELVES, AND SALES ARE EXPECTED TO BE HUGE.

Byline: Dave McNary Daily News Staff Writer

As toy merchants scramble to stock up for the holiday season, frantic over whether they'll have a hit like 1984's Cabbage Patch Kids or 1994's Power Rangers, they can take comfort in one vital fact: The Force is with them.

``Star Wars: The Phantom Menace'' will storm into the world's theaters next May, giving the toy business and movie merchandisers a lock on a solid summer. Hundreds of new versions of one of the most tried-and-true product lines, which has already generated $2 billion in revenues, will line store shelves.

Analysts believe the summer of 1999 will be among the richest periods ever for the lucrative licensing/merchandising world, thanks mostly to George Lucas' careful management of the merchandising of Luke Skywalker, Obi-wan Kenobi and the ``Star Wars'' franchise.

Other licensed toys could do well this summer, analysts say, including the merchandise tied to Walt Disney Co.'s ``Tarzan'' and ``The Wild Wild West'' from Warner Bros. But it's the new ``Star Wars'' that has everyone talking.

``Something tells me George Lucas wants this story to connect with the public,'' said Kevin Skislock, principal with Laguna Research Partners. ``I think it will. He's a great storyteller, and it's going to be very compelling to find out what happened in the period before `Star Wars.' ''

Even now, more than six months before its opening, ``Phantom Menace'' fever is heating up.

``It's fair to say that the release of the next film is likely to be the biggest event the motion-picture industry has ever seen,'' said John Taylor, an analyst with Arcadia Investment Corp. ``So the entire business - retailers and licensees - are biting their nails waiting. It's just getting started.''

Taylor said retailers believe that 75 percent of the action figures they sell next year will be related to ``Star Wars.''

``There's no question that it will be the dominant property,'' he added.

Hasbro will be the primary beneficiary of that popularity. The toy company has held the top ``Star Wars'' licenses for two decades and recently consolidated that status by buying Galoob Toys, which has held a license from Lucasfilm since 1992 for miniature vehicles and action figures less than 2 inches tall.

Which isn't to say others can't succeed despite the ``Star Wars'' juggernaut.

Analysts point out that not every consumer will want to buy ``Star Wars'' memorabilia and that summer is the critical period for launching new properties that can spin off into sequels, TV shows, toys and videos.

``Overall, it's going to be a very big year for licensing,'' said Gene Scher, a partner at Los Angeles-based consultant November Lazar Scher.

`` `Phantom Menace' will pull everybody up. The industry has needed a real big winner for a while, and as a result, things are going to pick up for everybody.''

Scher noted that when the original ``Batman'' became a surprise blockbuster in theaters and retail stores in 1989, its momentum carried along other licensing/merchandising programs.

``When there's something exciting out there, other things get the heat and everyone benefits,'' he said. ``I would expect that the heat for the new `Star Wars' is going to help `Star Trek,' which continues to sell well.

``There's a lot sold to adults. When you see $2,000 `Star Trek' collectibles, you know those aren't being sold to 5-year-olds.''

New Line Cinema, well-regarded for its ability to market offbeat films, is already selling merchandise for its ``Phantom Menace'' challenger, ``Austin Powers II: The Spy Who Shagged Me.''

It has started selling goofy ``Austin Powers'' items, based on Mike Myers' stuck-in-the-'60s spoof of British secret agents. Halloween costumes of Austin Powers, sidekick Vanessa Kensington, nemesis Dr. Evil and the Fembots hit stores several weeks ago.

Although the ``Austin Powers'' sequel, with Heather Graham as CIA agent Felicity Shagwell, won't hit theaters until June 11, New Line will start a major push long before with scores of oddball items. Among them:

The ``Shaguar'' toy car, based on Austin Powers' 1967 Jaguar XKE.

A plush toy based on Dr. Evil's hairless cat, Mr. Bigglesworth (``the world's first hairless plush toy,'' a New Line executive notes).

Martini and shot glasses.

Refrigerator magnets and greeting cards with lines from the 1997 movie like ``Very shagadelic!'' and ``Oh, behave!''

An Austin Powers cardboard stand-up spouting lines like ``Yeah, baby, yeah!''

Silly Slammers, ball-size plastic replicas of the heads of characters that also speak lines from the movie when thrown against a surface.

``We're trying to do things a little differently from `Star Wars,' with a certain irreverence,'' said David Imhoff, New Line's executive vice president of worldwide licensing and merchandising. ``We're aiming for a slightly older audience that's going to find these things funny. But there will never be so much that people feel they're being bombarded.''

Curiously, the merchandising push - now amounting to 35 licensees with 100 items - comes more than a year after the original movie left multiplexes. It grossed a respectable $54 million domestically with almost no merchandising behind it.

``The whole `Austin Powers' concept really caught fire when it hit video earlier this year,'' Imhoff said. ``The home video sold almost 2 million units. Mike Myers agreed to do the sequel, and now we've got retailers coming to us saying, `We want this.' Our merchandising program is an anomaly by starting almost a year before the movie's out.''

Jim Silver, editor of the Toy Book newsletter, said some ``Austin Powers'' merchandise may click with an older audience. ``It's not a home-run property, but it could do quite well for secondary, niche licenses,'' he said.

Prospects are still murky for the licensing property of other competing summer releases, although action figures, vehicles and accessories are expected to go along with ``The Wild Wild West,'' ``Tarzan'' and Disney's ``Inspector Gadget.''

``West'' will carry the built-in marketing apparatus of the 200-outlet Warner Studio store chain, while the latter two will have the impressive backing of the Disney Store operation, with well over 700 locations by next summer.

With ``The Wild Wild West,'' Warner has one of the world's most marketable stars in Will Smith and a potentially strong movie concept that blends the Old West with futuristic machines. Warner executives have said ``West'' items will be aimed toward boys, with an emphasis on the kind of gadgetry seen in the late-'60s TV series.

As for Disney, its well-oiled marketing machine will undoubtedly make major pushes for the animated ``Tarzan'' and the live-action ``Inspector Gadget'' with partners McDonald's and Mattel. Disney Chairman Michael Eisner has already said ``Tarzan'' has potential similar to that of ``The Lion King,'' which generated an estimated $1 billion in merchandise sales.

Scher rates prospects for ``The Wild Wild West'' as ``good'' and ``Tarzan'' as ``exceptional,'' noting Disney's last animated film, ``Mulan,'' performed above expectations in theaters and stores this summer.

Prospects for 1999 are welcome news for makers of toys, video games, T-shirts, posters and key chains after seeing less-than-blockbuster sales from last summer's two largest movie merchandise campaigns, for ``Godzilla'' and ``Small Soldiers.''

Silver noted that neither was a complete flop, given standard royalty rates of 10 percent to 15 percent.

`` `Godzilla' wasn't that bad,'' he said. ``It sold $90 million of wholesale merchandise, partly because Sony followed the movie with a children's TV show. Their royalty is a nice piece of change; it's just not what everyone was hoping for.''

As for ``Small Soldiers,'' the perception that it was too violent for children and Burger King's decision to scale back its campaign as a result of the PG-13 rating hurt its merchandising.

`` `Small Soldiers' had all the makings of a huge line,'' Silver said. ``Before the movie was released, it was sizzling, but the tons of press about the violence just killed it. If it had been less violent, it would have been a huge hit.''

Still, any property can click if it hits at the right time, which is why the wheels of commerce cranking out toys and collectibles never stop turning. The potential is huge: Spending on and by children tripled during the 1990s; children under 6 have become a potent force for properties like the Teletubbies, Barney and Winnie the Pooh; and the average 10-year-old's weekly allowance rose from $7.90 a week in 1991 to $13.93 last year.

``Every four or five years, you have a whole new group of kids come into the market,'' Scher noted.

STARS WARS: Released 1997

1. Han Solo coffee mug - $16

2. Darth Vader sculpture puzzle - $45

3. Power F/X X-wing - $70

4. R2-D2 telephone - $95

5. Yoda Limoges porcelain box - $225

6. Darth Vader collectible nutcracker - $225

7. Life-size Boba Fett - $5,500

8. Life-size R2-D2 - $7,200

SOURCE: FAO Schwartz, Daily News research.

STAR WARS

TITLE: ``Star Wars: The Phantom Menace''

RELEASE DATE: May 21, 1999

STUDIO: 20th Century Fox

STARS: Ewan McGregor, Liam Neeson

MAJOR LICENSEES: Hasbro, Galoob, Lego, Pepsi

STORY LINE:Republic of Naboo battles Nimoudian Federation; Luke Skywalker's father seen in pre-Darth Vader days.

AUSTIN POWERS

TITLE: ``Austin Powers II: The Spy Who Shagged Me''

RELEASE DATE: June 11, 1999

STUDIO: New Line Cinema

STARS: Mike Myers, Heather Graham

MAJOR LICENSEES: Kaboom!, Ata-boy, Hollywood Studios Costumes

STORY LINE:Austin and Felicity Shagwell try to stop Dr. Evil from destroying the world.

CAPTION(S):

Drawing

DRAWING: (Color) no caption (``Star Wars'' tree featuring various products)

Illustration by Bradford Mar/Daily News
COPYRIGHT 1998 Daily News
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1998, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:BUSINESS
Publication:Daily News (Los Angeles, CA)
Date:Oct 18, 1998
Words:1564
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