Designer toy shop adjusts to changing market

By Jiefei Liu

“Things come in and out of style,” said Whitney Kerr, president of Rotofugi Inc., a designer toy shop in Lincoln Park.

The store features imported artsy toys from around the globe, ranging from $500 vinyl toys by Otto Bjornik to $4 Pokemon figure strap capsules. A gallery space is now occupied by a pop-up shop of Yummy World by Kidrobot, an art toy retailer.

It will have been 13 years this summer since Whitney Kerr and her husband Kirby Kerr opened the store, and will be the ninth year since they have struggled to recover from the 2008 financial crisis.

The revenue of the shop steadied around $1 million, but costs have gone up, Whitney Kerr said. Gross margin went down to 38 percent in 2016, compared with 44 percent in 2015, she added.

The Kerrs started the store as a super collectors’ business where these collectors would spend several hundred dollars on collectables, such as limited toys by various artists from California, New York or Hong Kong, Kerr said, but there are fewer and fewer of them.

There’s an upside of the business though, Kerr said, it’s less stressful. They used to receive hate emails from people who couldn’t get a certain limited toy or had to pay higher fees to prevent their website from crashing due to traffic overload, Kerr paused, “but I miss it.”

“Their stuff is cute and you cannot get them anywhere else,” said Sarah Labarbera, who has been to the store several times. “However, it’s a little expensive although this is natural since it’s imported.”

Maybe people find their collections are full or maybe collecting is out of date, Kerr said, but she is not sure.

“Have you heard of a book called the Magic of Tidying up?” she asks. It talks about how to tidy things up and live without unnecessary items, she said, so probably it’s good that people don’t buy too much.

Producing designer toys isn’t a good business for factories, Kerr said, because those toys are usually produced in limited numbers, while factories want large orders.

The store augments revenue by renting out its gallery space for parties and events, but that results in a dilemma. Kerr said they were hesitant to schedule events, though they produce revenue, because she feels the store has a mission to “help artists promote what they do and cultivate people to patron art”. “You don’t want people to come in on Saturday for the art and see there’s still a birthday party going all day,” she explained.

Kerr said they had shifted their focus and fashioned the store more like a gift shop, catering more to the general public, and planning to rent the gallery space out not only for birthday parties, but classes and pop-up shops, like the Yummy World shop there last week.

“We come especially for Yummy World,” said Amanda Cyrkiel, who came with her husband and child, “my son loves it.” Coming to the store is a personal experience and supporting the local business, Cyrkiel said.

Nancy Brehm, a travelling grandma, said she walked into the store hoping to find inexpensive souvenirs for her grandchildren and ended up buying four $2 stick markers, a fancy cinnamon gum and a bar of “luxury” soap.

As to increasing expenses, it’s probably her child, Kerr said. Before having a child, they could work 80 hours a week, she said, but once you have one, you have to cut working hours and hire more people to help. The store has two full time employees and two part-time workers.

“The in-store sales are as awesome as always, but the online business…am I bad at Google Ad words?” Kerr said. “I think we should run the store on service.”

“My son loves the toys and I’d like to see everything in person,” said Carolos Argueta, who came with his 6-year-old son holding a Despicable Me bobblehead.

Another reason why the business is struggling, said Kerr, is that neither she nor her husband have a business background. “I have a degree in chemistry and my husband has one in design.”

Kerr said she is excited about all the changes they are going to make, trying to have both the art gallery and birthday parties, to rearrange the place and to set up a salon style gallery, having flat art and exhibiting showpieces on the wall from top to bottom. However, as to prospects, she said, “ask me in a year. Maybe I will quit.”

Photo at top: Cashier counter at Rotofugi. (Jiefei Liu/MEDILL)
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