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The Honolulu Advertiser
Posted on: Sunday, January 23, 2005

Topps struggles to break forth from pack of card companies

By Allan Drury
Westchester (N.Y.) Journal News

The day Anthony Gurgigno's father took him to a baseball memorabilia store and lavished him with a Topps card of Mickey Mantle remains one of Gurgigno's warmest childhood memories.

Topps is trying to avoid a fourth straight year of declining earnings. The card company is being hit by competitors, all vying for the attention of collectors.

Frank Becerra Jr. • Gannett News Service

Gurgigno is on the other side of the counter these days, working as manager of the American Legends store in Scarsdale, N.Y., but he says the 1966 Mantle remains one of his favorite cards.

He prefers cards produced by Topps, the company that popularized the concept of placing pictures of players and slabs of bubble gum in packs and selling them to American youths.

But just as Gurgigno's beloved New York Yankees lost to the Boston Red Sox in the 2004 playoffs, Topps has been getting hit hard by the competition. The Upper Deck Co. LLC, Fleer/SkyBox International LP and Donruss Playoff LP fight Topps for the attention of collectors.

"Most of what Topps has tried hasn't worked," said stock analyst Dennis McAlpine, who runs McAlpine Associates in Scarsdale. "The good news is they've got a lot of cash left."

McAlpine said he believes the New York-based company should try to fix its problems by expanding into other kids' product lines, such as toys. But he said the company, which cut its first chunk of gum in 1938 and its first baseball cards in 1951, has grown staid.

"I think they may be hurt by having been around so long, by having a long history," he said. "They get used to what used to work."

The Topps Co. Inc. is trying to avoid a fourth straight year of declining earnings. The last increase was in 2001 when the company made $88.49 million, or $1.91 a share, mainly due to kids flocking to stores to buy the company's Pokémon cards.

The company hasn't gotten the benefit of another pop-culture craze since then and has been hurt by the closing and consolidation of retailers, McAlpine said.

The company also is losing sales this year because of the National Hockey League lockout. Topps canceled its hockey card set because of the labor war.

Topps employs 420 people and has offices in Canada, Britain, Ireland, Italy, Brazil and Argentina. The company's confectionery brands include Ring Pop, Juicy Drop and the famed Bazooka bubble gum. It issues cards under the Topps, Stadium Club and Bowman brand names.

The company's first, undersized cards contained a head shot of the player and a line or two about his career, but no statistics. The next year the company produced a colorful 407-card set on thick cardboard stock. Each card included the team logo and a facsimile autograph on the front, and a biography and stats on the back.

Topps' entry into the market was timed perfectly. The baby boom provided millions of young collectors who would plunk down a couple of pennies and hope for a card of their favorite player.

The company bought its main competitor, Bowman, in 1955 and convinced a judge a few years later that a card company called Fleer — which sold its cards with cookies — was violating Topps' exclusive contracts with players.

But the tables turned on Topps in 1980 when a federal judge in Philadelphia, ruling on a lawsuit Fleer had filed, cleared the way for Fleer to enter the market.

Clay Luraschi, a Topps spokesman, said the company tries to issue sets that target different kinds of collectors. That means packs of 10 cards from the base set for less than $2 for the kids and much pricier packs that might appeal to well-off adults.

"Collecting has become so specialized and there are a lot of different kinds of collectors," he said. "You still have your set-builder collectors, and then there are some people who just collect rookie cards. There are some people who just collect their specific teams."