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Tue, Dec 18, 2001 - Page 21 News List

Cautious US toy chains may miss surge in demand

RETAILERS Santa might have trouble filling his sack as toy stores have reduced inventory, fearing shoppers wouldn't spend

BLOOMBERG , NEW YORK

Analysts predict stores may run out of Hasbro's BIO Mechanical Bugs, some Mattel's "Barbie in the Nutcracker" products and the Fisher-Price Rescue Heroes. Lego's US$89.99 Hogwarts Castle and Mattel's Levitating Challenge, both tied to the movie Harry Potter and the Sorcerer's Stone, are also becoming tough to find, said Chris Byrne, a consultant.

"The demand is outstripping supply almost threefold on Harry Potter products," McNally said.

Some retailers said they hope to persuade shoppers to pick up a different toy if they can't find the one they want in the stores.

"Our inventory comes down almost no matter what," said K-B Toys spokesman John Reilly. "This is our time of year. We're not going to cut off our nose to spite our face."

Toys "R" Us officials couldn't be reached to comment.

US retailers' sales at stores open at least a year for the November to December holiday season are forecast to rise 1.5 percent, the smallest gain since at least 1985, according to Bank of Tokyo-Mitsubishi Ltd.

Retailers may have a tough time stocking shelves as some toymakers dip into inventory slated for next year to fill holiday orders. Shoppers who go to stores in January with cash and certificates they received as gifts may have trouble finding the products they want.

"If you don't have a good selection, you miss a lot of sales" and get off to a weak start for the whole year, said Reynolds of Brio, the US division of Stockholm-based Brio AB.

Brio received 50 percent to 60 percent more calls from retailers such as FAO Schwarz and Zany Brainy Inc in the two weeks after Thanksgiving than the same period last year.

"We'll end up with zero products in some categories," he said.

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