Will Elmo Scandal Hurt Toy Sales?

Sunny days may yet sweep the clouds away for Elmo, the Sesame Street character at the center of an unlikely sex scandal. The Nov. 21 resignation of Elmo creator and puppeteer Kevin Clash, 52, amid allegations of sexual relationships with teen boys, comes at the start of the holiday toy-buying season -- bad news for Hasbro, which on Oct. 1 introduced the Playskool Sesame Street LOL Elmo. Jim Silver of toy website TimetoPlayMag.com estimates Hasbro's deal with Sesame Workshop to be worth $150 million in annual sales, of which Elmo accounts for more than 75 percent. But Silver predicts the "overwhelming majority" of parents will continue to buy Elmo, and Sean Windle of IBISWorld Inc. points to the strength of Hasbro stock. "Clash is more disconnected from the character than, say, Pee-wee Herman was from Paul Reubens after his 1991 arrest," says Windle. Hasbro is standing by its furry monster, telling THR, "We are confident that Elmo will remain an integral part of Sesame Street."