Baby Yoda, already a hit with audiences, is now becoming iconic to toy lovers as well.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Squishmallows, which have become popular in the aisles of big retail chains like Walgreens (WBA), Target (TGT) and Costco (COST), are squeezable, pillow-like toy creatures. In just 2 years on the market, Kellytoy has sold more than 50 million cuddly characters worldwide.” data-reactid=”17″>Squishmallows, which have become popular in the aisles of big retail chains like Walgreens (WBA), Target (TGT) and Costco (COST), are squeezable, pillow-like toy creatures. In just 2 years on the market, Kellytoy has sold more than 50 million cuddly characters worldwide.

And thanks to the enduring popularity of “Star Wars,” they’re only poised to become an even bigger phenomenon.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“Squishmallows has become the number one toy brand in Costco, throughout the world for the last couple of years,” Kellytoy co-president Jonathan Kelly told Yahoo Finance’s ‘The First Trade’ this week. “We have three items…going into the stores for the fourth quarter.”” data-reactid=”19″>“Squishmallows has become the number one toy brand in Costco, throughout the world for the last couple of years,” Kellytoy co-president Jonathan Kelly told Yahoo Finance’s ‘The First Trade’ this week. “We have three items…going into the stores for the fourth quarter.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Those 3 newcomers are from the hit franchise that began over 40 years ago, and include iconic characters like R2D2, Chewbacca and BB8. Already in stores and flying off the shelves is Baby Yoda from Disney+’s (DIS) hit show, “The Mandalorian.”” data-reactid=”20″>Those 3 newcomers are from the hit franchise that began over 40 years ago, and include iconic characters like R2D2, Chewbacca and BB8. Already in stores and flying off the shelves is Baby Yoda from Disney+’s (DIS) hit show, “The Mandalorian.”

Popular Squishmallow toys from the "Star Wars" franchise.Popular Squishmallow toys from the "Star Wars" franchise.
Popular Squishmallow toys from the “Star Wars” franchise.

The idea for the Squishmallows came from a trip Kelly took to Japan, he saw a similar product and aimed to make it better. 

“We brought the product back, took it apart, and worked over several months trying to develop the softness and the cuteness,” explained Kelly. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The toy’s popularity caught the attention of Alleghany Capital Corp. and its subsidiary, Jazwares, which pushed the company to acquire Kellytoy.&nbsp;” data-reactid=”34″>The toy’s popularity caught the attention of Alleghany Capital Corp. and its subsidiary, Jazwares, which pushed the company to acquire Kellytoy

Kelly says the agreement makes the company stronger, and gives it more opportunity in terms of distribution and getting more licenses that make sense for the brand. The agreement granted Jazwares the global rights to Squishville, an extension of the Squishmallows line.

“You’re going to see the Squishmallows brand expanding, and it’s making an impact at the register,” according to The Toybook’s James Zahn. 

In addition to the new ‘Star Wars’ characters added to the Squishmallow world, it has a Halloween and Holiday line on the way as well. Zahn thinks quite a few might be unwrapped during this holiday season.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Tracey Marx Bernstein is a senior producer for Yahoo Finance’s The First Trade.” data-reactid=”38″>Tracey Marx Bernstein is a senior producer for Yahoo Finance’s The First Trade.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="READ AND WATCH MORE:” data-reactid=”39″>READ AND WATCH MORE:

<h4 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Walmart and Target huge e-commerce gains are a blaring siren to brick-and-mortar retail” data-reactid=”40″>Walmart and Target huge e-commerce gains are a blaring siren to brick-and-mortar retail

<h4 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Here’s why the toy industry will shake off the global pandemic” data-reactid=”41″>Here’s why the toy industry will shake off the global pandemic

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.” data-reactid=”42″>Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.