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Recalled Toys Often Make A Comeback

Oct 31, 2008 | Parker Waichman LLP Last year saw a spate of toy recalls—more than 20 million—over a wide variety of issues, including toxic lead paint and magnets, that proved deadly when swallowed.  One of the most deadly recalls involved the Auqa Dots toy, which were recalled last November after several children swallowed the toy’s beads and fell into temporary comas.  The toys, when swallowed, metabolized into the so-called date rape drug.

Now Spin Master and Mega Brands are reintroducing LookPixos, a toy marketed by Spin Master Ltd. of Toronto.  Like Aqua Dots, LookPixos allows children to arrange small beads into designs, that, when water is added, allows them attach together permanently. Pixos are a new version of the same toy, but are being marketed under a different name.

Since last year, the toy industry has spent an estimated $200 million to enhance safety procedures and Congress overhauled the Consumer Product Safety Commission, increasing its budget by about 30 percent.  But, despite the changes, reputations were damaged and the toy industry is struggling to balance eliminating certain toy brands entirely, launching new lines, or marketing older toys under new names.  "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.

Many of last year’s recalls were part of a seemingly never-ending series of defective toy and consumer product debacles that originated in China.  Aqua Dots, which was also sold under the name Bindeez, contained a chemical coating used to make the Aqua Dot beads fuse together; however that coating turned into the date rape drug gamma hydroxyl butyrate—or GHB—when the beads are swallowed.   GHB can cause unconsciousness, seizures, drowsiness, coma, and even death.  Spin Master claims that a Chinese factory failed to use a nontoxic chemical, prompting a recall of 4.2 million units.  "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, Spin Master’s head of marketing and design; however, the firm "had invested millions of dollars in product development, manufacturing, and TV commercials" for Aqua Dots and "customers were saying they love the toy."  To resolve the issue, Spin Master kept the toy and lost the name. "We're not trying to fool anyone," says Sullivan, but Spin Master, in an attempt to save money is reusing old Aqua Dots commercials, replacing the word “Aqua Dots” to the toy’s new name.

Thomas & Friends—a toy train line made by RC2 Corporation—was recalled for containing lead paint last year; however, the Thomas brand, which is owned by Hit Entertainment Limited, appears in toys, books, puzzles, and a television show.  In that case, the brand name remained, for the most part, unchanged this year.  This was also the case with toys using Dora the Explorer and Sarge.  Both are popular cartoon characters and both involved lead recalls from Mattell Inc.

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