NUREMBERG, Germany (Reuters Life!) - German toymaker Steiff, whose teddy bears have delighted children for more than a century, now wants to appeal to tiny tykes with a range of jewelry, fashionable outfits and accessories for children.
With a designer collection of stuffed toys dressed in cashmere and merino wool jumpers for between 50 to 120 euros ($64.55-$154.9) each -- about three to four times Steiff's ordinary prices -- the company aims to move up market.
Bags for kids, mohair teddy bear pendants draped with Swarovski crystals and a special teddy bear edition commemorating the 100th anniversary of the death of Steiff founder Margarete Steiff are to hit the shelves later this year.
"If you asked me where I see Steiff in five to ten years, I'd say I see our own stores with beautiful products for kids," Chief Executive Martin Frechen told Reuters on the sidelines of the world's largest toy fair in the German city of Nuremberg.
Since taking the helm at the 129-year old company two and a half years ago, Frechen has been sharpening Steiff's profile, transforming it into a children's lifestyle company from a manufacturer of collectible teddy bears by giving it a new logo, a common store theme and by bringing in fashion designers.
In October last year for example, Steiff launched the limited edition of the Karl Lagerfeld teddy bear, dressed in an outfit sketched out by the designer himself. The bear, with a price tag of 1,000 euros, sold like hotcakes, Steiff said.
But as the economic downturn filters through to family homes, it becomes even more important to stand out, Frechen said.
"The undistinguishable will struggle in times of a crisis. The exceptional will always be in demand," Frechen said.
The toy industry has so far resisted the economic downtrend as families turn to board games and other toys for entertainment at home, industry experts said. But Steiff has felt the pinch.
The company, whose trademark is a gold-plated button as an ear tag, recorded weaker U.S. sales last year and overall sold slightly less during the Christmas shopping season.
It was time to focus on core strength, Frechen said. "Steiff stands for prestige, quality and tradition. We've been to China, we've cut prices. But now, we will follow our own values."
Chasing lower costs, Steiff outsourced around a fifth of its production to China in 2003, but decided to bring it back because of concerns about quality and staff turnover.
By the end of the year, Steiff's production should be back at its sites in Germany and Portugal, Frechen said.
Editing by Paul Casciato