Neurosmith’s musical edu-toy line is getting a second chance at retail this year under the watchful eye of its new owner, Small World Kids. Although the innovative product range developed by a team of educational software experts generated buzz when it first launched in 1997, Neurosmith was unable to meet shipping deadlines, and the company eventually folded.

After picking up the assets for US$800,000 a year ago, L.A.’s Small World re-engineered eight of the original 20 products, streamlining the manufacturing process and making it more cost-effective by bringing down the US$13 pricetag on chips powering items such as the Touch and Sing Blocks.

To maintain a high degree of innovation, which sets the line apart at market, Small World has brought aboard inventor Andy Rifkin, a former Mattel R&D exec. The company will roll out five new products this fall – including a Together Tunes line of electronic books, featuring soft pages that play songs when kids press their pictures – and 12 to 15 more new SKUs are due out in January.

‘Retailers loved the product and were disappointed when Neurosmith stopped shipping,’ says CEO Debra Fine. ‘The very first day [we made the line available again,] we had about 1,000 orders.’ She adds that Small World was able to leverage its manufacturing base in China to significantly increase the margins.

Founded as a public company in May 2004, Small World Kids has also recently absorbed preschool toy manufacturer Imagiix and plans to pick up one more toyco within the next four months. Fine says this is only the first phase in a strategy that will grow the company beyond its preschool roots into outdoor sports and activities, games and room décor products that target all the way up to tweens.

On the global stage, Small World recently signed distributors in seven new countries, including France, the U.K., China and Australia, and the goal is to grow its international business from 2% of total sales in fiscal 2005 to between 10% and 15% in ’06. ‘We’re finding that there’s a lot more activity in these countries, particularly for U.S. products,’ Fine says. ‘With the Euro so strong against the dollar, it’s like consumers there are getting a 30% discount.’