• by Sarah Mahoney  @mahoney_sarah, February 1, 2011

With the kickoff of Toy Fair just weeks away, the NPD Group says toy sales are bouncing back. The Port Washington, N.Y.-based market research company reports that stronger sales in the all-important fourth quarter -- and the standout performance of plush toys, in particular -- pushed U.S. sales to $21.87 billion last year, a 2% gain over 2009's $21.46 billion. And in the fourth quarter, sales increased 3% to $10.2 billion, representing close to half of the year-end total. In December, sales jumped 4% to $5.64 billion, a 4 percent increase over December 2009.

It was a cuddly year, with plush toys scoring the biggest category gain, up 18%. Sales of building sets climbed 13, outdoor and sports toys rose 9% and dolls and infant/preschool toys grew by 6% for the year.

Losers included youth electronics, which nosedived 22%; action figures, dropping 15%, and games and puzzles, declining 9%.

By channel, online sales had the best year, up 22%. Sales of toys at food and drug stores advanced 6%, and at toy stores, 4%. Department stores were far less popular for toy shoppers, with sales sinking 11%, while toy sales at mass merchants and discounters, such as Target and Walmart, slipped 2%.

Best sellers, ranked by dollar sales, include Barbie, Crayola, Nerf, Star Wars, and Toy Story. Among licensed toys, which accounted for 25% of toy sales last year, the big winners were Cars: The Movie, Disney Princess, Star Wars, Thomas and Friends, and Toy Story.

"Looking forward to 2011, there is much optimism coming off the strong holiday performance for toys," says Anita Frazier, NPD's industry analyst, in a release. "From our KIDS tracker, we know that toys is one of the top categories kids are spending their holiday gift cards on. With an improving economy, several movie releases, and a wide array of innovative product coming to market, 2011 looks to be another solid year for toy sales."

The Toy Industry Association is also upbeat, and reports that attendance at the annual Toy Fair is projected to be up, including a 5% increase in members, a 6% jump in non-U.S. buyers scheduled to come to the show, and a 5% rise in exhibit space.