LeapFrog Sales Plunged 24% in Q4 as Parents Curtailed Toy Purchases
LeapFrog Enterprises has been one of the hottest toy companies with its edutainment products for children. The recession caught LeapFrog by surprise and toy sales plunged 24% in the last quarter of 2008. The company is also stock with left-over inventory. LeapFrog CEO Jeff Katz told Reuters that a theory that the toy sector had resistance during downturns did not hold up last holiday season.
"That was really a miscall that we didn't appreciate," Katz said, adding that the company should have recognized early on, close to October, that consumers would only buy items that were heavily discounted.
Katz said the extremely frugal nature of shoppers had blown a hole through the theory that parents will hesitate to cut back on toys for children, and that the toy sector was resilient to economic downturns such as the current one.
"The great wisdom of the toy industry has certainly failed me this year," said Katz
The LeapFrog CEO said parents were starting to recycle toys by handing down toys from older kids to younger ones.
LeapFrog Enterprises has been one of the hottest toy companies with its edutainment products for children. The recession caught LeapFrog by surprise and toy sales 
