Toymaker Struggles in Movie-Obsessed World

BOSTON (TheStreet) -- In 1993, two business executives and an inventor teamed to form the specialty toymaker HandsOnToys. The company has been the darling of parents' magazines and toy fairs, with award-winning products such as Toobers and Zots (foam and wire construction toy), the Wiggly Giggly ball and the goopy modeling compound Floam.

The Lawrence, Mass.-based company has fallen on hard times in recent years as retailers stock up on products tied to movies by Walt Disney(DIS Quote) and Marvel Entertainment(MVL Quote) instead of educational toys. The staff at HandsOnToys has dwindled to two full-timers and a part-timer from a high of 40.

"It's possible that HandsOnToys will not survive," says company Chief Executive Andrew Farrar. "We're on the knife's edge."

Farrar recently talked to TheStreet.com about entrepreneurship, competing for shelf space and other issues facing the struggling specialty toy market.

How did you jump into the toy industry?

Farrar: I teamed up with two friends, and we started discussing ideas for a new business. It was artist Arthur Ganson's invention of Toobers that led us to start a toy company. If he had developed a new telephone we may have invented a telephone company.

How did Toobers come about?

Farrar: Ganson is a kinetic sculptor by passion and was installing a piece in Austin, Texas. Late in the evening he looked off into the distance and saw what he thought was a piece of foam with wire inside and he thought, 'I wish I had invented that.' When he got closer he saw that it was a balloon sculpture and realized, 'I did invent that.' And that was the product around which we built HandsOnToys.