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[August 10, 2007]
Toy industry rethinks merchandising, marketing as shoppers look for safe toys
(Associated Press WorldStream Via Thomson Dialog NewsEdge) NEW YORK_When Lisa Landry thinks ahead to holiday shopping for her 9-month-old boy, Ari, her concern isn't which toy is most exciting. It's which is safest.
"I'll be looking for anything that won't harm our child," she says. "It may not be super-fun."
Already crossed off from her shopping list: Toys made in China. The string of recalls of Chinese-made toys has Landry, of New York City, and legions of parents across the country leaning toward toys made elsewhere, including Europe and the United States.
That is creating a huge headache for retailers and toy makers at just about the worst possible time: They made the bulk of their manufacturing and wholesale orders months ago, when most of them envisioned row after row of toys from China on their shelves. More than 80 percent of toys sold in U.S. stores are made in China,
Now they're scrambling to make adjustments for customers who may want something else.
Toys "R" Us Inc. is looking at ways to expand its assortment of American-made toys and is expanding its assortment of organic products, though most of the holiday ordering is in place, according to spokeswoman Kathleen Waugh.
"We just want to be sure that customers are comfortable with our assortment," said Waugh. She said Toys "R" Us is also bringing in more European brands like Brio, a move that was in place before the string of recalls as part of its goal to differentiate itself from other retailers. But that merchandise strategy should gain more importance, she said.
Waugh confirmed the retailer is pulling a list of its resources that make American-made toys as part of an overall assessment of its assortment.
Brands like Little Tykes and K'Nex, whose products are made in the U.S., will be promoting their American heritage with bigger product labels and advertising campaigns, company executives said.
MGA Entertainment Inc., which has been branching out beyond its popular Bratz dolls and acquired the Little Tykes business last year, is looking to manufacture a new toy line here that will be marketed as an American brand, said CEO Isaac Larian. Bratz dolls are made in China. Larian couldn't specify when the new toy line would come out since the concept is still in its early stages.
In a statement, Laura Phillips, vice president and merchandise manager of toys at Wal-Mart, said she feels confident about current orders, but added, "We always are examining opportunities with suppliers who have capacity for U.S. production and will do so in seasons ahead."
The prospect of a difficult holiday season caps a year in which the $22.3 billion (16.34 billion) toy industry has been shaken by several high-profile recalls of Chinese-made products, from Hasbro Inc.'s faulty Easy Bake Ovens to RC2 Corp.'s Thomas & Friends Wooden Railway wooden toy line, which had lead paint.
The latest _ and considered to be the most damaging this year _ involved the worldwide recall of 1.5 million preschool toys from Fisher-Price, a division of Mattel, the nation's largest toy maker, and included popular Sesame Street and Nickelodeon characters.
The actions are part of a slew of recalls of Chinese-made products that range from faulty tires to poisoned pet food. But with children's lives at stake, the issue becomes extremely emotional, experts say.
How bad is it for toy companies? While most industry groups try to limit government regulation, the Toy Industry Association is working with Congress and the Consumer Product Safety Commission to help establish legislation that will make testing mandatory for all toy products, according to association chairman Dan Grossman.
There is no law now that requires toy testing, although toy makers adhere to voluntary standards and big retailers also do their own testing.
Tighter controls will add more costs to makers, which could result in higher prices at the stores, but a number of parents say they're willing to spend more for a toy if they knew it is safe.
"I would pay up to 50 percent more for something that I knew was well-made and safe," said Amy Lemen, 41, the mother of a five-year-old daughter, Audrey. The Austin, Tex. resident, who didn't have any of the tainted toys, said the latest recall will make her focus more on eco-friendly toys. Lemen may also buy fewer toys this holiday season, investing instead in more experiences such as taking her daughter to Sea World in San Antonio.
For now, toy companies that make their goods in Europe or in the U.S. are clearly benefiting from consumers' worry. Toy experts say that European makers adhere to higher safety standards than in the U.S. And even though European toy makers are shifting some of their production to China, the products are required to be tested before they re-enter the country of origin.
Michael Araten, president of K'Nex Industries, Inc., which produces the namesake brand, known for its plastic construction toys, and is the exclusive distributor for Brio in North America, said that deliveries to stores are up 25 percent in August and he expects a 30 percent increase this holiday season.
One online seller of European wooden toys, Oompa Enterprises Inc. has fielded hundreds of calls from concerned consumers since the Fisher-Price recall, according to CEO Milanie Cleere. She estimates those calls are coming in at about four times the volume they did before the trouble began.
She said she has personally spoken to several callers, including Landry, the mother from New York City, assuring them she carefully tests products her company sells.
Some experts believe the shift of focus from a toy's popularity to its safety could lead to a new, better criteria among parents.
"This is the time consumers have to look at the individual needs of a child _ age, skills and interest _ when buying toys and not just buy what the buzz or hot toylist is about," said Marianne M. Szymanski, publisher of Toytips.com, a toy guide.
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