The Associated Press reports that another batch of killer toys from China is being recalled. On Wednesday, toys and children's necklaces made in China were recalled, including five more items from the popular Thomas & Friends Wooden Railway product line, because they contain dangerous levels of lead.
Here are the details:
23,500 more necklaces, bracelets and pendants imported by TOBY N.Y.C. of New York;
850 children's Spinning Wheel Necklace necklaces, produced by Rhode Island Novelty of Cumberland, RI;
350,000 Happy Giddy Gardening Tools and Children's Sunny Patch Chairs, imported by Target Corp. (NYSE: TGT) of Minneapolis, MN;.
200,000 Thomas and Friends Wood Railway Toys and 800 Britain's "Knights of the Sword" series toys, distributed by RC2 Corp. (NASDAQ: RCRC) of Oak Brook, IL
16,000 children's toy rakes imported by Jo-Ann Stores Inc. (NYSE: JAS) of Hudson, OH.
10,000 Floor Puppet Theaters produced by Guidecraft Inc., of Englewood, NJ.
The news over the past few months has been filled with stories of toy recalls. With more than three million toys manufactured in China already recalled due to dangerous lead paint, the entire industry has been forced to increase its safety standards, and sooner or later the added costs are going filter down to toy prices.
So far, consumers have not had to foot the bill for the added safety measures, but according to analysts, that is all going to change after this year's busy holiday shopping season. Starting next year, it is estimated that toy prices could jump as much as 10%, making it the largest one-time jump in several years. Toys are not going to be the only consumer items that will be hit with rising costs. Other imports from China of fish and children's apparel are also going to be susceptible to increases.
It poses the question -- how much is your child's safety worth? I think the answer to this question is rather obvious; it is worth whatever it takes to ensure that the products are safe for the little ones to play with. While there is undoubtedly going to be many upset shoppers out there, I, for one, believe the added costs are immaterial when the safety of children is at stake.
After Mattel (NYSE: MAT) announced its first huge lead-based paint recall spanning dozens of my children's favorite toys, from Diego to Elmo (how could you?), my initial response was something along the lines of: no more Chinese toys, ever! After the second recall, largely focused on Polly Pocket dolls (I have boys but still, Polly Pocket is hard to resist) and choking hazards, I went even further and darkly considered removing the plastics from my family's consumption altogether -- more than one friend made that decision, too, putting plastic toys and Tupperware in garbage bags and divesting entirely.
Late last night, Mattel announced yet another recall, this one not quite so big as the others and focused largely on small parts of Barbie accessories -- the dog from the Barbie Dream Puppy House; the cat from the Barbie Dream Kitty Condo; the dog and dinner plates from the table and chairs kitchen playset -- as well as a few toddler toys, two GeoTrax trains and the lid from a bongo drum in a Big, Big World playset. And I? Had almost no reaction. I didn't frantically root through my children's toy boxes, searching for toxic toys. I didn't email all my friends, using a subject line with several exclamation points. I didn't call my pediatrician's office to schedule a blood lead test (ok, so I've already done that). Mattel, I've decided, isn't the bad guy here; nor am I quite as angry at China (even though I'll admit to a greatly heightened blood pressure when I heard that a Chinese government official objected to lead limits in children's jewelry).
The thing is, while I've decided to severely limit my consumption of plastic children's toys, this isn't about them anymore.
Investors in Mattel (NYSE: MAT) can no longer afford to sleep at night. They need to watch for news from China about the next recall of some defective product.
This time it is 775,000 toys with excessive amounts of lead paint. According toThe Wall Street Journal the news will be announced tomorrow jointly by the company and the Consumer Product Safety Commission. The CPSC has been highly critical of Mattel for not reporting dangerous defects in a timely fashion. Mattel management is probably wise not to embarrass the federal government in the midst of all its recall problems.
The recalls have to be made. There is clearly no other choice. But, it does continue to raise the question of who is minding the quality control store at the big toy company. It must be someone other than the company management.
Every time investors turn around, things get worse at Mattel (NYSE: MAT). The Wall Street Journal (subscription required) reports that the federal Consumer Product Safety Commission requires companies to "report all claims of potentially hazardous product defects within 24 hours." Mattel apparently has not been doing that. The company took several months to review data on the nearly 18 million play sets that it recalled last month.
The CPSC says that it has had about enough of Mattel's behavior. The commissions chairperson calls Mattel's approach "fallacious and wrongheaded."
Although the commission is fairly small and cannot handle all of the cases that it should, it is astonishing that Mattel would makes its position with consumers worse by adopting a stance that might be viewed as irresponsible.
Wal-Mart Stores, Inc. (NYSE: WMT) is not resting on the recent bad news that millions of defective toys from Mattel, Inc. (NYSE: MAT) and Fisher Price were sold in its stores. As such, the world's largest retailer has now said that it will re-examine safety reviews from designers and manufacturers of the toys, as well as increase the independent testing it performs on the toys.
This is a good move for Wal-Mart, and if any retailer does not follow suit and create some kind of program to put toys it carries through rigorous testing as well, then it probably does not deserve your business. It's true that toy makers should have already eliminated problems with toys that led to recalls, but retailers are the last bastion before those products reach consumers. Think about it this way: are you a Wal-Mart customer or Mattel customer? My guess is that you answered Wal-Mart, and that fact makes the retailer in need of a review process for toy items it stocks on its shelves.
The toy recall that is still gripping the attention of parents inside and outside the U.S. has brought even more scrutiny onto the problem of quality control on products made in China. Due to several high-profile food-related recalls this year (including a toothpaste and pet food recall) the Chinese supply chain was already well under fire. Additionally, some parents have indicated that they blame the companies that distributed the toys as much as they blame the Chinese manufacturers who made them.
Who is stepping in to provide damage control? Why, retailers of course. The stores that are most directly affected by parents' disinclination to buy toys right now are already deep in the game this week. Companies such as Amazon.com (NASDAQ: AMZN), eToys.com and the online division of Wal-Mart Stores, Inc. (NYSE: WMT) -- Walmart.com -- have all been communicating with online customers via email about how to take the guesswork out of product recalls. In other words, providing lists of what is and isn't on the recall list, and how to properly dispose of those toys that are being recalled. It's a great strategy to retain customers and put yourself ahead of the perceived "non-caring" retailers.
Me. A mom. Presumably the sort of human being who'd be up in arms with outrage over this latest bit of recall news. Instead, I'm rolling my eyes and wondering what's really behind all this recall madness. Is it a slow news week? (not with all the fun we're having with world's credit market meltdown!). Terrorists out to kill our children via poisonous toys? Or is is just our hysteria over China eating our lunch. The lunch we happily sent over to them.
I think it's probably the latter. And that's not to say I have any doubt over whether China is turning out mountains of subpar crap for us. Standards are different over there, after all. And at the end of the day, everyone gets what they pay for, right, Mattel (NYSE: MAT)?
I'm just starting to find it suspect that every day brings new screaming headlines about more poisonous, sub-par products being sent to us from China. Toxic toothpaste! Poisoned pet food! Lead-coated toys! Now it's killer bibs!
It's been a few weeks since Mattel, Inc. (NYSE: MAT) announced a million-toy recall, and the dust is far from settled. The Chinese supplier that supplied paint for a huge collection of children's toys has seen its CEO commit suicide and parents are still under the gun on which exact toys to trust their kids with. The problem is lead-based paint, which can lead to health complications. Outside of the normal "small parts" recall fiascos that seem to happen every year, the lead paint issue is a big one. Young kids put everything in their mouths.
This week, Mattel has -- once again -- urged parents to withhold many of its toys from all those curious kids. When a toy manufacturer directly tells customers to not use its products, something is amiss, of course. With more than 19 million toys worldwide under scrutiny, how did this problem become so large before being detected?
Quality control in China -- with raw materials and product manufacturers -- has slid far, far downhill. Retailers carrying items from multiple Chinese-based recalls may be feeling the backlash, and the American consumer is probably going to demand better in the near future. In other words, if "low prices" means "horrible quality," where does that leave discounters like Wal-Mart Stores, Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT)? With plummeting toy sales, most likely. Is that priced into the stock of either retailer? Probably not.
For the second time in as many weeks, Mattel Inc. (NYSE: MAT) has issued a recall of Chinese-manufactured toys thanks to the use of lead paint. If ingested, lead paint can lead to illness or developmental problems. The latest recall impacts 7.3 million play sets, including Batman action figures and the latest, disturbingly large (at least, since my childhood) incarnation of Polly Pocket dolls. Additionally, 1.5 million die-cast metal cars are going to be pulled off the shelves.
According to a statement from Nancy A. Nord, acting chairman of the Consumer Product Safety Commission: "The scope of these recalls is intentionally large to prevent any injuries from occurring."
As BloggingStocks' Brent Archer noted earlier today, it is "hard to imagine this stock going up by too much over the next few months." With 80% of all toys sold worldwide made in China, one has to wonder if this is merely the latest in a line of recalls set to come down the pipeline, but one also has to wonder if further complications are already being factored into the shares.
Earlier this month, Mattel Inc. (NYSE: MAT) was forced to recall 967,000 toys produced in China due to high levels of lead in the paint used on the toys. This was just another in a string of recent product recalls involving Chinese products, but the end result is a sad story, as Zhang Shuhong, who co-owned Lee Der Industrial Co. Ltd., which manufactured the recalled toys, took his own life at the company's warehouse over the weekend.
According to reports, Shuhong hung himself this past Saturday. Earlier in the day he had greeted workers and briefly talked with some of them before taking his own life later in the day.
One of the company's managers, Liu, said that Zhang Shuhong was fooled into using the harmful paint and had bought the bad paint from one of his best friends. While all reports that I have seen have all stated that Mr. Shuhong did not willingly use harmful products in the company's toys, the damage was done, and the company has been placed under a temporary export ban of its goods.
Go to leading toy designer, manufacturer and marketer Mattel Inc.'s (NYSE: MAT) website, and you're greeted with its slogan in bold letters: "The World's Mattel: Premier Toy Brands, Today and Tomorrow." With popular name brand toys ranging from Barbie and Hot Wheels to American Girl and Barney, that claim is no exaggeration.
But the behemoth brand has taken a hit this past week. If you've been reading headlines, you likely have seen the bad news for Mattel -- it is recalling 1.5 million of its Fisher-Price toys due to lead paint concerns. With this, Mattel joins a long list of big businesses being burnt by shoddy manufacturing and factory oversight problems in China.
Certainly, it isn't just a case of tainted toys, but now a tainted brand. If you're a parent, you pay special notice to news like this, and it is not something you take lightly. As a parent myself, I know that with everything involving my child, I err on the side of safety and caution. Mattel knows this, and it has announced that it is immediately addressing the problem and will go overboard to ensure it doesn't happen again, but I still might think twice when I am at the toy store next time.
The recall, the second-largest this year involving toys, involves 83 different products made from April 19 through July 6. Toy characters parents (and their pre-school children) will certainly recognize include Elmo, Dora the Explorer, and her pal Diego.
The U.S. Consumer Product Safety Commission has a full list of the recalled toys here.
Mattel's (NYSE: MAT) Fisher division is recalling about a million toys. The products contain (subscription required) high levels of lead.
Oh, and the products were made in China. Mattel says it did not catch the problem earlier because they were made by a "trusted" manufacturer.
Most of the toys have not been shipped from warehouses.
Mattel's problems raise the issue of whether US companies are going to have to spend increasing sums of money to audit Chinese manufacturing processes and inspect products from that country as they come to the US market. The current recall is part of an emerging epidemic of serious concerns about items manufactured in the world's most populated country.
That brings up the P&L question of whether out-sourcing manufacturing to Chinese companies is really less expensive over time. If Chinese work quality is too low for most US companies. the cost of monitoring and inspecting these products could sky-rocket. And, this could off-set the advantage of China's cheap labor force.
Made in China may come to mean too much cost and too much risk for many US firms.
The news over the past few months has been filled with stories of toy recalls. With more than three million toys manufactured in China already recalled due to dangerous lead paint, the entire industry has been forced to increase its safety standards, and sooner or later the 
After 
Every time investors turn around, things get worse at 
It's been a few weeks since 
For the second time in as many weeks, 
Go to leading toy designer, manufacturer and marketer 
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