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Hello Kitty: Cute no more?
The kitschy feline is looking for more turf in the U.S. after hitting a mid-life crisis in Japan.
November 19, 2003: 7:35 AM EST
By Parija Bhatnagar, CNN/Money Staff Writer

NEW YORK (CNN/Money) - Hello Kitty, the mouthless Japanese character export that became a multibillion-dollar global phenomenon, is in need of greener pastures

For her corporate parent, Sanrio Corp., declining sales in her No. 1 market, Japan, could overshadow the festivities planned to commemorate Kitty's milestone 30th birthday next year.

"In Japan, Hello Kitty is a mature brand, even though it has seen substantial growth over the years," said Bill Hensley, spokesman for Tokyo-based Sanrio, adding that sales of the Kitty-branded products last year declined 5 percent year-over-year.

There's more bad news.

Courtesy: Sanrio  
Courtesy: Sanrio

According to Japanese research firm Character Databank, last year Disney's Winnie the Pooh -- or Pooh san as he's affectionately known in Japan -- ousted Hello Kitty from the No. 1 slot in the country's competitive $13 billion annual character-goods market. Mickey Mouse and Pokemon were at No. 3 and No. 4.

But, if there's to be a Kitty comeback, it's more likely in Omaha than Osaka.

"Our biggest market for her is still Japan and southeast Asia, but our big push going forward is the Western Hemisphere, primarily the U.S. market," Hensley said.

Kitty brought in $1 billion in 2002 for Sanrio, about half the company's total revenue. In the U.S., Kitty raked in $100 million from the branded products and an additional $400 million in licensing fees.

"Clearly, the U.S. is our No.1 growth market and we're looking to expand," Hensley said.

Hello, America

In the United States, Sanrio currently has about 35 Hello Kitty boutique stores around the country and licenses the brand in an additional 80 locations, including discounters Wal-Mart (WMT: Research, Estimates) and Target (TGT: Research, Estimates), and at toy retailer Toys "R" Us (TOY: Research, Estimates).

The Hello Kitty store in New York's Times Square opened in 2000 and has already undergone two expansions. The store's assistant manager, Karen Huang, said customer traffic has grown steadily, mostly a mix of locals and tourists in search of the latest Kitty paraphernalia.

"Friday and Saturday are our two busiest days, and we get between 1,000 to 1,500 customers," Huang said. "It's mostly kids and women in their 20s and 30s who buy the products. With the older customer it tends to be the nostalgia factor -- where they grew up with Kitty and they want to add to their collection."

Japanese designer Ikuko Shimizu created the furry feline and her lesser-known twin sister, Mimmy, in the early '70s. The idea behind the character and the name was to foster communication between the giver and the recipient, Hensley said.

The Hello Kitty store in New York's Times Square.  
The Hello Kitty store in New York's Times Square.

"Gift-giving is an important part of the Japanese culture," he said. "In Japan, 'Hello' communicates the idea of open communication. That's why she was named Hello Kitty."

The first product that featured the tiny white kitten wearing her pink bow was a small vinyl bag back in 1974.

Today, at any one time, there are between 6,000 and 8,000 Kitty products, everything from pencils and notebooks to jewelry, cosmetics, shower curtains, a new $259 combined TV/DVD player, and even a $550 Hello Kitty snowboard.

And if you didn't know this already, she also has two theme parks in Japan.

But what's her appeal in the West?

"It's simple. She's cute, exotic and a little mysterious. That's why Kitty has lasted as long as she has, even though her biggest appeal is to the most fickle of consumers -- little girls" said Richard Lachmann, professor of sociology and an expert on popular culture with the University of Albany.

Store manager Huang agreed.

Target Corp.
Toys R Us Incorporated

"The word 'cute' is the most popular with every customer who walks into the store, followed by 'Oh-my-god,'" said Huang.

And Kitty's appeal isn't lost on celebrities either. A framed picture of actress Cameron Diaz wearing Hello Kitty jewelry hung on a wall behind the store's cash register.

"Celebrities like Cameron Diaz and Christina Aguilera are avid Kitty fans and collectors," Huang said. Publicists for both Diaz and Aguilera could not be reached for comment.

Meanwhile, Sanrio is gearing up for special events next year in Japan and the U.S. "We're also bringing back the original vinyl bag and a few other products by mid next year," Hensley said.

"Hello Kitty was propelled from day one by the character's cute and simple design," he said. "After 30 years, we're glad to see that people are still buying her products."  Top of page

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