A few thoughts on BMO Capital’s Top 10 Christmas Toy List

December 18, 2009

In my last blog entry I posted BMO Capital’s Top 10 Christmas Toy List. I did a little analysis and below is what I found. For your reference, I have repeated the list at the bottom of this post.

What really stuck out at me was that this investment firm, that covers publicly held companies, had listed the top 5 toys as coming from the private sector. Cepia, Lego, Spin Master and MGA have the top five positions (Spin Master has two of the five toys cited). In fact, the list is dominated by the privately held companies. 7 of the 11 companies listed are privately held.

I found that very reassuring for the industry. It means that despite the deep pockets of public companies like Mattel and Hasbro, there is still plenty of room for smaller companies with great products. This should be very encouraging for toy manufacturers. It should also send a strong message to toy retailers: Balance your program like you do your financial portfolio. In other words, don’t just invest in the biggest companies and the most evergreen products. Make sure you include the smaller companies and the newest products.

I was also pleased to see that even in a recession year, innovation is still rewarded. Of the top 10 items, five (Zhu Zhu Pets, Moxie Girlz, Liv, Mindflex and Printies) were totally new for 2009.

The recession could not, however, be ignored as this was the year for affordable price points. Most of the toys listed are priced in the low to mid double digits.

The big exception on the list was Mindflex from Mattel. It is $79.99 and the demand is hot. This told me that consumers, even in hard economic times, will pay for technology as long as it is truly innovative and exciting.

The race is almost over for 2009. It will be interesting to see how 2010 shapes up. I am betting on a good year.

1) Zhu Zhu Pets (Cepia, Private)

2) LEGO (LEGO, Private)

3) Bakugan (Spin Master, Private)

4) Moxie Girlz (MGA Entertainment, Private) & Liv (Spin Master, Private

5) Mindflex (Mattel, MAT)

6) Nerf Blasters (Hasbro, HAS

7) Toy Story (Mattel, MAT/ Thinkway, Private)

Printies (Techno Source, Private