Like all mega-hit properties that soar high and then fall back down to earth, the Teletubbies will have to take some baby steps before its merch program can take off again–a reality that Ragdoll U.S. fully comprehends.

In fact, patience is the underpinning of the New York-based subsidiary’s consumer products relaunch strategy for the Tubbies. ‘What we’re looking to do is to gradually reintroduce the brand so we can end up in a place where we’ll have four to six years of sustainable growth,’ says Andrew Kerr, the State-side arm’s VP of marketing and strategic alliances.

Though the Teletubbies’ popularity has clearly ebbed since its heyday between 1998 and 2000, it was the slow disintegration of the property’s North American licensing agent, The itsy bitsy Entertainment Company, that slowly killed its merchandising program over the last 18 months. ‘We went through holiday 2001 without any new items in the marketplace. The offering that was available to consumers–and it was a limited one at that–consisted of old product, likely shopworn and likely discounted,’ says Kerr. ‘That sort of presentation doesn’t do anything for the longevity of a brand.’

Worse still, after itsy bitsy and Hasbro mutually decided against renewing their agreement in January 2001, the property was left without a master toy licensee, which is typically the engine that drives merchandising programs for preschool properties at retail.

When Ragdoll’s deal with TibECO ended last fall, the company opened an office in New York and began representing the property in North America itself. For Kerr (who left itsy before joining Ragdoll), getting new Tubbies toys onto shelves quickly was at the top of the priority list, a goal that was met when Ragdoll signed an exclusive deal with Toys ‘R’ Us in late April. The two-year agreement allows TRU to produce and distribute Teletubbies plush in North America, as well as giving the toy retailer the first-look option on all imported Tubbies toys for that period.

Toys ‘R’ Us will create 12- and 14-inch talking plush based on all the characters from the series, and these SKUs will go on sale in Q3 or Q4. The retailer will also put up four-foot Teletubbies end caps in all of its U.S. stores, as well as erecting a special boutique in it’s flagship Times Square location. TRU will also promote the Tubbies in its circulars and on its website.

Most importantly for Ragdoll, the TRU deal gives the brand some guaranteed retail real estate. ‘It’s something quantifiable that we can talk up with licensees and retailers,’ says Kerr.

His hope is that the TRU end caps will grow into chain-wide boutiques featuring products from the company’s 15 to 25 existing licensees. Though he says he plans to keep the number of Tubbies licensees in the 25-to-30 range for the next four years, Kerr will be taking the property to Licensing Show in hopes of finding licensees to create product in the apparel, interactive and ancillary toy categories. Ragdoll U.S. is also on the hunt for a company to distribute a line of toys created by Tomy, the property’s U.K. master toy licensee.

Once the TRU exclusive has expired, Kerr hopes to sign a new North American master toy license. Ideally, Ragdoll would launch the new products for spring 2003, coinciding with the anticipated State-side TV debut of Teletubbies Everywhere, a new spin-off show that’s expected to start airing on Cbeebies in the U.K. in July. At press time, Ragdoll was still in discussions with PBS (which signed a contract last year to air the original Teletubbies series until 2008) about broadcasting TE.

When the new merch hits retail, consumers will notice that the characters look slightly different now in order to stay in line with changes made for the new series. One significant difference is the absence of Teletubbyland on all of the Tubbies’ packaging and branding materials. Henceforth, the characters will appear against a range of primary colors. Apart from livening up the look of the brand, Ragdoll made the change because the characters are well-known with so many caregivers that they no longer need the context of Teletubbyland in order to be recognized, says Kerr.

Provided the Toys ‘R’ Us exclusive turns out to be the catalyst Ragdoll needs to jumpstart its North American merchandising program, Kerr says the company also plans to develop a live Teletubbies musical revue, which would head off on tour sometime in 2004.