Toy Quest Enjoys Boom in Electric Mini-Motorcycle Sales

The electric bikes get the firm back on the map with retailers, even as safety concerns prompt bans.

Published: 01-Apr-2005

class=content>In the last year in many cities, miniature electric motorcycles have been banned and confiscated and their half-pint owners ticketed.

But all of this has done little to stop the joy ride of the firm that makes Minimoto bikes, privately held West Los Angeles-based Toy Quest.

Sales of its bikes and other electric vehicles are expected to exceed $200 million in 2005, even as negative headlines appear in newspapers around the country.

As luck would have it, at least for Toy Quest, the bad press "just exposes the product" and helps make it more popular than ever, said the company's president, Brian Dubinsky.

"It's what everyone's talking about," he said, and so it's "what kids want."

Hundreds of accidents around the country involving so-called pocket bikes — with at least one death last year in New York — have brought about bans in cities such as Philadelphia and Providence, R.I. In an article last October, Consumer Reports called pocket bikes in general a "bad bet" with hard-to-handle steering and unreliable braking.

Dubinsky said he knew of no accidents involving Toy Quest products, which are packaged with warnings to keep them off streets, where they're illegal.

There are more such vehicles on the way. This year, he expects Toy Quest's total sales to hit $500 million, as several ride-on products — all designed to fit in the back of a minivan or SUV — are introduced, including a dirt bike, a dune buggy, a hybrid bike, an all-terrain vehicle and a miniature Vespa-type scooter. A kid-sized Jet Ski will come out in 2006.

Retailers and consumers, it seems, are still wild about the $200 to $400 vehicles, even if some advocacy groups and law enforcement officers aren't.

"It was really hot last year," said Gerard Prince, a buyer for Denver-based E-Toys Direct Inc., which handles orders for KB Toys Inc., Hammacher Schlemmer & Co. and the Sears Wish Book. "We sold out." This year, he said, E-Toys is planning on carrying many more of the popular items.

Moreover, Toy Quest has accomplished something that few other toy companies have done in recent years, which is to get older boys out of electronics stores and back into toy aisles, retailers say.

"We really looked at that audience and said what besides video games would they gravitate to," Dubinsky said. Many in his office, he said, recalled riding dirt bikes as a kid.

"Our idea was to come up with a line of vehicles that if an 8- or 10-year-old were to ride it, they would feel the performance was there," Dubinsky said. That meant, he said, making the bikes feel more like something Dad would own, and less like a plastic toy.

Although they don't run on gasoline like larger motorcycles, the all-electric Minimotos have bumper-to-bumper warranties, pneumatic tires, disc brakes, even a vehicle identification number and title.

"It's pride of ownership," Dubinsky said. "It's their first real vehicle before they buy a car."

Toy Quest got its start in early 1997, when Dubinsky, then 28 years old, left toy maker MGA Entertainment, best known for its Bratz fashion dolls, to partner with Hong Kong trading company owner Samson Chan to start Manley Toy Quest.

Chan made his money sourcing manufacturing for U.S. toy makers in exchange for commissions. Seeing how profitable the toy business was, he wanted a larger share. Dubinsky, former director of marketing for MGA, knew how to sell toys and wanted to break out on his own.

Toy Quest started out selling electronic hand-held games to discount chains and toy retailers such as Toys R Us Inc. In 2001, the company got its big break with its Tekno the Robotic Dog, an electronic pet that wound up on hot toy lists, television shows and the cover of Time magazine. Seven million Teknos were sold, turning Toy Quest from a $40-million company into a $200-million company in the space of a few months.

In the years after Tekno, Toy Quest struggled to find the next hot item. It had some success with gory action figures Stretch Screamers in 2003, a talking doll with a hidden camera called Cindy Smart and a line of backyard water-park-style toys called Aqua Blast.

But it was the launch of its Minimoto Sport Racer bike in January 2004 that really put the firm, now known as Toy Quest, back on the map with retailers such as Wal-Mart Stores Inc. and Toys R Us. It also landed the firm in non-traditional toy stores such as Pep Boys, Kragen Auto Parts and Sports Authority.

Since then, the company has introduced the Maxii 400, a larger bike that sells for $299 and can reach top speeds of 18 mph, and a $399 Go Kart, which sold out at Toys R Us last holiday season.

Although there are no reliable figures about sales of these miniature vehicles, retailers say Toy Quest is the largest manufacturer, outselling rival Razor USA. This year, Dubinsky said, the Minimoto line will account for half of Toy Quest's sales.

Minimoto bikes are designed and made in China, assembled at a dozen different plants, before being slapped with Honda Motor Co. or other licensed brand stickers and shipped to the U.S.

Kids say they like them because they feel fast and remind them of their older brothers' or fathers' bikes. Parents say they want to give their kids the experience of motorcycle riding without the price tag and greater risk.

"I think they are the perfect pocket bikes for the young kids to start off on," said Steve Wolford, a Stockton parent of four boys who bought a $199 Sport Racer for his 5-year-old after seeing it in a Toys R Us circular.

"He loves it and as a father I feel that it goes at a pretty safe speed for him," said Wolford, who says his son uses it on a racetrack near their home.

Many law enforcement officers view the minibikes as hazardous at most any speed. In Los Angeles, City Councilman Dennis P. Zine is pressing the council to require retailers to inform customers that the vehicles aren't street-legal.

"They are totally unsafe. Motorists can't see the rider," said Zine, who believes many parents don't know the vehicles aren't supposed to be used on streets.

Despite the warnings to keep the bikes off-road, Dubinsky said he recognized that customers misused them. The warnings are "all over the packaging, the product, the instruction manual and the advertising," he said. In TV advertisements, "we never show it on a street, we always show it in the dirt or a parking lot."

Safety concerns haven't deterred retailers from stocking them. With such high price tags, they are one of the more lucrative items that many of these retailers carry. And many count the expensive toys among their top sellers.

"It's a good business for us, with a good margin," said Prince of E-Toys Direct.

Toy Quest is hedging its bets. The company is introducing an active video game system, which was shown to retailers at a recent American International Toy Fair in New York. The system, called Go-Go TV, uses a camera to put kids on television, jumping, swatting and moving to catch balloons, hit balls and play games with images and characters on the screen.

For now, though, Toy Quest's ride-on toys will dominate its revenue stream.

"They are going to be big sellers this year," said Jim Silver, publisher of industry magazines Toy Wishes and Toy Book. "They are still very hot."

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