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Toys sell despite China concerns

From the Associated Press

new york -- Toy sellers’ fears of a widespread boycott of Chinese-made toys have not taken hold so far, despite the recall of more than 20 million playthings made there. Merchants are reporting an improvement in business, including strong early sales of certain key holiday items.

Still, shoppers’ concerns over safety remain high. And mounting financial concerns could force shoppers to pull back.

“Consumers are still confused,” said Ron Boire, president of Toys “R” Us Inc.'s North American division, noting that there are some parents concerned about where products are made. But he is not seeing “a sea change.”

Ed Schmulz, chief executive of FAO Schwarz Inc., noted that there’s no “abandonment of Chinese-manufactured toys.”

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“A lot of people are looking . . . but we are not seeing a correlation between where toys are made and their sales,” Schmulz said.

That’s a big relief for the nation’s merchants, since more than 80% of toys are made in China.

Still, consumers such as Kristen Chase, 31, the mother of a 3-year-old girl and an 8-month-old boy, said she was being more cautious in selecting toys.

“I am not avoiding all Chinese products,” said Chase, who is part of a social networking website called Cafemoms.com and runs coolmompicks.com, a shopping blog for moms that focuses on small businesses. “I am just looking at safe toys.”

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A bigger worry, Boire said, is the economy. “Clearly, the economy has changed. Obviously, that is a question mark for the holiday season.”

The toy industry is less vulnerable to a challenging economy than other sectors such as apparel, since parents usually cut back on spending on themselves before reducing spending on their children. If parents buy one or two fewer toys each this holiday season, however, that collective frugality could derail the industry’s rebound made since late last year.

Wal-Mart Stores Inc. fired its first salvo Monday in the holiday discounting toy wars, announcing price cuts of 10% to 50% on products including some new holiday toys including Hasbro Inc.'s interactive parrot called Squawkers McCaw. Laura Phillips, Wal-Mart’s chief toy officer, said the world’s largest retailer would be unveiling more price reductions on holiday toys every week this month.

Phillips said Wal-Mart was being more aggressive this year in cutting prices on the current season’s hot toys.

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“We clearly understand the concerns around spending,” Phillips said.

Boire of Toys “R” Us wasn’t fazed by Wal-Mart’s move, saying Toys “R” Us offered special deals every week. KB Toys’ Geoffrey Webb, director of advertising and sales promotion, said that the retailer just launched what it called its “supervalue” program, which offers discounts on hundreds of toys.

But price competition is just part of the problem -- the toy industry needs to keep churning out big hits to compete with electronic gadgets including cellphones and Apple Inc.'s iPods.

Last fall, the industry was abuzz over TMX Elmo from Mattel’s Fisher-Price brand; the more high-tech version of the popular fuzzy, red character became an instant hit with shoppers, drawing customers into the stores early in the season. There currently isn’t one must-have for this holiday season.

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Still, retailers say they are encouraged by early strong sales of some of the holiday toys that hit stores in recent weeks.


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