Wal-Mart finds T.M.X. Elmo cache

Retailer announces it will sell 4,000 of the in-demand dolls every day this week on its Web site.

By Parija B. Kavilanz, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- After experiencing an initial shortage of T.M.X. Elmo, one of the hottest toys this year, Wal-Mart announced Tuesday that it has landed the Elmo jackpot and will sell 4,000 dolls every day this week on its Web site.

According to the company, walmart.com will make the toys available "around noon E.T. on a first come, first serve basis" for $39.97 apiece.

Still, it doesn't mean you're likely to score T.M.X. easily on walmart.com.

One frustrated consumer and mother of a 20-month-old e-mailed CNNMoney.com that she "went to the Walmart Web site a few minutes before noon, and several times every few minutes thereafter ... and all I got was an OUT OF STOCK message."

Walmart.com currently lists T.M.X. as "out of stock."

In response for a comment, walmart.com's chief marketing officer Raul Vazquez said Elmo sold out a few minutes after the company made Tuesday's allotment available.

"It sold out in a heartbeat," he said. "At some places [T.M.X.] Elmo is selling for $100. We're still offering Elmo to our customers for $39.97 but it's in very short supply," he said and suggested that Elmo seekers try their luck again later this week.

The much-anticipated 10th-anniversary Elmo was a sellout as soon as the toy was launched in late September.

Industry analysts warned that T.M.X would be in short supply over the holiday season, especially after toymaker Mattel (Charts) indicated that it wouldn't have enough inventory to meet the robust demand leading up to Christmas.

Sure enough, stores including Wal-Mart (Charts), Toys "R" Us and others quickly put up "out-of-stock" signs on T.M.X., even ahead of Black Friday.

Now, with less than two weeks to Christmas, how did Wal-Mart suddenly score the Elmo jackpot?

"We recently secured more Elmo inventory from our supplier and we wanted to give our customers one big opportunity get the toy before Christmas," Wal-Mart spokeswoman Linda Blakely said.

But some analysts weren't buying that explanation and even speculated that Wal-Mart may have been holding back Elmo inventory.

"No question this was a calculated move by Wal-Mart. How is it that thousands of Elmos suddenly appear on Wal-Mart's doorstep so close to Christmas?" said Marshal Cohen, chief retail analyst with market research firm NPD Group.

"Wal-Mart is struggling with holiday sales and it's playing every card it has to drive traffic to its stores and its Web site," he said.

Richard Hastings, chief retail analyst with Bernard Sands, said he considered Wal-Mart's move to be "just an advertising ploy."

"At this point everything that Wal-Mart does has a question mark around it," he said. "I don't know whether or not Wal-Mart was holding back the inventory for Elmo but these shortages occur because retailers are being very cautious about their inventory levels this year and they're not pulling enough supply from their vendors in a timely manner."

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