Independent toy retailers thriving

Expertise, service help small stores compete with big chains

A young customer checks out the goodies at New York City’s Mary Arnold Toys, which offers a personal touch for shoppers.
A young customer checks out the goodies at New York City’s Mary Arnold Toys, which offers a personal touch for shoppers.

NEW YORK -- When a young customer returned to Mary Arnold Toys a few days after an Easter-egg decorating event, store owner Judy Ishayik asked the child, "How is your egg?"

The little girl responded with a big smile, and her mother thanked Ishayik, telling her, "That's so special."

Mary Arnold, a nearly 90-year-old store in Manhattan, is thriving along with many other small and independent toy stores -- even as Toys R Us is going out of business and more consumers shop online. These store owners know what they're up against and focus on toys that customers can't find at chains like Target and Walmart, and provide families with events, service, expertise and emotional experiences that Internet retailers can't match.

At Mary Arnold, some customers visit every week. It doesn't take long to tell which toys a child will like.

"I know your kid, so if you need a birthday present, I can help you find something in a particular theme or something new," Ishayik said.

Many independent toy retailers carry international and niche brands -- items a shopper isn't likely to find on the shelf of a big discount chain, or at the Toys R Us stores now closing. Small stores are less likely to carry big brands like Barbie and Hot Wheels, or movie-related action figures. At Mary Arnold, the offerings include German brands Bruder, a line of trucks, and Haba, preschool toys, and Tegu blocks, made in Honduras.

The independents may pick up some sales from former Toys R Us shoppers, but they're not likely to see a windfall -- partly because the small stores don't tend to carry the big brands.

"I don't necessarily think that people who are shopping for toys at big-box stores are looking to shop at stores like ours," said Scott Friedland, owner of Timeless Toys in Chicago.

Some of the brands the independents showcase are sold online, but store owners say they aren't fazed by the competition even though nearly 14 percent of toy sales were made online in 2016. That's more than twice the sales of five years ago, according to the research company GlobalData Retail. Independent owners say those sales aren't usually items that overlap with what they sell.

The number of very small toy stores in the U.S., those with fewer than 20 employees, dropped 4 percent to about 4,300 from 2012 to 2015, according to the most recent Census Bureau figures. Meanwhile, the number of department stores also fell almost 4 percent to 7,885. As part of its liquidation, Toys R Us plans to close more than 700 stores.

Whitney and Joe Novak opened Kazoo in Atlanta five years ago, knowing that Amazon and other online retailers would be among their biggest rivals. They recognized the need for unique merchandise, because as they were starting their family they couldn't find the kind of toys they wanted, Whitney Novak said.

"We were wondering, where are the local toy stores? Where are we going to find something for our new baby to play with?" she said.

The variety of lesser-known brands at independent stores is part of their appeal, said Richard Gottlieb, owner of Global Toy Experts, a consulting group. Parents, grandparents and other shoppers spy a doll, game or construction set they've never seen before, and buy it.

"In a great retail store, there's the excitement of stumbling on something," Gottlieb said. "If you have a really fascinating selection of merchandise that changes frequently, I'm going to go there."

There's also the wow factor; stores are jammed with toys and games, many of which are in smaller displays than in a typical Toys R Us or discount store. Many owners allow children to take them out of the boxes and try them out.

"When kids walk into a toy store it should be a magical place," said Jim Silver, chief executive officer of TTPM, a toy industry review website.

Independent stores can also thrive because employees do more than point parents to a section of the store. Silver said parents with questions -- how does a toy work, is it right for a particular child's age and interest -- may be more likely to get answers in a smaller store.

"In a big-box store, I had to chase salespeople down and sometimes they don't know the difference between one toy and another," said Heath Fradkoff, who shops for his son at two independent stores in Brooklyn, N.Y. "In a smaller store, sales people show you the different features in a toy and explain why some people buy it over others."

Employees at some independent stores have taught preschool or elementary school. They understand childhood development, how children play and the types of toys that are appropriate for different ages and interests, Friedland said.

"It's important for us to have those conversations with parents. It's not what the most popular toy is, it's the toy that's right for the child you're shopping for," he said.

When small-store owners hire, they are looking for people who love children and can be patient with them and their parents. Being able to answer parents' questions is "a full-time job for all of us," said Carol Staley, owner of Tomfoolery Toys in Houston.

Sometimes parents are looking for Barbie or Star Wars toy. Mary Arnold carries some national brands including Barbie because customers want them, but many independent stores don't. Staley said that if a customer wants a name brand she doesn't offer, she recommends a nearby Target and doesn't worry about losing a sale.

"If I don't have it, I'm doing a service by helping them find it," she said.

Toy stores have a critical advantage in another area -- the last-minute rush. Gifts for birthday parties are a big part of the business, with parents often coming in on their way to a party, needing to find a present quickly and have it wrapped.

"Saturday morning from 10 to 12:30 is the busiest time of the week," Novak said. "Online isn't going to help when it's the morning of the party and you didn't get anything yet."

Business on 03/22/2018

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