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FEATURE-Webkinz short supply spurs expeditions, high prices

NEW YORK, April 2 (Reuters) - For 9-year-old Rachel Freeman, the hunt for the latest Webkinz, a stuffed animal toy that comes alive online, often resembles a treasure hunt.

Freeman said sometimes futile quests by her and her parents to add to her collection of five Webkinz often require multiple scouting expeditions.

“There’s a new one -- a limited edition Dalmatian -- I was trying to find and they said it sold out really fast,” the fourth grader said. “Sometimes it can get a little bit frustrating having to go to a lot of different stores.”

Retailers say demand for Webkinz is skyrocketing at a rate not seen since the Beanie Babies craze of the late 1990s.

“They’re hot. They sell out within 12 hours of coming through the door,” said Donna Schofield, a manager at Stationary Toy World in New York.

“We’re almost sold out, and I just got them in two days ago,” said Karl Wong, the floor manager at Zitomers in New York.

Wong said Ganz, a privately held Toronto-based company that manufactures the toys, is not churning out enough Webkinz to meet demand.

“They trickle in. One week they can send you one or two cases and then one week they send you three. We continue to order in large quantities hoping to get some in,” he said.

A case comes with about 144 toys, Wong said.

HIGH PRICES ON EBAY

Many are attempting to cash in on the limited supply by selling Webkinz, which typically go for $10.99 at specialty retail shops like Hallmark or American Greetings Corp. AM.N, for hundreds of times their normal price on eBay EBAY.O.

“Retired” or discontinued Webkinz generally garner some of the highest asking prices.

The most expensive Webkinz sold on eBay so far is a retired Cheeky Dog Webkinz that sold for $1,799 on March 11, according to eBay.

As of Friday, a seller started the bidding at $3,000 for a retired Cheeky Dog and Cat, while another asked for $2,195 for 23 Sherbet Bunny and 14 Love Puppy Webkinz.

According to Webkinz.com, there are 45 Webkinz and 27 Lil’ Kinz dolls. Each toy comes with a code that owners use to register their virtual pet at the “adoption center” at Webkinz.com.

Children are then responsible for maintaining their pet’s health and can monitor the toy through health and happiness meters.

The success of Webkinz represents the dawn of a new era in the evolution of toys, one in which toy makers will increasingly look to incorporate the Internet into traditional play, said Jim Silver, publisher of Toy Wishes Magazine.

“It is a major focus for many manufacturers and those who aren’t in it are looking to get into it,” Silver said.

In addition to Webkinz, Silver said Mattel Inc. MAT.N is also at the forefront of the movement.

In February, the company introduced Funkeys, collectible figures that can be hooked up to the Internet for children as young as two.

“Toy companies,” said Silver, “realize the Internet is a major component of the future of play.”

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