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1993 U.S. TOY SALES: EXPERTS SAY "TOYS 'R' UP"

-- Affordable High-Quality and Licensed Toys To Drive Toy Industry
 Sales According to Duracell Toy Industry Forecast --
 BETHEL, Conn., Sept. 16 /PRNewswire/ -- High-quality toys for $20-and-under and "dino"-licensed toys will fuel an increase in 1993 U.S. toy sales compared to last year, according to toy industry analysts, manufacturers and experts. These toy industry predictions are compiled in the Duracell Toy Industry Forecast (DTIF), released today by Duracell U.S.A., the leading alkaline battery manufacturer and six-year toy-trend watcher.
 Of the 21 toy industry experts responding to the second annual DTIF, two-thirds believe the $17 billion toy industry will enjoy a 1 to 4 percent increase in 1993 sales, while financial analysts, the most optimistic group of respondents, predict a sales increase in the range of 5 to 10 percent. Toy manufacturers responding to the DTIF questionnaire were more conservative in their predictions. None of the experts surveyed predict an increase that would rival last year's banner 12 percent increase in toy sales.
 This year, experts are also predicting the fourth-quarter holiday shopping
season will be better than the same period in 1992. Fourth quarter is a critical selling period when approximately two-thirds of all toy industry sales and 40 percent of all battery sales occur.
 "Toys are an important part of our business, due to the fact that 20 percent of all Duracell batteries sold are used to power electronic toys and games," says Duracell spokesperson Bunny Webb. "The information we provide in the Duracell Toy Industry Forecast, combined with the results of our annual Kids' Choice National Toy Survey, helps consumers choose quality toys that children like and that also promise long-lasting play appeal."
 The DTIF was conducted via a detailed questionnaire developed by Duracell and distributed to industry experts: Nearly half of the respondents were toy manufacturers, including some of the largest. The remaining participants were financial analysts who follow the category, toy industry trade publication editors and recognized industry consultants. The results of the questionnaire were processed and analyzed by Rowan & Michaels, Inc., an independent research firm. The first annual Forecast compiled and released by Duracell in September 1992 accurately predicted a banner year for the toy industry.
 Good New$ for Parents
 Experts who participated in the DTIF unanimously agree that the $20-and-under toy trend, noted in 1992 DTIF, will continue this year. Toy manufacturers have responded to cost-conscious consumers looking for the best value by offering a large number of toys in this price range, as noted at American International Toy Fair last February.
 Respondents also ranked child preference, price, quality and long- lasting play appeal as the most important factors affecting parents' purchasing decisions this year.
 "In the 1992 Duracell Kids' Choice National Toy Survey, we found for the first time that the children's favorites did not necessarily correlate with higher-priced toys," says Ruth Roufberg, independent toy consultant to the Duracell toy survey. In fact, in last year's survey results, the top three favorite toys chosen by more than 650 children were all $20 or less. Roufberg adds, "Although we don't put a price restriction on the toys involved in the survey, this year, 75 percent of the 24 toys being tested are in this affordable price range."
 Analyst Sean McGowan of Gerard Klauer Mattison & Co. says retailers benefit from offering $20-and-under items because lower prices can stimulate higher turns, which makes it easier for retailers to make gross margin percentages. Also, low price points encourage year-round sales.
 Milton Bradley Company's $20 toy "Knock Out" was chosen as the number one toy in the 1992 Duracell Kids' Choice National Toy Survey. Senior vice president of marketing at Milton Bradley, Dale Siswick, says low-cost toys help to increase the purchasing power for parents. "We sell games for more than $20 only when the cost of materials or technology pushes us there. It's only logical to strive to keep our products affordable."
 Toys Are Licensed to Drive Sales
 Licensed toys are going to have a much greater influence on toy sales this year as compared to 1992, according to three-quarters of those surveyed, including all of the financial analysts. Experts cite the popularity of dinosaurs, being spurred by the film "Jurassic Park" and television's purple "dino"-star "Barney," as the major influences. "Thomas the Tank Engine" is also considered by some to be another popular license, as is "Aladdin," which is expected to be released on home video in time for the holiday season.
 "In my 20 years in the toy business, I have never seen so much licensed
hype as I have this year," says Ruth Roufberg. "In tougher economic times, licensing is a quick and easy way for toy manufacturers to increase sales without creating an original concept or spending many advertising dollars." She explains, "If a consumer is comfortable with the theme, they will have confidence in the product."
 Discovery Toys, Inc.'s Georgiann Kennedy believes licensing is a smart way for toy manufacturers to reach consumers they've been missing. "Increased consumer demand in this area has pushed companies into partnerships and products that fill the gaps and are profitable for businesses," she says.
 'Tis the Season...to Shop
 Experts participating in the DTIF believe consumer demand and slightly improved employment rates will help spur holiday sales over 1992 fourth-quarter sales.
 Retail industry analyst Ed Johnson of Lynch, Jones & Ryan Inc. is expecting
retail sales volume gains of 6.5 to 8.5 percent this holiday season. While Johnson isn't expecting last year's 9.5 percent increase "barn burner," he predicts, "it will be a good Christmas and certainly better than 1991's dismal results."
 Slow economic recovery and weak consumer spending lead Ronald Leong, Pressman Toy Corp.'s vice president of marketing to say, "Value still seems to be the key word for consumers across categories and toys will be no exception."
 Growth for Toys That Teach and "Tot" Toys
 Participating toy industry analysts and experts are forecasting that educational, preschool, electronic and classic toys, as well as video game categories, will grow in 1993.
 Educational Toys
 "Toy makers have stressed the fun aspects of learning," says Sean McGowan, analyst with Gerard Klauer & Mattison, Co. This makes sense, according to toy consultant Roufberg. She applauds toys that teach because her experience reveals kids like them, too. In 1991, children in the Duracell toy survey ranked "GeoSafari Jr.," an overtly educational toy, in the top five. And in last year's survey, though no top-10 toys were labeled as "educational" in the traditional sense, the children's responses indicated they liked toys that stimulated and challenged them, provided important educational learning values, enhanced growth in and experience with motor skills coordination, fostered social and character development and enabled them to experience the spirit of competition.
 "The results of Duracell's toy surveys suggest that children want toys to be toys," Roufberg says. "Most important is that a toy should be fun and that a child enjoys playing with it. And if that child learns something from playing with the toy, that's even better."
 Preschool Toys
 Toy industry experts expect licensed toys, along with the growing number of new parents who delayed starting families, to help boost sales in the preschool toys category. Manufacturers like Hasbro Inc.'s Playskool, Rubbermaid's Little Tikes and Fisher Price, recently acquired by Mattel, should fare well.
 Electronic Toys
 The advancement of toy-related technologies affords manufacturers the opportunity to deliver a quality electronic toy at a more reasonable price. Therefore, experts predict lower-priced electronic toys will spur growth in the category.
 Classic Toys
 Toy industry staples -- classic or "back-to-basic" toys -- continue to sell well as they appeal to parents' and grandparents' nostalgia and are recognized for having long-lasting play value. "In a sluggish economy, consumers stick with the basics: toys that have been tried and true," says Kim McLynn of
Western Publishing Co. Some of these classics include Barbie, Lego, Erector, Tinkertoys and Monopoly.
 Video Games
 Experts are optimistic for 1993 video game sales, with an expected increase of up to 5 percent most likely. None of those surveyed said video games sales would decrease.
 "Consumers are demanding good value in all their purchases. This means a toy must provide excellent play-value for the price," says Laurie Lively Smith, analyst with The Seidler Companies. "This is why expensive video-game cartridges are popular, despite the high absolute price point."
 Retailer Registers Ring
 There is strong agreement among the experts that toy-only and discount chains will benefit the most this holiday season, and independent stores are likely to be hardest hit. Analysts also predict that specialty stores will suffer this year.
 Among the reasons cited are the low prices, wide selection and easy accessibility of toy chains and discounters. "Toys 'R' Us, Kmart, Wal- Mart and Target are extremely price competitive and will be using low prices on toys to lure customers to their stores," says analyst Smith. She adds that some independent stores offer upscale toys that discount chains don't carry.
 For the independent stores, such as "mom-and-pop outlets," experts say higher prices, lack of distribution and location will hurt them this holiday season. "Regional discounters are under more pressure from the 'Bigs.' Specialty chains have had difficulty making profits in strong years," says Donald Gibbs, Tomy America's senior vice president of marketing and sales.
 And how will the loss of Child World and Lionel Leisure and the closing of 250 Kay-Bee stores affect the toy industry? The answers vary. Some believe Toys 'R' Us and the discount chains will pick up the lost business, especially if they are in close proximity to the closed stores. Others say it will have no affect on the industry.
 Analyst McGowan thinks it will skew manufacturer shipments to later in the year, because the defunct chains took product early. He also believes that strong manufacturers will be more selective about to whom they ship.
 Toy trade publication representatives, including the publishers of Toy & Hobby World International and The Toy Book, believe specialty stores will ultimately benefit.
 Toys are Child's Play
 While toy industry analysts and experts have their own approaches for making predictions, Duracell believes the answer is as simple as "child's play." So, this fall, for the sixth consecutive year, Duracell's annual toy survey will challenge more than 650 children in 30 cities to evaluate 24 new toys and vote for their favorites. Duracell will announce the 1993 "Kids' Choice" results in November and December to help consumers select toys for eager pint-size recipients that stimulate creativity and offer long-lasting play appeal.
 -0- 9/16/93
 /CONTACT: Lisa Dimino of Ogilvy Adams & Rinehart, 212-880-5350, or Bunny Webb of Duracell, 203-796-4594/


CO: Duracell, Inc. ST: Connecticut IN: REA SU: SLS

SM -- NY030 -- 2780 09/16/93 15:28 EDT
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Date:Sep 16, 1993
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