Rumpus Toys Plays Contrarian, Pulls Products for Web Exclusive
Rumpus Toys is playing with convention. The tiny New York toy maker is pulling its products from some of America’s biggest retail toy sellers just as items such as “Gus Guts” and “Harry Hairball” earned their places on the shelves.
Instead, as many online-only retailers prepare to shut down or partner with traditional bricks-and-mortar stores, the twenty- and thirtysomething gang at Rumpus have decided to sell their toys themselves. Online. And only on their Web site.
Founder Larry Schwarz, 30, says the company’s move is part of a larger plan that includes online movies starring Rumpus characters, as it tries to fashion itself as an entertainment company--”like Disney,” Schwarz explains.
The path to being Disney, however, is paved with the remnants of eager imitators. But Schwarz, his staff of 36 and his backers are betting that the company has a combination of advantages not enjoyed by their forebears: the World Wide Web and a quirky, low-tech sense of what kids want.
“Now that we’re really not focused on dealing with the stores and all that, our productivity, our output, our creativity is really cooking here,” Schwarz said. “We were scared doing it, but my horoscope that day said I was going to shock a lot of people.”
If he can make a go of it, Schwarz might shock people again, because the company’s road map goes in exactly the opposite direction of what other Web companies are doing.
Online-only merchants increasingly are linking up with real-world stores to broaden their reach, such as last year’s cross promotion between Gap Kids and EToys or America Online’s growing presence in consumer electronics stores.
What’s more, while Rumpus is trying to move into entertainment, the biggest entertainment companies increasingly are focusing on their Web presence and corresponding consumer products businesses, already or soon-to-be available online.
While Rumpus was hatching plans to be a new online version of Disney, the Burbank giant was announcing plans to be its own Web content provider, retooling its Go Network from a Web portal site into more of an entertainment site.
“Being a pure play is a very difficult proposition because you have to constantly remind people that you exist,” said David Cooperstein, the director of online retailing for Forrester Research Inc. in Cambridge, Mass. “It’s hard enough to get visibility when you have a brand people know.”
Privately held Rumpus does not disclose financial data, but toy industry experts pegged its 1999 sales at $12 million to $15 million, with no profit so far.
But neither the red ink nor the change in selling plans bothers the company’s initial investors and board of directors, Schwarz said. They include William Lauder, president of Clinique Laboratories and an Estee Lauder Cos. board member, and Kevin Misher, Universal Pictures’ president of production.
“Some were nervous when they first heard what it was, then were very excited after we explained it to them,” Schwarz said. “We’re a content company no matter what happens, so if there’s an ice age, we’ll make Science Freaks Ice Capades.”
Now, with an agent from Creative Artists Agency and star talent such as Brendan Sexton III from “Boys Don’t Cry,” and Jason Priestley from “Beverly Hills 90210,” Rumpus is forging ahead with plans for an Easter release of its first 45-minute animated Web movie.
Downloadable for $3, “Herschel Hopper” will tell the story of a rabbit’s adventures in New York City. The company is planning two more movies for Herschel--as well as, of course, offering the stuffed rabbit itself for $12. And it is planning a separate co-production with Hart Break Films, maker of “Sabrina the Teenage Witch,” for a TV show based on its “Monster in My Closet.”
The team is hoping that a list of more than 50,000 Rumpus kid club members, online affiliates and word-of-mouth will send kids its way. Advertisements on television and in parenting magazines are slated for the latter part of the year, Schwarz said.
“It’s definitely bold,” said Harrison Miller, Amazon.com’s general manager of toys and video games, who said the Rumpus line sold well for Amazon. “They are interested in being a kids’ media and entertainment company, and the move they’re making is a great example of their creativity and willingness to take risks.”
The company said some smaller retailers were disappointed that they had little warning about Rumpus’ decision to halt shipments to stores. Others, such as Miller, said that he wished Rumpus well and hopes to work with the company again in the future.
Rumpus began in Schwarz’s apartment in 1996, shortly after the fledgling toy maker graduated from law school.
The 1997 toy “line”--really just two toys Schwarz designed--took off when Kathy Lee Gifford took a shine to Gus Guts, a plush toy with a big mouth and a bigger stomach. There, Gus houses plush organs including lungs, intestines and kidneys, all of which are accessible by reaching down his throat.
Gross, maybe, but no less 10-year-old-boy appealing than the rest of the products the company would go on to develop, including “Bag of Noise”--it’s just what it sounds like--and “Skwertz,” hand puppets that make noises and spit water.
“These are things we like to play with,” Schwarz said. “We think we understand kids.”
Pretty soon, toy buyers wanted to play with Rumpus toys as well, snatching up both the odd and more mainstream offerings, such as Sally Satchel, a doll that turns inside out into a shoulder bag. By this holiday season, the company expects to have 50 toys, ranging from a few dollars for a book to $25 for the company’s newest line of plush toys. The Gallery Gang mimics characters from seminal paintings, such as Leonardo da Vinci’s Mona Lisa and Cezanne’s Card Player, in plush form.
That doesn’t mean Rumpus has strayed from its, well, more basic roots.
The company also offers “Sy Klops” a $20 item that when squeezed, shoots its sole eyeball across the room, and “Wake Me Willy” a wriggling plush alarm clock that wakes up shouting, “Get up Lazybones,” and “Stop tickling me, I’m not Elmo.” Two-headed, multi-eyed “Science Freaks,” meanwhile, each come with comic-book experiment instructions.
“Some people love it, others don’t get it,” Amazon’s Miller said. “The company has a genuinely positive aspiration for kids, so that their irreverence is not cynical, and that comes through in the toys.”
In the company’s inaugural year, FAO Schwarz agreed to take a few Gus dolls as a test. After Gus’ television appearance, however, the venerable toy store was scrambling for more product in response to customer requests. Rumpus promised its entire stock of Gus Guts--all 24 dolls.
By 1999, Rumpus was selling items to Toys R Us, CVS Pharmacy, Bloomingdale’s and EToys, among others. And when Amazon announced its entry into the toy business, founder Jeff Bezos appeared in media outlets throughout the country adorned by Gus and the Rumpus cat, Harry Hairball (you can guess what comes out when you reach down his throat.)
After reaching those giddy heights, the company is expecting lower sales and revenue for the immediate future.
“We’re building this year,” Schwarz said. “We’re going from being a wholesale company, getting $2-million orders, to getting your individual $25 ‘Wake Me Willy’ order.”
Also on the agenda this year: a new round of financing from private investors, in hopes of raising between $10 million and $40 million. Schwarz said the financial goals are realistic based on the strength of the company’s earliest two rounds of private investors, who Schwarz declined to name.
Schwarz’s mother, a retired teacher, no longer packages the free Rumpus club kits; the company has turned to an outside provider for that and other pack-and-ship duties. Any new cash infusion will go to broadening the company’s newest efforts--hiring more animators, programmers and business development employees.
And if all that sounds a bit uncharted, Schwarz said, that’s fine by him.
“If we had it figured out, then it wouldn’t be fun doing it, see?” Schwarz said. “This is why it’s a good thing we’re not a public company, I can have that attitude.
“We make it up as we go along.”
