A Real Toy Story From wild-haired troll dolls to nostalgic teddy bears, Russ Berrie has the gift market all wrapped up.

Russ Berrie is still swinging. That's how he knows he'ssuccessful--not because his Oakland, New Jersey, gift and noveltyfirm, Russ Berrie and Co. Inc., posts more than$375 million inannual sales. And not because he's masterminded some of thebest-selling gift items in popular memory, ranging from that littleplastic statuette from the '60s who, with his armsoutstretched, proclaimed "I love you this much!" to, morerecently, the troll doll, which enjoyed a formidable comeback inthe early '90s. With its top-rated line of baby gifts andaccessories, its nostalgic "Bears From the Past" teddybear series, and a menagerie of other familiar gift items, RussBerrie and Co. enjoys more than its share of major hits.

Berrie, 64, is understandably pleased with theseaccomplishments. But it's the longevity of his 34-year-oldcompany that pleases him most. "There are not many companiesaround today that were here in 1963," Berrie says. "Inthis business, things are always changing, but we're stillaround. And it's been fun every step of the way," eventhough it hasn't always been easy.

In a consumer environment where entertainment tie-ins andmammoth advertising campaigns seem to dominate, Russ Berrie and Co.rides trends the old-fashioned way--by tracking customer interestsand responding to them. It is not an exact science. "I'mnot going to say to you that every product we've made has donewell," Berrie admits. "But batting average is really notthe question. It's making sure you get the right hits at theright time and, of course, whether or not you win thegame."

The Early Days

Above all else, Berrie seems to love the entrepreneurial game.His career began at age 10. A middle-class kid from the Bronx,Berrie loved baseball--and found a way to profit from it."I'd go to Yankee Stadium after the games and pick updiscarded score cards," Berrie explains. "I'd cleanthem up [by erasing the pencil marks and smoothing the wrinkles]and take them back the next day and sell them for 10cents."

Humble beginnings, yes, but he was profitable at it. In fact,jokes Berrie, "I've been trying to match that gross profitmargin ever since."

At 11, he developed his own newspaper delivery route,distributing his papers from a borrowed baby carriage. He did oddjobs, worked as a delivery boy, and was even an amateur bookie fora brief time. After high school, he attended college and did astint in the military. But he never had the patience to finish hisdegree. "I was eager to make an honest man of myself,"Berrie says.

His first job after college, at age 23, was selling toys for anow-defunct Chicago toy company. Here, Berrie found his calling.Within a year, he branched out to become a manufacturer'srepresentative, working for five toy and novelty firms on straightcommission.

The entrepreneurial structure of being a manufacturer's repsuited Berrie, but in the end, it wasn't entrepreneurialenough. "I would bring [the manufacturers] certain suggestionsas to products I thought would sell, and I was frustrated that theydidn't really show an interest," he says. "By 1963,I'd been doing this for about seven years. I had experience,and I knew people who could make products for me. So I continued towork as a manufacturer's rep, but I also invested $500 in someproducts and rented a converted garage." Russ Berrie and Co.was born.

Berrie's first products were primarily basic toys andimpulse gift items such as wind-up gadgets and Indian dolls hepurchased from various manufacturers.

Early sales didn't require much extra effort. "I wouldsee my customers and sell them the lines I was representing. ThenI'd take out the half-dozen or so different items I had [in myline]," Berrie recalls. With a local teenager's help,Berrie would pack orders and type invoices in the evenings. Ordersmay have only averaged between $70 and $100, but they added up:Between August and December 1963, Berrie generated a healthy$60,000 worth of sales.

Get The Message

Over the next two years, sales mushroomed to $250,000 in 1964and $750,000 in 1965. By then, Berrie was ready to give up his repjob and become a full-time enterprise, moving out of the garage andinto a tiny bedroom office in his apartment. He had a part-timesecretary, a bookkeeper, a handful of independent reps and a stableof products with potential.

Like what? Berrie's goods were largely novelties sportingcute messages. "We developed a product called Fuzzy Wuzzies.They were little sheepskin characters on a wooden base, and theysaid `Happy Birthday' or `I Love You,' or [a variety ofother messages]," Berrie recalls. "We also did Loving Cuptrophies that said `World's Greatest Lover' and`World's Greatest Wife,' and so on."

Message novelties proved to be a lucrative niche in thenot-yet-liberated '60s. "They were like three-dimensionalgreeting cards," says Berrie. "Only these were items youwould keep." In an era when self-expression was fairlysubdued, sweet little novelties that could convey love orappreciation were real commodities.

As times changed, so did Berrie's messages. Althoughbirthday greetings and messages of love never went out of style, by1968 Americans were ready for something a little bolder. RussBerrie and Co. introduced Sillisculpts, plastic message figurineswith a little more attitude. Two of the most memorable are the"I love you this much!" statuette and another of an oldbarrister crying "Sue the bastards!" "I think everylawyer in America had one," Berrie laughs.

During the company's formative years, messages, styles andproduct lines came and went. But the basic formula for success thatBerrie originally devised continued strong. He remained active indeveloping and acquiring gift products with wide-ranging appeal.And he didn't venture into extraneous areas likemanufacturing.

"I like to say that manufacturers should manufacture,accountants should account, and salespeople should sell," saysBerrie. "We're a sales and marketing organization;we're a product- design organization. That's what we dobest." By outsourcing its manufacturing operations, RussBerrie and Co. has kept itself nimble--a vital attribute in thetrend-dominated world of gifts.

Growing Organized

Managing the ebb and flow of product popularity has been key toRuss Berrie's success. But so has managing growth. If the'60s and early '70s were Russ Berrie's era ofestablishment, the mid-'70s and '80s were the era ofexpansion. Realizing that a global approach was critical to futuresuccess, Berrie set up offices in Korea, Taiwan and Hong Kong in1977 to help the company's product development efforts andestablish good relationships with Far East manufacturers. RussBerrie and Co. U.K. followed in 1979.

Domestically, Russ Berrie added regional distribution centersacross the country and set up warehouses in New Jersey andCalifornia. The company's in-house sales force, which beganwith Berrie and one full-time salesperson in 1968, numbered 600worldwide in 1985--one year after Berrie took the company public onthe New York Stock Exchange.

With growth came wholesale changes for Berrie. The man who oncepacked his own boxes and typed his own invoices found himselfheading a company with hundreds of employees and hundreds ofmillions of dollars in sales. "I've had to go from being adoer to being a manager and a leader," says Berrie. And thoughhe says his greatest joy now is seeing his employees excel beyondhis own abilities, Berrie admits that reaching this plateau hasbeen a challenge.

"When I was younger, I had a different ego," saysBerrie. "I had to prove myself to myself. But as you getolder, the ego starts to find its own place. I'm certainlydealing better with people today than I did 34 years ago."

Talk Shows

Berrie considers the ability to read people his key businessskill--whether that means motivating his employees, negotiatingwith suppliers, or zeroing in on the needs of the marketplace.Indeed, nothing could be more critical to the company's successthan its CEO's ability to predict, gauge and follow consumerdemand.

From the beginning, Berrie understood the value of trackingcustomer response. "For instance, early on we became awarethat certain messages would sell really well," he says."Anything that said `I love you this much!' would sell.`Happy Birthday' or `Get Well Soon' were other goodsellers. So whenever we created new [message] products, we'duse these basic messages. In essence, we watched the marketplace,watched what customers were buying, watched our own product line,and expanded on what was selling."

The same principle applies today--only the company's productline is now so vast that the process is nearly scientific. Whenyour company sells 7,000 products in more than 50,000 retailoutlets, your internal sales figures alone can give you a prettyaccurate read of market trends.

Still, Berrie relies on old-fashioned fact gathering. "Oneof the most important things an entrepreneur can do is get out andtalk to customers--speak to people so you can understand what'sgoing on in the marketplace," he says. "To this day, I goto all the trade shows to really [tap into] the pulse of thepublic. It's the only way to know the direction they'regoing."

Berrie says that experience has grounded him. He's witnessedthe coming and going of so many trends that it's harder now tosurprise him. This doesn't mean he's catatonic, though.Berrie is still capable of being amused, beguiled and carried away.Or at least he was in the early '90s, when a stumpy characterwith a gentle smile and the scariest hair ever stepped up to theplate--and hit the ball out of the park.

A Troll Tale

Back in Berrie's manufacturing rep days, one of thecompanies he represented made impish little plastic dolls calledtrolls. They met with moderate success, but they weren'tsuccessful enough to keep their manufacturer from going out ofbusiness in the mid-'60s.

That should have been the end, but Berrie had a soft spot forthe little creatures. "I tried bringing them back in 1967 withvery minor success," Berrie says. "Then, every five, six,seven years, I'd try bringing them back again. Finally, in1989, the trolls showed some pretty good sell-through, so weexpanded the sales force in 1990. By the time 1992 rolled around,we were doing $250 million just in trolls."

This was not bad for a character with no motion picture deal, nogiant ad campaign and, frankly, not much in the way of conventionalgood looks. Troll mania seized the country, and Russ Berrie had amajor stake in the action. There were big trolls and small ones,crawling troll babies, trolls in cars and troll mugs.

"It became phenomenal," says Berrie. "I could nothave predicted what happened. All I did was recognize the demandand expand to meet it."

And what demand! Veteran that he was, even Berrie was thrilledto see his fortunes rise higher and brighter than a troll'scoiffure. "We just got carried away," he admits. "Wewere not really watching the marketplace."

Then the inevitable happened. "On April 12, 1993, at 1:32p.m., everyone in the world decided they didn't want any moretrolls," Berrie laments. "The bottom just fellout."

Back To Basics

Between 1992 and 1993, sales at Russ Berrie and Co. dropped morethan $165 million--from $444 million to $279 million. And itwasn't just lost sales that hurt: The company had also lostmomentum.

Berrie was understandably disappointed with the course ofevents, but he wasn't defeated. This is where experiencehelped. For one thing, even in the headiest moments of troll fever,Berrie had expanded the company conservatively. "We added anumber of salespeople and a few people in shipping andadministration, but we had been able to control growth withoutoverburdening the company," Berrie says. "Again, the factthat we don't own any factories helped."

Furthermore, Berrie had been through enough product cycles inhis career to know that the next necessary step was development."We simply started changing the line," he says. "Wesaw a trend in home décor accessories [and jumped on it]. Wedeveloped our line of `Bears From the Past.' They'restuffed bears that have a nostalgic look. We expanded our babyline. We expanded our holiday offerings. We made more themedproducts. We came out with new products toward the end of 1994, andby 1995 we had a good year," with sales of more than $348million.

What did Berrie learn from the troll episode? Certainly, thatmeteoric spikes in sales aren't all bad: Both revenues andprofits hit record levels in 1992. But knowing the fundamentals ofyour business and having the good sense to return to them in timesof crisis is the surest recipe for longevity.

"It isn't that complicated," says Berrie."You need to be able to take the risk, to take your best shot.You run with the winners and bail out on the losers."

He's Got The Gift

Thirty-four years ago, Russ Berrie put together a littlecollection of products and took it to stores to see what mightsell. He kept the winners, ditched the losers, and then heregrouped. Thirty-four years and billions of dollars later,he's still at it.

The players have changed, of course. Even today, Berrie'straditional base of greeting card stores, florists, gift shops andpharmacies is expanding to include home décor shops,department stores, craft shops and garden stores. The company'smix of products is in constant flux. Employees come and go.Opportunities arise, run their course, and give way to newopportunities.

But Berrie just keeps swinging. Though he tries to spend as muchtime as possible with his six children and his wife, Angelica, heusually works seven days a week. "I take time off on Sundaysto watch the Giants lose," he says. But work is his majorsource of fun. And Berrie wants to keep playing.

"I hope when I'm 92 years old, I'll be on the floorof the Jacob Javits Convention Center doing a trade show andwriting orders for customers," Berrie says. As long asthere's a market, Russ Berrie will have the gift.

Russ Berrie

BIRTH DATE:March 18, 1933

FAMILY:Married to Angelica, 42; six children: Brett,38; Richard, 35; Leslie, 34; Scott, 31; Nicole, 15; and David,11

RESIDENCE:Englewood, New Jersey

BUSINESS PHILOSOPHY:"Running a business is notjust products and pricing; it's the whole gamut of humanexperience. You have to motivate people all the time, and you haveto understand what their needs are, whether they be customers oremployees or suppliers."

Toying With Success

Russ Berrie and Co.'s annual sales:

1996 - $377 million

1995 - $348.5 million

1994 - $278.1 million

1993 - $279.1 million

1992 - $444.4 million

1991 - $267.9 million

1990 - $250.6 million

1985 - $204.7 million

1984 - $162.4 million

1983 - $112.7 million

1982 - $71.4 million

1981 - $54.5 million

1965 - $750,000

1964 - $250,000

1963 - $60,000

Contact Sources

Russ Berrie and Co. Inc., 111 Bauer Dr., Oakland, NJ07436.