PRESS RELEASE

CONTACT: Pam Danziger, 717-336-1600

Collectibles Industry is in the Doldrums

Stevens, PA, October 2, 2002 — Continuing a three year stretch of slipping sales, the collectibles industry declined 9% in 2001 to $6.5 billion in total industry revenues, dropping from $7.1 billion in 2000, according to the annual market research study, Collectibles Industry Report, 2002, published by Unity Marketing. The figurine and sculpture product category, which accounts for the industry's largest share of retail sales, fell even faster than the industry as a whole with 2001 sales down 20% to $1.9 billion at retail. As consumer demand for figurines weakens, the industry's top three public companies, Department 56 (DFS), Enesco (ENC) and Boyds (FOB), that depend upon the category for a substantial share of their sales, also found their performance off in 2001. Together these three companies account for about 25% share of the industry's estimated $2,591 million wholesale sales through retail channels, apart from direct marketing.

What can these industry leaders and other companies competing in the collectibles industry do to get sales back on track? Marketing consultant Pam Danziger, president of Unity Marketing and author of the book Why People Buy Things They Don't Need (Ithaca, NY: Paramount Market Publishing, 2002), offers some advice. "The desire for people to collect things is deep seated and something that transcends time and place. People will spend money to acquire items that they keep, cherish and collect, as eBay, the internet auction site specializing in collectibles, has proved. Today even as eBay diversifies into new product categories, including business-to-business trading, they still report that collectibles are among their top revenue- producing categories. Unity's latest research shows that some 40% of U.S. households collect some collectible item. With a total potential market of 43 million American households, collecting is hardly a passion that is going away," Danziger says.

"With the collector market so strong, it only makes sense that that the collectibles industry would be growing right along with it, but that is not happening. One reason for this is that the very strategies that made collectible companies successful in the past are now the same ones that are sending the industry and their company's sales into a tailspin. That is, collectible companies have traditionally been product-driven. It's what made them great in the past as they designed and marketed attractive, emotionally-compelling products at an affordable price. But that strategy isn't working anymore. The collector market has changed, they want new items to collect and they are finding them in new types of stores and retail venues where today's collectibles marketers don't have a presence. The only way for collectible companies to turn their sales around and get back on track is they must transform themselves into consumer-driven marketers," Danziger advises.

"Today's collector is younger, smarter, more sophisticated, more affluent and shops in a much wider range of retail venues than yesterday's collector. Collectible companies must market to the passion of these new collectors. They need to learn more about them, delve into the collectors' inner life so that they can then design new collectible products that touch the target consumers' hearts and emotions. For too long the collectibles industry has used trade shows and the products that other companies are showing as the primary stimulus for their own new product development. That product-driven strategy has led us to where we are today. Reinventing the collectibles industry means getting in touch with the new collector, understanding their wants and desires and creating products based on that," Danziger says. "My book, Why People Buy Things They Don't Need, outlines a strategy for learning more about one's target market. Unity can apply this strategy for collectible companies that want to reverse their downward slide and get sales going in a positive direction."

This year's Collectibles Industry Report, 2002 details the facts, figures and trends related to the collectibles industry, based upon surveys among collectible companies, specialty gift and home retailers and Unity's latest survey of collectors. The Collectibles Industry Report, 2002 reveals the trends impacting the industry and explores industry sales and growth in 2001 by distribution channel and product form. Also analyzed are pricing trends, product themes, the demographics of the collector market, sales of limited editions and advertising and promotional spending. This 200-page report is available for $1,500 NOW $750 directly from Unity Marketing, a marketing research and consulting firm. Pam Danziger also offers marketing consultation to companies based upon her 'why people buy' research strategy. For more information, contact Pam Danziger, Unity Marketing, 717-336-1600 or visit www.unitymarketingonline.com and www.whypeoplebuy.com. email: pam@unitymarketingonline.com.