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The K'nex Thing For The Lego Set


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THE K'NEX THING FOR THE LEGO SET

The toy business is nothing if not conservative: In the face of fickle preteen tastes, manufacturers tend to stick with the tried and true. So toyland novice Joel I. Glickman didn't get far when he pitched his idea for a novel construction play set to the big guys three years ago. Hasbro and Mattel passed on the proposal. LEGO, which develops all of its own products, didn't even give Glickman a hearing.

Undaunted, Glickman shopped his concept directly to Toys `R' Us, the giant retailer, as well as to discounters Meijer and Target Stores. Sure enough, his K'NEX flew off the shelves last autumn in tests in Philadelphia and Detroit stores. Now, heading into its first Christmas season, K'NEX is a genuine phenomenon. Powered by a $7.5 million TV campaign (paid for with investments from friends and relatives) and bolstered by big advance orders from distributors and retailers, Glickman expects to sell all of the $25 million worth of K'NEX that his Connector Set Toy Co.'s Hatfield (Pa.) factory can produce this year. "The demand is much greater than anything we can make," he says. Pollster Maureen Michaels, who has seen kids warm to the toy in surveys, says: "It has the potential to be a real hit."

JUMP-START. This Christmas season could use some hits. Kidder, Peabody & Co. figures toy sales, including fast-selling video games, will rise by a respectable 11% this year, to $22.5 billion. But that's down slightly from last year's nearly 15% surge. To make sure sales chug along at a steady pace, many toymakers and retailers jump-started the season with November price-cutting and discounting. Mega-retailer Toys `R' Us Inc. turned out a coupon-laden insert for the Nov. 7 editions of newspapers nationwide. The brochure offers discounts on a variety of toys, including K'NEX. The catch: Coupons expire on Nov. 30.

By building sales early, toymakers and retailers hope to avoid having to count on a last-minute sales surge like the one that pulled their chestnuts out of the fire last Christmas. "We think the recession is ending, but we're not taking any chances," says Mattel Inc. Chief Executive John W. Amerman.

As usual, a few top-selling toys have emerged (table), including K'NEX. What is a K'NEX? Imagine something between LEGO and Tinker Toys: Children plug together color-coded rods and odd-shaped pieces to build everything from spaceships to Ferris wheels. In some surveys of kids' preferences, K'NEX has beaten LEGO's popular sets. Parenting magazine calls it one of the season's best. Contributing Editor Christine Olson says K'NEX "is kind of a breakthrough. There aren't too many difficult parts but enough that you can put them together in a zillion different configurations."

Glickman, 52, isn't your typical toymaker. His family business, Rodon Group, sells injection-molded plastic products, such as eyeglass cases and the plastic doodads that keep home-delivery pizza boxes from collapsing. That stuff produces $40 million in annual revenues for Rodon. A former art student, Glickman got the idea for K'NEX while bending plastic straws at a wedding. He teamed his plastics expertise and Rodon's state-of-the-art molding machinery with his designer's eye to churn outprototypes.

Credit his success in part to timing. Construction toys are hot: U.S. sales last year reached $267 million, up 13.6%, according to the Toy Manufacturers of America. Rivals know a good thing when they see it. LEGO is introducing 71 new products this year, including LEGO TECHNIC sets that familiarize kids aged 7 to 14 with gears, pulleys, and beams. Meccano, a French outfit, in 1991 reintroduced updated Erector Sets after a 10-year absence from the U.S. market.

RAVES. K'NEX has several advantages. First, both kids and parents seem captivated. "It's easier to build with them than Tinker Toys or LEGO, and when you're done, it really operates," saysViola Moriarty of Broomfield, Colo., whose eight- and six-year-old daughters will share a $60 K'NEX. A poll of 850kids by FamilyFun magazine named K'NEX best of class among building sets. Experts praise the new sets for developing creativity: "A wonderful toy," says toy consultant and reviewer Ruth B. Roufberg. Glickman has been hitting the educational theme hard, bringing a 2,000-square-foot traveling exhibit of K'NEX to science and children's museums in 13 cities this year.

The glowing reviews haven't hurt--especially those from Toys `R' Us. After Chairman Charles Lazarus praised K'NEX at last February's Toy Fair, orders from Kmart and other retailers kicked in. In the toy industry, only one thing counts more: a bunch of kids shouting "I really want it" as they dream up their holiday wish lists.WHAT ELSE IS HOT

FOR CHRISTMAS

TALKING BARNEY

TALKING BARNEY HASBRO A chatty version of the purple dinosaur

MIGHTY MORPHIN POWER

RANGERS BANDAI Action figures from the TV show: Teen heroes

commune with dinosaur spirits and fight aliens

MORTAL KOMBAT ACCLAIM

ENTERTAINMENT A violent, highly realistic video game

BARBIE MATTEL A $123, three-foot-tall My Size Barbie with outfits

that can be shared by little girls

TALKING ALPHABET ALPHIE

HASBRO A laptop-like toy that teaches spelling and diction

DATA: BUSINESS WEEK

Joseph Weber in Philadelphia, with Eric Schine in Los Angeles and Sandra D. Atchison in Denver


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