Mattel to take a $30 million charge on recall of China-made toys
03 Aug 2007
Mumbai:
Mattel Inc., the world''s largest toymaker, will
take a $30 million charge on recall of 967,000 Chinese-made
toys amid concerns they may contain hazardous levels
of lead paint.
The
recall involves toys featuring licensed characters like
`Elmo'' and `Dora the Explorer'' made between April 19
and July 6 and sold in its Fisher-Price unit stores
the US, Mattel said.
The
recall will mean a $30 million reduction in Mattel''s
pre-tax operating profit, the company said in a regulatory
filing. Mattel said the costs will be added to the second
quarter revenues.
Mattel had reported second-quarter revenue of $1.02 billion, with $410.4 million coming from Fisher-Price.
El Segundo Calif.-based Mattel Inc. said of the nearly one million products recalled from the US market, about 30 per cent had reached store shelves.
The
toys were made by a contract manufacturer in China for
the company''s Fisher-Price unit.
The manufacturer used non-approved paint that may contain too much lead, which has been linked to many children''s health problems, including brain damage, according to US health authorities.
Mattel
said it was reviewing procedures involving all of its
Chinese-made products and that additional issues could
surface in the future. Mattel is also expanding its
testing programmes to ensure that painted toys from
third-party manufacturers are safe before they are sent
to customers.