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eToys unveils a pair of online stores

Casting a net for customers in an uncertain market, the online retailer sets up shops for party planners and hobbyists.

Casting a net for customers in an uncertain market, eToys on Friday launched two new online stores and merchandising features.

The Party and Hobby stores have taken their place on eToys' welcome page, joining the site's other Web retail sections dedicated to toys, books, video games, software, DVDs, music and videos. eToys also launched a number of holiday-themed merchandising features, the company said in a statement.

The party store focuses on birthday and holiday parties and other children-oriented festivities. Party planners can choose from at least 80 themes, create and customize online invitations, and get ideas for activities, games and food.

Santa Monica, Calif.-based eToys is trying to tap into the fast-growing, nonseasonal $5 billion market for children's party goods.

The hobby store, meanwhile, is stocked with thousands of items including model trains, planes, automobiles and rockets. Hobby enthusiasts comprise a $4 billion market in the United States.

The announcement comes as Internet retailers have been struggling through a market shakeout. eToys online competitor and other e-tailers have had to either consolidate their online operations or close them altogether.

For example, in September closed its Web site and opened itself to a new relationship with The e-tail arm of the giant Toys "R" Us chain has struggled through much of its two years of solo operations. The site lagged behind eToys in holiday sales last year, lost its designated chief executive, saw a high-profile investment from Benchmark Capital fall through, and had difficulties fulfilling holiday orders.

The eToys move also comes as the market for e-tail stocks has been crushed under the weight of investor skepticism. With their stocks just moving off 52-week lows, many e-tailers have struggled to find financing to continue operations while they await profits.

In its most recently concluded quarter, eToys reported a $60 million loss, some 33 percent greater than in the year-earlier period, while sales approximately doubled to $26 million, in line with analysts' expectations. The company said it benefited from sales of summer and back-to-school items and specialty products, as well as from advertising, and that losses should begin to narrow in the current quarter.

The head of eToys sees good days ahead.

"As we enter our peak season in 2000, I believe has never looked better, has never been so well organized, and has never offered consumers a better overall experience than it does today," Toby Lenk, president and chief executive officer of eToys, said in a statement.