Toy recalls could be boon to some brands

NEW YORK - Playthings made by brands such as Playskool, Brio and GeoMag of Switzerland could get a boost in the fast-approaching holiday sales season because they haven't been caught up in high-profile recalls over lead paint, dangerous magnets, or other safety concerns.

Parents, who may snub Fisher-Price toys, Barbie dollhouses and Mega Brands' Magnetix that have been the subject of recent recalls, will want alternatives for their children, experts say.

"Winners who could capture the movement toward safe and friendly toys will see stronger holiday sales," said Eric Johnson, professor of operations management at Dartmouth's Tuck School of Business.

Among the most vulnerable brands, Johnson said, is Mattel Inc.'s Fisher-Price Inc. The preschool label had built a reputation among parents for carefulness, but has been swept up in two of Mattel's three high-profile recalls of toys made in China and tainted with lead paint. The latest came Tuesday.

"I think direct competitors will benefit," added Johnson, citing names such as the Little Tikes Co. and Hasbro Inc.'s Playskool.

Consumers already are thinking about changing their holiday buying strategies.

"I would rather pay more for toys that are safe than less for toys that are not safe," said Yi Chen, a Chicago pathologist who has three daughters, ages 18, 4, and 1 month.

Chen said she did not plan to shop less, just more carefully, watching out for toys with paint and toys made of plastic. And she said she did not plan to buy anything from Fisher-Price and wished products coming from overseas were better regulated.

"Especially the plastic toys for the little babies," she said. "They put them in their mouth."

Steve Barnard of Indianapolis, who was shopping Wednesday at a Toys R Us store, said he would not rule out brands that were subject to recalls, but would look closely at labels when he shops for holiday presents for his sons, ages 6 and 9.

He said he would look for toys made in the United States. He also may look for toys with no paint or possibly wooden toys from Europe.

Mattel is not the only company under scrutiny. RC2 Corp., which in June voluntarily recalled 1.5 million wooden railroad toys and parts from its Thomas & Friends Wooden Railway product line because of lead paint, could also be hurt this holiday season. Mega Brands Inc., whose recall of its Magnetix toys was expanded in April because of dangerous tiny magnets, also has been dealt a blow.

It is a headache for manufacturers and retailers alike with the holidays just months away. More than 80 percent of toys sold in U.S. stores are made in China, which has been blamed for most of the safety problems that triggered the recalls.

Retailers placed the bulk of their orders months ago and are scrambling now to make adjustments.

Wal-Mart Stores Inc. has given half its magnetic construction space to GeoMag of Switzerland, a blow for Magnetix, according to Gerrick Johnson, an analyst at BMO Capital Markets.

Toys R Us Inc., meanwhile, is looking at ways to expand its assortment of U.S.-made toys and is increasing its assortment of eco-friendly products. Though most of its holiday orders are in place, the company is offering more European brands, such as Brio A.B., known for wooden trains.

Stores and toy-makers are also adjusting their marketing efforts amid parents' concerns about Chinese-made products.

Little Tikes, acquired last November by MGA Entertainment Inc., the maker of Bratz dolls, will be highlighting its American heritage on bigger labels starting in November, according to chief executive officer Isaac Larian.

He believes that Little Tikes could pick up some market share from Fisher-Price. He also thinks that its Bratz dolls, which are made in China, but have not been caught up in any recalls, could get a boost if parents shy away from Barbie products after the recall of some Barbie accessories. Barbie dolls were not included in Mattel's recall Tuesday.

In March, Little Tikes recalled about 20,800 dinosaur and doggie flashlights because of lead paint, but Larian said that was before his company owned the brand. About 70 percent of Little Tikes' products are made in the United States.