toxic labels: Tainted Toys Get Another Turn

[Guest guest]

[Toy]Spin Master Ltd.

Spin Master is marketing the Pixos toy, a new version of Aqua Dots,

which was recalled last November.

- - - -

Tainted Toys Get Another Turn

After Last Year's Recalls, Spin Master and Mega Brands Try Again With

New Look

By NICHOLAS CASEY

http://online.wsj.com/article/SB122541224721086433.html

More than 20 million toys were recalled last year because of problems

ranging from toxic lead paint to magnets that were lethal when

swallowed. The toy industry has since spent an estimated $200 million to

enhance safety procedures. Congress overhauled the Consumer Product

Safety Commission, increasing its budget by almost a third.

But what couldn't be repaired were the reputations of the tainted

brands. That left toy makers with a difficult choice: abandon the

products and start new lines from scratch, or relaunch the toys with new

names.

Hit toys are rare in the industry and companies -- operating under tight

margins -- are under pressure to keep a trendy product alive. But the

stigma of a large recall can potentially sink both a toy and its

manufacturer. " When a brand gets tainted, you have to either

aggressively fight it or pull the plug, " says Sid Kaufman, a licensing

executive at Los Angeles-based consulting firm Brand Sense Partners who

has also worked in the toy industry.

" These guys are fighting for their lives as companies and for their

credibility with retailers and consumers, " says Mr. Kaufman.

Last year's recalls were part of a cascade of defective consumer

products made in China. The toy that was marketed under the names Aqua

Dots and Bindeez suffered some of the worst headlines and was recalled

after several children in the U.S. and Australia swallowed large numbers

of the beads and slipped into comas.

The toy contained a substance that when digested became GHB, an acid

more colloquially known as a date-rape drug for its use in sexual

assaults. Spin Master says a Chinese factory failed to use a nontoxic

chemical. The company recalled 4.2 million units and destroyed remaining

products.

Spin Master President and Co-Chief Executive Anton Rabie says the

company's recalls were swift and that his company worked around the

clock to warn consumers and retailers of the problems.

But some damage was already done. " It was one of the worst recalls of

the year, " says Gerald L. Storch, chairman and chief executive of Toys

" R " Us Inc., which sold Aqua Dots. " When you find out a product has the

date-rape drug, that's not a good day. "

Spin Master considered retiring the toy, says Mark Sullivan, who heads

the company's marketing and design. But Spin Master " had invested

millions of dollars in product development, manufacturing and TV

commercials " for Aqua Dots and " customers were saying they love the toy. "

So the company abandoned the Aqua Dots name but not the toy. " We're not

trying to fool anyone, " says Mr. Sullivan. By calling the toy Pixos, he

says, the company isn't just rebranding it, but also allowing parents to

distinguish the new product from the old, dangerous one. To save costs,

Spin Master even repurposed old commercials for this year, replacing the

Aqua Dots jingle with a riff that goes " p-p-p-Pixos! "

Not all brands can be so easily retooled. & Friends, the toy

train line made by Oak Brook, Ill., company RC2 Corp., was recalled for

containing lead paint last year. But the brand, which is owned by

Hit Entertainment Ltd., appears not just in toys but branded books,

puzzles and its namesake television show. The brand was largely

unchanged this year.

Likewise, toys using cartoon characters Dora the Explorer and Sarge, the

animated military jeep from the Walt Disney Co. movie " Cars, " both

involved in lead recalls from Mattel Inc., haven't been given a facelift

by their license owners.

However, some smaller toy companies with lesser-known brands are trying

to reinvent themselves. On many toy aisles this fall is a new

construction toy called MagNext -- a close relative of a product called

Magnetix, manufactured by Mega Brands Inc. of Toronto.

Magnetix was recalled in 2006 when a child died and others were

seriously injured after swallowing its high-powered magnets. Mega Brands

redesigned the toy in 2007 so the magnets couldn't be swallowed.

But when Mattel recalled 18 million toys last year for a similar

problem, the company was thrust back in the spotlight, Mr. Chizick said.

Sales plummeted in the fall and the company posted a loss.

Mega Brands had already been working on a newer, sturdier version of the

toy, and so it decided to release it under a new name, Mr. Chizick said.

" We needed to rebrand, " he said. " Obviously, with the recalls and what

was happening in the marketplace, we changed the name to MagNext. "

The new toys contain no reference to the original. Instead, the company

opted to mark their packaging with the brand Mega Bloks, the company's

building-blocks brand that had no previous association with its magnet toys.

Also new on the toys' packaging is a logo for Intertek, a third-party

testing agency that reviewed the design of the toys for safety before

they were manufactured.

Write to Casey at nicholas.casey@...

..