Recalls may impact toy sales this Christmas

Rick Wagner • Nov 18, 2007 at 12:00 AM

KINGSPORT — Could this year’s highly publicized toy recalls turn into the Grinch Who Stole Christmas?

As the holiday buying season approaches an ever-growing list of toys have been recalled, and that means the grinning green Grinch won’t get the chance to take some presents from under the tree because they’re already gone.

Millions of toys from Mattel Corp., subsidiary Fisher-Price, Hasbro Corp., RC2 Corp. and others have been affected most among the 80 percent of U.S.-sold toys that are made in China.

Reasons for recalls range from highly publicized lead paint, which can cause brain and nerve damage, to having magnets and other smaller parts that are a choking hazard or that can link up in the intestinal tract and cause infections and perforations.

General choking hazards also can prompt recalls.

Parents and others in the market for toys for toddlers and young children are faced with a myriad of Web sites and recall lists.

A simple Google Internet search made last Thursday for “recalled toys” got almost 1.5 million results.

The U.S. Consumer Product Safety Commission’s Web site www.cpsc.gov, has a list of recalled toys.

And a spokeswoman for the Toy Industry Association in New York said the association’s www.toyinfo.org was a good source for information on recalled toys.

Recalls could shift Christmas toy shopping patterns

“I believe it’s going to have a lot of effect,” David Pfountz, manager of the Wal-Mart on Fort Henry Drive in Kingsport, said of the recalls.

He said people may shift money they normally spend on toys for children to clothing and electronics, including the already hot video games and accessories.

“We’ve not seen an increase in toy sales. It’s not a decrease,” Pfountz said. “We’re having a big increase in electronics and clothing.”

Another issue affecting toy sales is the lack of a run-away hit in toys like the Wii video game system from Nintendo has been in gaming or the Tickle Me Elmo once was for Mattel.

“There’s really not one hot toy this year,” Pfountz said.

He said one that has sold out is a cat that meows and moves in response to petting, part of a line called Fur Real. The company also sells other animals.

A new T.M.X. Tickle Me Elmo was released Thursday — it can hiccup — but Pfountz said it remains to be seen if Elmo can help rescue Christmas toy sales.

The Wii video game consoles are in short supply nationwide. Pfountz said limited Wii shipments arrive sporadically.

Linda Bolton Weiser, a toy analyst with Oppenheimer & Co. Inc. in New York, Monday declined an interview involving toy recalls, saying the issue had received too much attention and wasn’t going to be a major impact on toy sales this year.

“No one really wants to hear it at Christmas time, but it’s (the toy recall situation) a mess,” said Stephanie Oppenheim of the Oppenheim Toy Portfolio, not associated with Oppenheimer & Co.

Pfountz and other toy retailers said they and their companies are careful to pull recalled toys off the shelves as soon as the recalls hit.

In some cases, he said, a whole family of toys is pulled temporarily even if just one item was recalled. An example are the Cars toys based on the popular movie, although he said only one vehicle was found to have lead problems. The rest are back on the shelves.

Eric Johnson, professor of operations management at Dartmouth’s Tuck School of Business, predicted in October that toy prices will increase by 10 percent next year because of increased costs of testing toys and of possible shifts of production from China to Europe or the United States.

Chris Bynre, a toy analyst from New York, agreed that the cost of toys likely will be higher this time next year, but he disagreed on the reasons. He said major U.S. retailers like Wal-Mart have held toy prices down for the past few years but that increasing petroleum prices, pressure to increase wages in China and currency exchange rates will increase toy prices because petroleum is needed to make plastics.

However, he said most toys will continue to be made in China because of economics and that it would not be reasonable to make large quantities of plastic toys in the United States because, among other things, the supply chain, other infrastructure and the employee base simply don’t exist here.

“If you want to pay $75 for a Barbie, go ahead,” Byrne said of Mattel’s iconic offering that has not been subject to recall this year, but is among the 80 percent of U.S.-sold toys made in China. “If you have a child of a certain age, the only country of origin they care about is the North Pole.”

‘Hot Dozen’ and ‘Lead Free’

As for this holiday season, hopes are high in toy retail that the recalls won’t dampen 2007 holiday sales, and the usual lists of top toys have made the rounds — although often amended after release to remove recalled toys.

Toy Wishes Magazine, with the help of veteran toy analysts Byrne and Jim Siler, released its annual “Hot Dozen” for toys for the holiday season.

November and December account for about two-thirds of U.S toy sales, which in 2006 totaled about $22 billion, with video games and accessories accounting for another $10 to $13 billion.

“Mattel has already took the hit in the third quarter,” Byrne said. “I don’t really see a huge impact on this issue.”

On the other hand, Oppenheim Toy Portfolio 2008 Lead Free Platinum Awards were recently announced by Stephanie Oppenheim, a child development expert, and her mother, author Joanne Oppenheim.

They have been independent toy analysts since 1989 but because of the recalls did not publish an annual book for the first time in 15 years.

Oppenheim said that during the RC2 Thomas train recall, one lead-tainted toy lead to another, she said.

“The present they sent kids (after the recall) had lead in it and they had to recall that, too,” Oppenheim said.

The Oppenheim list of lead-free toys, including those free of imbedded lead, and from the phthalates used to soften plastics, is at www.toyportfolio.com.

She said home testing for lead is not reliable, and the portfolio is pushing for federal or at least more state regulations. Illinois bans imbedded lead and California bans phthalates.

An Ohio television station’s investigation last week found recalled toys still on store shelves there, although all but one — a “Sarge” toy from the movie cars — were flagged at checkout and not sold. It also found lead in toys not on recall lists.

The Oppenheim Web site has a list of myths, including that purchasing at big box retailers avoids recalls, and that plush stuffed animals are safe since some, including a Curious George monkey, were painted with lead paint.

Asked for hottest sellers, Byrne cited anything in the High School Musical or Hanna Montana lines licensed by Disney.

“Anything Hanna Montana will sell out this year,” Byrne said.

In alphabetical order, the magazine’s top 12 are:

• Barbie and the 12 Dancing Princesses by Mattel. Barbie is Princess Genevieve, the seventh of 12 sisters in a magical world. The dolls sell for $24.99, the horse and carriage for $32.99.

• Bratz Forever Diamond by By MGA Entertainment. The latest Bratz fashion dolls have outfits with sparkling diamond-like stones, and each doll comes with a real diamond pendant that girls can wear. The retail price is $29.99.

• Butterscotch My Fur Real Friends Pony by Hasbro. A life-size, interactive pony with advanced animatronic technology supplies realistic movements and sounds. The retail price is $299.99.

• Digi Makeover by Radica Games Ltd. A plug-and-play gadget plugs into the television. Kids take their picture and digitally enhance the image by adding makeup, hairstyles and accessories. It sells for $59.99.

• Fly Wheels XPV by Jakks Pactif Inc. This radio-controlled vehicle flies through the air. It takes off and lands from any hard surface and can soar more than 20 stories into the air. The retail price is $59.99.

• Kid Tough Digital Camera by Mattel unit Fisher-Price. Made for kids, it comes with dual hand grips, binocular view finder and sturdy construction. The built-in 1.3-inch LCD screen holds up to 60 pictures, includes big buttons and simple controls, and has a USB-computer connection for downloading photos. It sells for $69.99.

• Lego Mindstorms NXT by Lego. A robotics toolset is the NXT brick — a "brain" that is the tech center of every creation. Using motors, ports and technologies like Bluetooth, this set uses light, sound and touch sensors to make advanced robots. It sells for $249.99.

• Magtastik by Mega Brands. A brightly colored magnetic building set. The retail price for a starter set is $29.99, with individual sets $5.99 and up.

• Monopoly Here & Now by Hasbro. A limited-edition remake of the classic game, the new version revamps Monopoly as if it were invented today. Buy and sell at today's prices and move playing pieces that are iconic structures. Properties include Times Square, Rodeo Drive and other landmarks, while the railroads become airports. The retail price is $29.99.

• Speed Stacks Stackpack by Play Along. A sports toy that involves kids stacking and restacking specially designed cups in precise formations. The retail price is $39.99.

• T.M.X. Elmo by Fisher-Price. This is the latest version of the popular Elmo franchise known for dancing and giggling. Elmo still drops to the floor in paroxysms of hysterical, limb-flailing laughter, but the new version for this Christmas hiccups. The retail price is $39.99.

• And Wii by Nintendo Co. A video-gaming platform with a two-handed controller puts players at the center of the experience. The retail price is $250, although it is in short supply at retailers. Secondary market sales on eBay can range from $300 to $500 and a www.walmart.com package including games and accessories is almost $700.

Byrne said that limits on computer chip production are slowing Wii deliveries, predicting supply won’t catch up to demand until the first or second quarter of 2008.

The Wii made last year’s Oppenheim list because, Oppenheim said, it gets children up off the couch and active. She said others include retro offerings such as the Inch Worm by Radio Flyer and a new Candyland Castle game by Hasbro. She doesn’t like the new Monopoly because it’s large money amounts require a calculator and take away opportunities for impromptu math lessons.

What to do, what not to do

Most manufacturers and some retailers will take recalled toys in and give vouchers or refunds or provide a new part or component to make the toy safe.

Disposing of recalled toys can present a problem, especially if they contain lead because in theory toys buried in landfills could leach lead into the groundwater.

And some reports from across the country indicate some people may be donating recalled toys to charities or thift stores.

Most makers request that lead-contaminated toys be returned, but Oppenheim said it is confusing for consumers because some request the toys go back to stores while others ask for returns to the manufacturers.

She said consumers should push for tighter toy testing regulations. And she also said that toy buyers should realize that much of the recent flood of toy recalls was brought about by tighter testing demanded by retailers.

To look for recalled toys, consumers may go to the U.S. Consumer Product Safety Commission’s Web site, as well as to the Web sites of individual retailers and toy makers such as KB Toys, Toys R U, Mattel and Hasbro.

Internet searches using the name of the toy also can pinpoint recalls. Also, many retailers, including Big Lots, will post toy recall information in their stores.

Also on the Web:

• American Speciality Toy Retail Association: www.astratoy.org

• KB Toys: www.etyoys.com/safety

• Mattel: www.mattel.com/safety

• Toys R Us: www.toysrus.com/safety

• Hasbro: www.hasbro.com

• RC2: www.rc2.com

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