Sunday, July 11, 2010
by Emily Maltby
Sunday, July 11, 2010
BCP Imports LLC, maker of the Silly Bandz bracelets that have become an accessory de rigueur on elementary school playgrounds, is the latest small company looking for a way to extend its appeal with pint-sized customers.
Retailers selling the packs of 24 bracelets for $5 to $7 a pop cannot keep them in stock, and the company has had to hire more than 350 employees since October, according to founder Robert Croak. Silly Bandz have generated more than $100 million in annual sales, he says.
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But keeping Silly Bandz on kids' wrists—and radar screens—won't be easy, some say.
Gene Murtha, the former head of Main Street Toy Co. in Simsbury, Conn., sees similarities between Silly Bandz and Slap Wraps, the fad his old company developed.
Slap Wraps were long pieces of fabric-covered metal that coiled into a bracelet when slapped on the wrist. Like Silly Bandz, they were both a fashion accessory and a bartering chip on the playground. The craze ballooned in 1990 but burst the next year.
Mr. Murtha, who blames the bust in part on a falling out between the company's partners, says he should have capitalized on the fad by branching out.
"A smart business plan is to take a product and develop it into a brand," says Mr. Murtha, now chief executive of the teddy bear company Gund, a division of Enesco LLC in Itasca, Ill. He recommends that Silly Bandz make more "silly" things to avoid being a one-hit wonder.
Mr. Croak is already moving in that direction, by selling Silly Necklaces and Silly Buttons.
Still, through the decades plenty of toys developed by small companies—think Pet Rocks and Pogs—became all the rage but failed to maintain long-term appeal. Kids, who determine the fate of such products, can be fickle consumers.
"In six months, a child's view of life has changed dramatically," says Wendy Liebmann, chief executive of WSL Marketing Inc. in New York, which conducts research on retail strategy. "For a child to be absorbed in something, that means that you need to constantly reinvent it."
Some companies have managed to parlay a passing trend into a sustainable hit through licensing opportunities. After creating the Teenage Mutant Ninja Turtles comic book in the late '80s, Mirage Studios Inc. managed to ink enough deals to turn its half-shelled heroes into action figures, television stars, and characters on towels and bedspreads. The Turtles even experienced a relatively recent comeback following the "TMNT" movie three years ago.
Others have tried marketing ploys. Ty Inc., a once-small firm that experienced explosive growth with its flagship product, Beanie Babies, kept the consumer frenzy going by promoting its creatures as must-have limited editions.
"Part of the appeal is if it's hard to find," says Tim Walsh, a toy historian in Sarasota, Fla.
Some companies try follow-up toys. In the late '90s, Tiger Electronics, a midsize company in Vernon Hills, Ill., enjoyed mercurial success with Giga Pets—animated, electronic characters in a hand-held device that kids could control. But as the toy's popularity died out, the company introduced a new kind of pet: Wide-eyed creatures called Furbies that could communicate with each other. Hasbro Inc. launched Furby in 1998, shortly after acquiring Tiger Electronics.
Silly Bandz's Mr. Croak says his small company is adapting to consumers' transient tastes by taking suggestions from Twitter and the Silly Bandz's online fan page—options entrepreneurs of the past didn't have. Most of the colors and designs being developed today, he says, are generated from the hundreds of suggestions he receives each week.
He is also trying to secure licensing deals to spread the craze into other markets, such as school supplies, board games and smartphone applications. And taking a page from Beanie Babies, Silly Bandz's Spring pack of butterflies, bees and tulips, has been retired, and won't return with the same shapes.
Still, there are skeptics who think the Silly Bandz brand isn't strong enough to last. In order to draw a new wave of children, a product needs to change the way they play, says Gary Cross, professor of modern history at Penn State who specializes in consumption, childhood and leisure issues.
"It's not clear in what way [Silly Bandz] are transformative," he says. "Fads that are built around schools and peer association have been around a long, long time and those things have come and gone."
—Write to Emily Maltby at emily.maltby@wsj.com
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