Wild about Harry

Monday, November 5, 2001

NEW YORK

Harry Potter has yet to make his Hollywood debut, but the bookish boy wizard is already working a little magic for gloomy retailers across the country.

Merchants including Toys R Us and Kmart say they have been pressed to keep up with demand for merchandise tied to "Harry Potter and the Sorcerer's Stone," which hits theaters Nov. 16.

The hot sales of games, puzzles and trading cards are delighting store owners who fear a bleak holiday shopping season because of economic woes and the Sept. 11 attacks.

"It's almost as if a light switch went on," said Jim Silver, publisher of The Toy Book, an industry monthly. "It looks like the product has legs and will be a strong seller for the holidays." The movie, based on the first of author J.K. Rowling's best-selling series, follows the adventures of Harry, an orphan boy who is invited to become a student at the Hogwart's School of Witchcraft and Wizardry.

Warner Bros. officials are betting their film will be a great comfort to children and adults. Analysts, however, say the unsettled economic and political situation could limit the success of Harry Potter products.

Revive licensing industry

"Parents could pull back on spending, including toys," said Chris Byrne, an independent toy consultant.

Still, Harry Potter merchandise is expected to revive the licensing industry, which soured last year with slumping sales of Pokemon and Star Wars merchandise. Under a license, a manufacturer can market toys and other products using a name, logo or image.

Mattel is the biggest supplier of Harry Potter toys, while Hasbro has the master toy license for another highly anticipated film, Disney Pixar's "Monsters Inc." Toy Biz is the main licensee for New Line Cinema's "Lord of the Rings." Mattel expects certain items -- including its Levitating Challenge game and Hogwart's Castle playset -- to sell out by Thanksgiving. Lego Systems has boosted production of Hogwart's Express train and Hogwart's Castle to keep pace with retailer demands.

"This could really help matters, and the sooner it happens, the better it will be," said David Miller, president of the Toy Industry Association, who expects holiday toy sales to be up 2 percent to 4 percent from last year, when sales were unchanged from the 1999 holiday season.

Silver said he believes Harry Potter merchandise could generate sales of several hundred million dollars in one year. Warner Bros. officials declined to comment on projections.

Limiting partners

Mindful of last year's Star Wars licensing overkill, Warner Bros. has limited the number of companies with licenses for the Harry Potter film.

There are fewer than 90 U.S. licensing partners, compared to about 200 for movies like "Batman." Only about several hundred products are being released, compared with more than a thousand that Warner Bros. does for a typical blockbuster, said Dan Romanelli, the company's president of worldwide consumer products.

The studio also decided against Harry Potter promotions in fast-food restaurants.

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