Toys 'R' Us joins the recall club -- and how you can capitalize

Posted Aug 30th 2007 10:26AM by Zac Bissonnette
Filed under: Consumer Experience, China, Mattel, Inc (MAT)

A month after Mattel's (NYSE: MAT) massive recall of lead-paint contaminated toys, Toys "R" Us is joining the party. The toystore juggernaut is recalling 27,000 Chinese-made paint and crayon sets. The wooden box contains lead, as do some of the paints.

Obviously these toy recalls are bad news for the company's involved -- Mattel and stores that rely heavily on low-cost imported goods. If parents get scared and transition to higher-quality products, these companies will suffer.

That's where 1-800-Flowers.com (NASDAQ: FLWS) comes in. The company also owns HearthSong and Magic Cabin, which could see increased sales if consumers flock to quality. These companies manufacture toys that are more classical and, I would argue, better for kids than a lot of the cheap stuff -- lead paint concerns aside.

The stock has been on a run of late and doesn't look particularly cheap. But the growth in the core flower business, combined with the positive outlook for these subsidiaries, makes it worthy of further investigation.

Click here for Mattel toy recall news

Julie Tilsner: What's under the tree this Christmas season? 'Made in USA' toys
Brian White: Recalled Mattel (MAT) toys found to have 180 times the lead limit
Peter Cohan: Is China hurting Disney's (DIS) reputation?
Sarah Gilbert: Mattel's third toy recall: Parents response ho-hum, could Barbie survive?
Michael Fowlkes: More children's products join the Chinese recall list
Beth Gaston Moon: Mattel (MAT): Looking into the latest recall
Michael Fowlkes: Chinese executive found hanged following Mattel (MAT) toy recalls
Hilary Kramer: Mattel, Inc. (MAT): Buy or sell after recall?
Tom Taulli: Mattel toy recall: Lessons for business owners

Tags: China, FLWS, MAT, Mattel, Toys

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Reader Comments (Page 1 of 1)

8-30-2007 @ 8:58PM

Sambo said...

Enough already!!!!!!!!!!!!!!!! Have we learned our lesson yet here in the great U.S? Get smart and ban any future toys, etc. made in "CHINA". They obviously don't give a rat's ass about our safety or health concerns here in the states. So what is the answer, ban their damn products people!!!!! I guarantee I will CHECK where any future products are made especially toys. If they are made in China, back on the ole' shelf they will go, FOR SURE!!!!!!!!!!!!!!!!!

8-30-2007 @ 10:05PM

topgon said...

I believe that ether we should ban the most Chinese products or require each shipment to be proved safe and the importer should be held liable if the unsafe product gets threw.