Worlds of Wonder Goes on on Block, Trims Toy Prices

Financially troubled Worlds of Wonder put itself up for sale Monday after disclosing a $43-million loss in its second quarter, despite the continued popularity of its Teddy Ruxpin talking bear.

The 2-year-old Fremont, Calif., toy company, apparently desperate for cash, said it is slashing prices on its electronic toys to boost Christmas sales. The company added that it was lowering prices on its Teddy Ruxpin, along with Lazer Tag, its Pamela talking doll and its Action Max video game.

The loss and massive price discounting comes just two weeks after the company laid off 60 employees, including its chief financial officer and its engineering vice president. It earned $4.1 million in the year-ago period.

It was not clear whether other toy companies would also lower prices to compete for sales in what is widely anticipated to be a slow Christmas season. But a quick survey among retailers showed that prices on some Worlds of Wonder toys had been reduced because of slow sales before Monday’s announcement. In one case, Lazer Tag was being sold for $20 below last year’s price. One retailer said his distributor offered to sell him Teddy Ruxpin bears, normally $70, for $30 each.

Also unclear was whether Worlds of Wonder, often criticized by small and medium-size toy retailers for slow deliveries, would be able to deliver many of the lower-priced toys in time for Christmas. The firm did not respond to a request for comment Monday.

Barry Rothberg, a toy analyst with the Mabon, Nugent investment firm in New York, said there are no clear buyers for Worlds of Wonder. He said the company had an $80-million debt outstanding.