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Doll-maker hits it big with little girls

By Farnoosh Torabi | STAFF WRITER

June 12, 2006

Of the approximately 6,000 new toys expected to enter the U.S. market this year, only a fraction are likely to win kids' hearts and parents' wallets. But one Manhattan doll-maker has managed to do just that in her first year in business.

Shelag Herzog has sold more than 20,000 of her Penelope Peapods since starting the business out of her home last summer.

The dolls come in 11 different fabrics, but the real draw for little girls, said Herzog, is that the dolls can change from being in a bassinet to being in a playpen. They can also be disguised as purses.

"Girls love to take a doll and put it in something," Herzog said. "They also like their mothers' purses. This is a natural combination."

Herzog speaks from experience; she's a mom to seven children, ranging from twin toddlers to teenagers. Her inspiration for Penelope Peapod arrived during a recent trip to her childhood home in Austin, Texas. There, rummaging through an old chest of toys, she came upon a similar doll her grandmother made her 35 years ago.

The memory of latching onto that doll as a young girl convinced Herzog that, given a modern makeover, the doll could be a hit with young girls of today. To be sure, Herzog, then a stay-at-home mom, arranged focus groups in her living room with highly opinionated consumers -- 5- and 6-year-old girls.

"I took their advice seriously, asking them which fabrics they liked, which dolls they liked best," Herzog recalled. "I still use these little girls."

Coming up with name was easy -- "I just always liked the name Penelope," Herzog said.

The challenge was getting the exposure the doll needed to succeed. Immediately after developing the first Penelope Peapod sketches, Herzog bought a booth at the American International Toy Fair. The first day, representatives from Neiman Marcus and Toys "R" Us approached her. By the end of the four-day event, Herzog had more than 40 retail clients.

Later, with help from her publicity agent, Herzog sent Penelope Peapods to Hollywood moms with young daughters, including Gwyneth Paltrow and Brooke Shields, in an effort to boost the dolls' profile.

The dolls retail for about $40, and are available at F.A.O. Schwarz, Neiman Marcus and more than 300 boutiques across the country. Herzog keeps her costs low by manufacturing the dolls in China.

After investing $5,000 into the project, Herzog said, she's already turning a profit. "I had high hopes, but I thought it would be a much slower process," she said.

Herzog recently designed exclusive Penelope Peapods for handbag diva Kate Spade, using Spade's patterns. She hopes to strike similar deals with other designers.

Meanwhile, she is adding an Asian version of Penelope to the collection and creating a slew of accessories, including rockers and clothing. Later this fall, she plans to introduce the Peapod Pet. This pet version, she hopes, will appeal to boys as well as girls.

Farnoosh Torabi is the business producer at NY1 News. If you know of an interesting small business, e-mail her at amSmallBusiness@gmail.com.