Zhu Zhu Pets: Hamsters to Save Christmas?

Nov. 20, 2009— -- "Zhu Zhu Pets are everywhere!" -- or so goes their catchy jingle. Come Christmas morning, retailers across the country hope that will be true.

Zhu Zhu Pets, the cuddly, on-the-go hamsters who squeak, roll, even drive their own cars, are on their way to becoming the holiday season's "must-have" toy.

Retailers like Ken Levinsohn, owner of the Learning Express toy store in Scarsdale, N.Y., hope they'll be the hamsters that save Christmas.

"Based on the demand, it's going to be hot," Levinsohn said.

The trouble is for Levinsohn is that he has none to sell. Following in the footsteps of must-haves of seasons past -- the Furby, Tickle-me Elmo, Cabbage Patch dolls, Beanie Babies -- supply seems to grow short just when demand is high, and Zhu Zhu Pets are flying off store shelves.

"It's easier to get a swine flu shot than to get Zhu Zhu Pets," said customer Julie Gerstenblatt.

Levinsohn said he has been waiting for another shipment for nearly two months. "Clearly, the demand is there. The product is not. It's very frustrating," he said.

But it isn't just small independents like Levinsohn who are having trouble getting hold of Zhu Zhu Pets. Even the biggest retailers say they can't get enough.

Selling Out in Hours

At the Toys "R" Us in New York City's Times Square, salespeople don't bother putting Zhu Zhu Pets on the shelves. Every shipment has sold out in a matter of hours.

One salesperson told us that even the accessories, which are sold separately from the coveted pets, were running low. At one store, shopper Theresa Brdaric scored the last Zhu Zhu Pet car.

"The cars are going for quite a bit on Ebay. The cars and the ball are the biggest sellers on Ebay, I think. I'm just happy to get some," she said.

On Ebay, the $9 hamsters are being auctioned for up to $60 a piece.

Retailers Look to Fad Toy to Lure Shoppers

Chris Byrne, known in industry circles as the "toy guy," has seen many fads come and go, but still can't say why lightning strikes any particular toy.

"At the end of the day, you can't predict a fad. Some people will tell you you can but it's not possible. When something really catches the imagination,then you've got people who wouldn't normally buy these toys looking for them," Byrne said.

"I think with the Zhu Zhu Pets -- everybody's been talking technology, cell phones, iPods. This is sort of, even though its great technology, it's the antithesis of that because it's really fun, and creative and it's a classic play pattern," he said.

Last Christmas, with the economy in turmoil, retailers suffered badly. But Zhu Zhu Pets are miraculously bringing people back into toy stores.

"You know, it may be the hamster that saved Christmas because it's a rising tide lifts all boats. It's got people coming to the stores. They're looking to find these. But then they're looking around at other things," Byrne said.

Where Zhu Zhu Pets Are Born

"Nightline" visited the Zhu Zhu headquarters near St. Louis, where the pets' creator, Russ Hornsby, introduced us to his top-selling line of characters. They have names like "Mr. Squiggles," "Chunk," "Num Num," and "Pipsqueak."

Hornsby said they didn't make many of the robotic hamsters at first, because he didn't know if they would catch on.

The response has been "phenomenal ...unbelievable," he said. "I've never seen anything like this in my entire life and probably will never see anything like it again in my life."

Hornsby credits Zhu Zhu Pets' popularity to fair price, novelty and the "nag factor" -- children whining for their parents to get them. The products retail for about $9.

"Whenyou have an item under $10 today, the consumer is going to rally towards it. That's provided that in fact kids are excited about it," he said. "And the excitement is, 'Hey mom, did you see the hamster that just drove across that TV set? I want one, Mom.' That's the 'Hey mom, I want it, please!'"

Hornsby has gambled before and lost. He was the brains behind the "Powerpuff Girls" and "Rumble Robots," but eventually, like most fad toys, they disappeared.

Kids Going Ga-Ga for Zhu Zhu Pets

At the company's height, Hornsby said he had a staff of 600 and annual sales of $250 million. Then it was gone.

"It was actually probably within a few days it was gone. Lights were turned out. Boom," he said.

Now, he and daughters Natalie and Ashley are back with Zhu Zhu pets. His firm, Cepia, is smaller and leaner, with only 15 staff employees this time around. They handle everything from design to marketing to creative development and are currently producing 220,000 Zhu Zhu pets a day.

To test Zhu Zhu Pets' popularity, we gathered a panel of "experts" at the Elegant Child preschool outside St. Louis. (In the interest of full disclosure, they included Vicki's niece Sienna and cousins Jaden, 7, and Blake, 10).

"I like the speed and the, the ball thing. The thing they ride in. They push it and it rolls," young Jaden Fields said.

Another kid said, "I want one for Christmas."

When asked if they would rather have a real hamster or a Zhu Zhu Pet, many kids said Zhu Zhu Pets.

"Because you can turn it on and off, and you can't turn a hamster on and off," said nine-year-old Sam Wolfe.

On Tuesday, toy store owner Ken Levinsohn finally received his shipment of Zhu Zhu Pets. It was only a third of what he had expected.

"Most likely they'll be gone by the end of the day," he said.

Levinsohn e-mailed anxious customers who had been on his waiting list. He sold out of his allotment in only an hour and a half.

Zhu Zhu Pets' creators say they'll have four to five million in stores by Christmas.