Retailing 
 
 Remember the Cabbage Patch Kids craze? The Tickle Me Elmo frenzy? Meet their 2009 brethren, Zhu Zhu Pets. The quintet of electronic hamsters has been the runaway hit of the recession-hobbled holiday season so far. The furry little, wheeled critters scoot around a Habitrail-like track, spin in a hamster wheel, and drive little hamster sports cars. The battery-powered pets coo and squeak and have a little artificial intelligence—knowing to make teeth-brushing sounds when they enter their little bathrooms, for example. "They're so real—without the mess," chirps a television commercial. They are also flying off the shelves, with many of the nation's largest retailers already out of stock. The critters were designed to sell at retail for $9.99 each but they have recently been selling for as much as $40 on eBay.com (EBAY) and Amazon.com (AMZN). "Nobody saw these little hamsters coming," says Chris Byrne, a toy reviewer at the Web site Timetoplaymag.com. Zhu Zhu's Path to MarketThe $20Â billion toy industry has been declining for years, as kids increasingly trade traditional toys for video games and other consumer electronics. The recession has been particularly hard on toymakers such as Mattel (MAT) and Hasbro (HAS), as skittish retailers held back on orders this year. The success of Zhu Zhu Pets, though, shows that with a little humor at the right price, even a tiny toy company can have a monster hit. The pets are made by Cepia, a seven-year-old outfit in St. Louis. It's the second toy startup for company CEO Russell Hornsby, a Mattel veteran who says his first company, Trendmasters, went under in the 2002 recession after his bank cut his funding. Trendmasters was acquired by rival Jakks Pacific (JAKK). Cepia's other products include the less successful Glo-e line of teddy bears, which have lights inside them, and the DigiWidgets desktop robots. Hornsby, 56, says Zhu Zhus were inspired by his own family's pet hamster (which, regrettably, isn't around to bask in the fame: It got eaten by the family cat). The toys were just a prototype as recently as last November. The company tested them with focus groups of kids at Wal-Mart (WMT) and Toy "R" Us stores in Phoenix this past May. The company even changed the product name from Go Go Pets right before the September retail launch. Ramping Up Production to Meet DemandAfter the sneak peak in Phoenix, Toy "R" Us committed to a sizable order. Company spokesperson Kathleen Waugh says the retailer isn't selling them through its Web site or advertising them in flyers. For this year's Black Friday sales push, though, it's letting the media know it should have "thousands" of Zhu Zhus in stock. Purchases are limited to one per household. "It's so hot we're going to use them to drive in-store traffic," Waugh says. Rival Wal-Mart, meanwhile, got a big shipment in late October and advertised Zhu Zhus in its weekly circular for Sunday, Nov. 8. Some stores put the pets out too early, though, and customers weren't allowed to purchase them, spurring rumors that Zhu Zhus had been recalled. In early November, Hornsby hopped on a plane to spend the next two months in China boosting production of Zhu Zhus. He convinced the four plants the company has under contract to increase their output from 70,000 pieces to 120,000 pieces per day. Hornsby says retailers that were initially hesitant to commit to Zhu Zhus are now paying extra to air-ship the hamsters to the U.S. The toy's phenomenal success is proving bittersweet, Hornsby says: "It's a big hit; with it comes lots of anxiety. It's heartbreaking to go to the stores and see people wanting [a Zhu Zhu] who can't find it." 

 "Zhu Zhu Pets are everywhere!" -- or so goes their catchy jingle. Come Christmas morning, retailers across the country hope that will be true. 
 
 Zhu Zhu Pets, the cuddly, on-the-go hamsters who squeak, roll, even drive their own cars, are on their way to becoming the holiday season's "must-have" toy. 
 
 Retailers like Ken Levinsohn, owner of the Learning Express toy store in Scarsdale, N.Y., hope they'll be the hamsters that save Christmas. 
 
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 "Based on the demand, it's going to be hot," Levinsohn said. 
 
 The trouble is for Levinsohn is that he has none to sell. Following in the footsteps of must-haves of seasons past -- the Furby, Tickle-me Elmo, Cabbage Patch dolls, Beanie Babies -- supply seems to grow short just when demand is high, and Zhu Zhu Pets are flying off store shelves. 
 
 "It's easier to get a swine flu shot than to get Zhu Zhu Pets," said customer Julie Gerstenblatt. 
 
 Levinsohn said he has been waiting for another shipment for nearly two months. "Clearly, the demand is there. The product is not. It's very frustrating," he said. 
 
 But it isn't just small independents like Levinsohn who are having trouble getting hold of Zhu Zhu Pets. Even the biggest retailers say they can't get enough. 
 
 Selling Out in Hours 
 
 At the Toys "R" Us in New York City's Times Square, salespeople don't bother putting Zhu Zhu Pets on the shelves. Every shipment has sold out in a matter of hours. 
 
 One salesperson told us that even the accessories, which are sold separately from the coveted pets, were running low. At one store, shopper Theresa Brdaric scored the last Zhu Zhu Pet car. 
 
 "The cars are going for quite a bit on Ebay. The cars and the ball are the biggest sellers on Ebay, I think. I'm just happy to get some," she said. 
 
 On Ebay, the $9 hamsters are being auctioned for up to $60 a piece. 
 
 Retailers Look to Fad Toy to Lure Shoppers 
 
 Chris Byrne, known in industry circles as the "toy guy," has seen many fads come and go, but still can't say why lightning strikes any particular toy. 
 
 "At the end of the day, you can't predict a fad. Some people will tell you you can but it's not possible. When something really catches the imagination,then you've got people who wouldn't normally buy these toys looking for them," Byrne said. 
 
 "I think with the Zhu Zhu Pets -- everybody's been talking technology, cell phones, iPods. This is sort of, even though its great technology, it's the antithesis of that because it's really fun, and creative and it's a classic play pattern," he said. 
 
 Last Christmas, with the economy in turmoil, retailers suffered badly. But Zhu Zhu Pets are miraculously bringing people back into toy stores. 
 
 "You know, it may be the hamster that saved Christmas because it's a rising tide lifts all boats. It's got people coming to the stores. They're looking to find these. But then they're looking around at other things," Byrne said. 
 
 Where Zhu Zhu Pets Are Born 
 
 "Nightline" visited the Zhu Zhu headquarters near St. Louis, where the pets' creator, Russ Hornsby, introduced us to his top-selling line of characters. They have names like "Mr. Squiggles," "Chunk," "Num Num," and "Pipsqueak." 
 
 Hornsby said they didn't make many of the robotic hamsters at first, because he didn't know if they would catch on. 
 
 The response has been "phenomenal ...unbelievable," he said. "I've never seen anything like this in my entire life and probably will never see anything like it again in my life." 
 
 Hornsby credits Zhu Zhu Pets' popularity to fair price, novelty and the "nag factor" -- children whining for their parents to get them. The products retail for about $9. 
 
 "Whenyou have an item under $10 today, the consumer is going to rally towards it. That's provided that in fact kids are excited about it," he said. "And the excitement is, 'Hey mom, did you see the hamster that just drove across that TV set? I want one, Mom.' That's the 'Hey mom, I want it, please!'" 
 
 Hornsby has gambled before and lost. He was the brains behind the "Powerpuff Girls" and "Rumble Robots," but eventually, like most fad toys, they disappeared. 
 
 Kids Going Ga-Ga for Zhu Zhu Pets 
 
 At the company's height, Hornsby said he had a staff of 600 and annual sales of $250 million. Then it was gone. 
 
 "It was actually probably within a few days it was gone. Lights were turned out. Boom," he said. 
 
 Now, he and daughters Natalie and Ashley are back with Zhu Zhu pets. His firm, Cepia, is smaller and leaner, with only 15 staff employees this time around. They handle everything from design to marketing to creative development and are currently producing 220,000 Zhu Zhu pets a day. 
 
 To test Zhu Zhu Pets' popularity, we gathered a panel of "experts" at the Elegant Child preschool outside St. Louis. (In the interest of full disclosure, they included Vicki's niece Sienna and cousins Jaden, 7, and Blake, 10). 
 
 "I like the speed and the, the ball thing. The thing they ride in. They push it and it rolls," young Jaden Fields said. 
 
 Another kid said, "I want one for Christmas." 
 
 When asked if they would rather have a real hamster or a Zhu Zhu Pet, many kids said Zhu Zhu Pets. 
 
 "Because you can turn it on and off, and you can't turn a hamster on and off," said nine-year-old Sam Wolfe. 
 
 On Tuesday, toy store owner Ken Levinsohn finally received his shipment of Zhu Zhu Pets. It was only a third of what he had expected. 
 
 "Most likely they'll be gone by the end of the day," he said. 
 
 Levinsohn e-mailed anxious customers who had been on his waiting list. He sold out of his allotment in only an hour and a half. 
 
 Zhu Zhu Pets' creators say they'll have four to five million in stores by Christmas. 

 (CBS) They were all Olivia Mondesando wanted for her birthday."Well, I felt really excited to get Zhu Zhu pets because I just love them," Olivia said. "Because of their little cute faces. How they talk."They have names like "Chunk," "Pipsqueek," and "Num Nums."reports these robotic rodents suddenly top every little girl's holiday wish list.Olivia's mother Deb said, "it's the toy that everyone wants that you can't find."Melissa Post has been on a hamster hunt for weeks now for her daughter Jessica."I called every Toys R Us, Walmart and Target within two hours of my home."Zhu Zhu pets retail for only $8 -- if you can find one. But on the Internet, they're going for much more.The hottest holiday toy doesn't come from one of the mega toy makers. It's made by the little St. Louis-based Cepia company."In our world wide network we have 16 people here in St. Louis, Mo.," said Natalie Hornsby, director of brand development and marketing strategies. "We have about 25 people in Shenzhen, China."Cepia came up with the toy hamster idea only a year ago. Toys R Us helped test market them in Phoenix."We couldn't believe the numbers," said Jerry Storch, CEO of Toys R Us. "When we first looked at them we thought there was something wrong with the computer."Now fans are filling YouTube with their Zhu Zhu videos. One analyst projects holiday sales of $50,000,000. Cepia has cranked up three more factories in China to try to keep up with demand.Electronic hamsters. Who knew? This little company in St. Louis, that's who. 

 The five different battery-operated hamsters — Chunk, PipSqueak, Mr. Squiggles, Num Nums and Patches — are mainly coveted by girls, according to toy industry professionals. This possibly makes sense; Jim Silver, editor in chief of TimetoPlayMag.com, pointed out that girls also own the majority of live hamsters. 
 
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 Boys, it appears, are wild this year for Bakugan Battle Brawlers, a game that uses cards and action figures hidden inside small spheres. The goal is to be the first player to capture three of your opponent’s cards, known as Gate cards. (The name comes from the Japanese words “baku,” meaning “to explode,” and “gan,” meaning “sphere.”) Yet as popular as Bakugan is, the hamsters are upstaging that game and everything else in toy land this season. 
 
 “It clearly is the hottest phenomenon of the year,” said Gerald L. Storch, chairman and chief executive of Toys “R” Us. “There’s no doubt about that.” 
 
 After seeing a commercial in October for Zhu Zhu Pets, Tracey Henry of Safety Harbor, Fla., decided to buy one for her 6-year-old daughter, even though the girl wanted a real hamster for her birthday. Ms. Henry considered a fake hamster a better idea, so she went to Toys “R” Us. 
 
 “The shelves were empty,” she said, “and there were these signs that said, ‘Limit four Zhu Zhu Pets per day.’ ” 
 
 Ms. Henry, who writes the blog SuburbanDiva.com, returned home and began calling local toy stores and scouring the Web sites of Toys “R” Us, Wal-Mart and Target, with no luck. In the end, she bought a Zhu Zhu Pet (pronounced zoo zoo) on Amazon, marked up to $34.99. “We got the yellow one,” Ms. Henry said. “We should rename it ‘greenback.’ ” 
 
 The nation’s stores, which have become familiar with these sorts of tales, are trying to round up enough hamsters for the holidays. 
 
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 Toys “R” Us said this week that it would have tens of thousands of Zhu Zhu Pets in stock on the Friday after Thanksgiving. But consumers will have to drink coffee with their turkey if they want a hamster: Toys “R” Us stores will open on Thanksgiving at midnight, and the first 100 customers in line will receive a ticket for a Zhu Zhu Pet, with a limit of one for each household. 
 
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 “Others may try to make a lot of noise out of a few hamsters,” Mr. Storch said, “but we have by far the most inventory and opportunity to find Zhu Zhu at any retailer.” (Next month, Toys “R” Us plans to offer an exclusive $100 Zhu Zhu Pets set that includes — brace yourself — two hamsters, an exercise wheel, a fun house, a car and garage, an adventure ball and a sleep dome.) 
 
 Melissa O’Brien, a spokeswoman for Wal-Mart Stores, declined to comment on the chain’s Black Friday hamster plans, though she said the chain had more Zhu Zhu Pets on the way. 
 
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 “At this time, we’re even air-shipping them in some markets,” she said. But she warned that when the hamsters do arrive, “a lot of them don’t spend the night in a store.” 
 
 Indeed, Cepia has found itself increasing hamster production and fielding phone calls from parents desperately seeking Zhu Zhu Pets, as well as their slightly pricier accessories, like a ramp with slide and a garage with car. There is even a surfboard. 
 
 Ms. Hornsby said the hamsters take their name from “zhu zhu,” or “little pig” in Chinese, which the folks at Cepia thought was fitting, given that hamsters are known for making messes. 
 
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 Mr. Silver of TimetoPlayMag.com said a toy hamster had not been this hot for at least a decade, when Americans became enamored of one that danced to “Kung Fu Fighting.” 
 
 Cepia is relatively new. Founded in 2002, it has 16 employees in the United States and 25 in China. Ms. Hornsby, the marketing director, said Zhu Zhu Pets were the company’s breakthrough toy. “This is definitely our big fish,” she said, forgetting the hamster lingo for a moment. “Every day, we are humbled by what’s going on.” 
 
 The creators of Bakugan have more experience with this sort of craze. Bakugan, a Japanese import that some industry professionals have likened to the Pokémon phenomenon, was a hit last Christmas. The must-have addition to the toy line this year is Bakugan 7-in-1 Maxus Dragonoid, which, at $39.99, enables children to connect several game pieces to form one intimidating creature. Toys “R” Us has an exclusive 7-in-1 Bakugan, New Vestroia Maxus Helios, also for $34.99. 
 
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 Harold Chizick, vice president of global communications and promotions for Spin Master, the creator of Bakugan, said the toys were all the rage because children liked collecting the cards and action figures just as much as battling. There is also a hit Bakugan Battle Brawlers anime television show that has fueled sales. “We have increased manufacturing and expedited shipment to be here for the holiday season,” Mr. Chizick said. 
 
 While it is the second Christmas for Bakugan, Mr. Silver of TimetoPlayMag.com noted that “when you have a hot item like this, usually Year 2 is bigger than Year 1.” That is primarily because the toy companies are able to ramp up to meet demand the second year. 
 
 Josh Green, chief executive of Panjiva, which tracks water-borne goods, said shipments of Zhu Zhu Pets to the United States skyrocketed for the three months ended in October. 
 
 But a warning to mischievous children everywhere: Mr. Green noted that shipments of coal were also up, by 6 percent, over last year.
– The year's "must-have" toy has been crowned. For the uninitiated, Zhu Zhu Pets are electronic hamsters. They typically cost under $10, but stores are selling out quickly and prices are soaring online. Witness the coronation: BusinessWeek: "Remember the Cabbage Patch Kids craze? The Tickle Me Elmo frenzy? Meet their 2009 brethren, Zhu Zhu Pets." ABC News: "The cuddly, on-the-go hamsters who squeak, roll, even drive their own cars, are on their way to becoming the holiday season's 'must-have' toy." New York Times: "The hottest toy this holiday season is not a ticklish red monster. It’s a fake hamster." CBS News: "The hottest holiday toy doesn't come from one of the mega toy makers. It's made by the little St. Louis-based Cepia company."