Party On

EToys Inc. said that it will add party goods and hobby items to its Web site this year to increase sales. The Internet toy retailer, whose shares have dropped 92% from their high, also said its advertising expenses will decrease significantly as a percentage of sales this year.

In the year ended March 31, EToys spent $56 million on advertising, or 37% of sales. The company said it will offer the new product categories before the holiday sales season. EToys generated $107 million, or about 71% of its annual sales, in its fiscal third quarter ended Dec. 31. The retailer also sells books, software, music, videos, video games and baby goods.

EToys, which has lost more than $220 million since starting operations in late 1997, is trying to attract more customers as part of a plan to break even in its U.S. business in 2002. The company’s stock has tumbled from a high of $84.25 in October, as investors turned away from money-losing Internet retailers. Shares of Santa Monica-based EToys fell 84 cents to close at $7.09 on Nasdaq.