Toy stores say they’re not seeing China backlash

updated 5:58 p.m. ET Oct. 1, 2007

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 are still 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 still concerned about where products are made. But he is not seeing "a sea change."

Ed Schmults, chief executive of FAO Schwarz, agreed, noting that there's no "abandonment of Chinese-manufactured toys. A lot of people are looking ... but we are not seeing a correlation between where toys are made and their sales."

That's a big relief for the nation's merchants, since more than 80 percent of toys sold in the U.S. are made in China.

Still, consumers like Kristen Chase, 31, the mother of a 3-year-old girl and an 8-month-old boy, say they are being more cautious in selecting toys.

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

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 economic environment than other sectors like apparel, since parents usually cut back on spending on themselves before reducing their buying for their children. Still, if parents buy only one or two fewer toys each this holiday season, that collective frugality could derail the industry's rebound made since late last year.

Recall information Are your kids' toys safe? To find out if a product you own has been recalled, you can try searching the  Consumer Product Safety Commission’s database here. Concerned parents and caregivers also can sign up to received an e-mail alert when a new product recall is made public. To sign up, click here. To find out if a toy you own was part of the Mattel recall, and get information about obtaining a voucher for the cost of the product, click here.

Meanwhile, Wal-Mart Stores Inc. fired its first salvo in the holiday discounting toy wars, announcing on Monday price cuts from 10 percent to 50 percent on products including some new holiday toys like Hasbro Inc.'s interactive parrot called Squawkers McCaw. Laura Phillips, Wal-Mart's chief toy officer, promised that the world's largest retailer will be unveiling more price reductions on holiday toys every week in October.

The timing of Wal-Mart's price reductions is about a week earlier than last year's discounting campaign. Phillips also noted that Wal-Mart is being more aggressive this year in cutting prices on the current season's hot toys.

"We clearly understand the concerns around spending," Phillips said.

Still, Toys "R" Us' Boire wasn't fazed by Wal-Mart's move, saying Toys "R" Us remains an authority on toy selling, citing special deals every week. KB Toys' Geoffrey Webb, director of advertising and sales promotion, said that the retailer just launched what it calls its "supervalue" program, which offers discounts on hundreds of toys.

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