Joining the ranks of Tickle-Me Elmo, Cabbage Patch Kids, and the Teenage Mutant Ninja Turtles ... behold, the Zhu Zhu Pets. These robotic rodents are expected to be the most in-demand toy for the 2009 holiday shopping season.
The five battery-operated hamsters respond to touch with 40 different sounds, and can also run around when set in "explore" mode. It's all the fun of having a pet without the messy clean-up duty.
Parents, you have Cepia LLC, a small company in St. Louis, to thank for these critters. The firm is hoping to ship between 4 million and 5 million pets by the end of the year (banking $300 million to $400 million in sales), but admits they cannot keep up with the demand. Cepia has grand plans, however, for the next part of the Zhu Zhu universe, hoping to roll out hedgehogs, rabbits, and other furry robot friends in the next year or so.
Wal-Mart Stores Inc. (WMT) began stocking the toys this weekend, but they didn't last long on the shelves. And the CEO of Toys R Us said it chose not to advertise Zhu Zhu Pets in their circulars for fear of disappointing customers who were too late to grab one. The craze is also having a positive effect on eBay (EBAY), which has become a black market for the pets. Some are currently selling for about twice the retail price.
Speaking of the retail price, it's about $7.99 per hamster, with accessories (cars, beds, houses) priced from between $3.99 to $19.99. At least the prices reflect recessionary times. So the affordability factor is there. Now, about that availability factor ...
Beth works for The Options News Network (www.ONN.tv), which provides daily stock and options commentary. The above comments are not intended as trading advice.
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