Recalls threaten holiday toy sales

Toy retailers offer more
discounts as toy recalls mount.

NEW YORK (AP) — Lead on toys was bad enough, but last week’s recall of a toy tainted with a date rape drug threatens to turn into a lump of coal for toy retailers just as the key holiday selling season gets started.

The recall of Aqua Dots comes just as the industry was starting to see shoppers return to toy stores after summer’s high-profile recalls of more than 21 million Chinese-made toys with high levels of lead or dangerous magnets.

Aqua Dots, distributed by Spin Master Ltd. in the U.S. but made in China, was on many retailers’ hot toy lists, and there are very few substitutes, retail executives say.

Reports of children knocked unconscious after swallowing the tiny colorful beads set off a whole new level of worry among parents.

The good news for shoppers is that they’re being bombarded with free shipping offers and fat discounts as rivals such as Wal-Mart Stores Inc. and Toys “R” Us try to outdo one another and draw reticent consumers. Most of the discounting had been planned, but at least one toy retailer — eToys.com — added a free shipping offer after a disappointing October.

The Aqua Dot recall is “scarier than all the others,” said Stacey Ryan, of New Providence, N.J., who planned to buy Aqua Dots for her 3-year-old daughter, Shannon. The summer recalls had already made her cautious about buying toys for Shannon and her 2-year-old sister, Bridget. But she reasoned, what could be worse than them swallowing the Aqua Dots? Little did she know that the beads were coated with a toxic chemical that metabolizes into gamma hydroxy butyrate or GHB — the so-called date rape drug.

Now, Ryan is focusing on bigger toys such as baby dolls and stuffed animals — items her children can’t swallow. “If it looks like a piece of fruit or a snack, I just won’t buy it,” she said.

“I really don’t understand how a toy like that can have something like that put into it,” said Colleen Scanlan, from Sun Prairie, Wis., who is trying to find a replacement for Aqua Dots for her daughters, ages 5 and 8. “They’ve been asking for it for about a year, so that one will be a big disappointment.”

Though many toy merchants say so far shoppers largely have not been rejecting Chinese-made toys — which make up 80 percent of U.S. playthings — they are being choosier. A poll done last month by Harris Interactive showed that one-third of Americans say they will be buying fewer toys this holiday season because of safety concerns, and 45 percent said they will avoid buying toys made in China.

What effect the souring economy will have on sales is also still unclear. Consumers are wary, but even the most frugal parent will buy some children’s toys come the holidays.

Target Corp. has said that its toy business has been “soft” this fall, while eToys.com’s CEO Michael Wagner reported that October sales were weaker than expected. Amazon.com said it’s been pleased with its toy business; many others declined to comment, saying that the bulk of holiday sales is yet to come.

The industry is worried that parents’ frugality could derail holiday sales, which showed a meager increase last year after several years of declines. Toy sales were up 0.2 percent last year, according to the NPD Group Inc., a research company based in Port Washington, N.Y.

Already, aggressive price cutting has begun. Wal-Mart kicked off in early October, at least a week earlier than a year ago. Over the Nov. 2-4 weekend, Wal-Mart, Toys “R” Us and K-B Toys Inc. wooed shoppers with weekend discounts and door buster specials similar to what they would offer on the day after Thanksgiving.