New York City.  The 101st Annual American International Toy Fair opened here on Sunday in the wake of a tough holiday season for the industry.  Not only did two major toy chains enter bankruptcy after a brutal price war with Wal-Mart (see 'KB Toys Files Chapter 11' and 'FAO Schwartz Carved Up'), the over-all industry was down as well.  According to figures released Monday by market information provider The NPD Group, the toy industry saw sales drop 3% in 2003, from $21.3 billion in 2002 to $20.7 billion in 2003.  Among the hardest hit categories were action figures and accessories, which dropped 15% vs. 2002 despite major sales of licensed toys based on The Incredible Hulk, Teenage Mutant Ninja Turtles, and Lord of the Rings. 

 

Although some 1,500 exhibitors, including 250 first-timers, participated in the show, it seemed to us that the number of showrooms at 200 Fifth Avenue and adjacent buildings, more expensive space than the exhibits in the sprawling Javits Convention Center, was down.  And the consolidation of most toy sales into a handful of customers (now down to the Big Four (Wal-Mart, Target, K-Mart, and Toys R Us) makes Toy Fair primarily a press and rights event for the large toy companies, since the big chains have made most of their buying decisions for the holidays months ago.  Nothing could have illustrated this more clearly than watching the receptionist at the Hasbro showroom turn away an independent retailer that was asking to view 2004 lines, explaining, 'This is a press show only.' 

 

But Toy Fair is still the largest trade event for the toy industry in the U.S., and it offers a great opportunity for us to see and report on the lines that retailers will be selling in 2004.   Our on-site coverage begins today, and will continue until we've covered the numerous announcements (which actually began to hit over a week ago) that toy, game, and other companies time to coincide with the event.