August 21, 2007 in Business

American toymakers are ready to play

Newhouse News Service The Spokesman-Review
 

A flurry of recalls of Chinese-made toys this summer has raised parents’ awareness about the kinds of things that are in their kids’ toy boxes.

For companies that can still stamp “Made in U.S.A.” on their products — at a time when 80 percent of toys are made in China — that spells opportunity.

After Mattel announced a huge recall of Barbie, Polly Pockets and “Cars” movie toys earlier this week because of lead paint and other dangers, the Cleveland-area specialty toy store chain Playmatters was flooded with inquiries about American and European-made toys, founder Michael Ziegenhagen said.

“There’s a high level of interest — more than any time that I’ve been in business,” he said.

Little Tikes has noticed, too. The company, which makes Cozy Coupes and other molded plastic toys in Hudson, Ohio, has started doing more to call attention to its local manufacturing, said Tom Prichard, executive vice president.

“We’re looking at modifying our packaging to make it easy for the consumer to tell what products are made here in the U.S.,” he said. The company also is considering creating displays for American-made items.

Nearby, at Streetsboro, Ohio-based Step2 Co., spokeswoman Dotti Foltz reported a surge in customer inquiries by phone and e-mail this week about the toy maker’s American-made goods.

The company has factories in Streetsboro, Perrysville in central Ohio, and Fort Valley, Ga., that turn out molded plastic toys similar to Little Tikes’. Although Step2 has outsourced some production to Korea, Foltz said, the “vast majority” of its U.S. sales come from products made here.

Like many parents, no doubt, Michael Garapic of Medina, Ohio, has been avoiding Chinese toys for the past month. But it’s been tough, especially with a 6-year-old.

“It’s hard to tell him that he can’t have something that he really wants,” Garapic said. “He doesn’t understand it.”

But after combing store aisles, Garapic said, he’s discovered it’s almost impossible to find something not made in China.

Parents have to realize that many of the products kids want just aren’t made domestically, said Chris Byrne, an independent toy analyst in New York.

“How many Little Tikes does a family buy?” he said, noting that when a child wants something specific, it can be almost impossible to find an acceptable substitute. “A 4-year-old who wants a Barbie is not paying attention to all this news.”

Still, parents are searching. Googling, too.

An increasing number of people have found Step2’s Web site recently by searching terms like “American-made toys” online, Foltz said.

And when parents find toys not made in China, apparently they’re buying.

Recently, Ziegenhagen watched a mother leave one of his Playmatters stores with an armful of wooden, German-made baby toys, vowing to throw away all her child’s old toys.

Even so, goods from Western countries make up only about 35 percent of the inventory at Playmatters stores in the Cleveland area. Much of the rest is from China.

Ziegenhagen would like to carry more American products, but it’s just not an option.

“There simply are not suppliers available,” he said. And besides, “There are a lot of things American-made that look like you found them at an Amish flea market.”

Companies like Little Tikes, which specializes in large plastic play sets, are a rare breed. Little Tikes still makes about 65 percent of its American merchandise at its Northeast Ohio factory.

“We’ve got the world’s best, most qualified rotor molding engineers and technicians right here,” Prichard said, though the company does make many of its smaller toys at factories in Europe and Asia, including China.

Labor-intensive toy production has to be done in China in order to be cost-effective, said Gerrick Johnson, a toy industry analyst for BMO Capital Markets in New York.

“Anything that requires more than one or two human beings to make would not be made here,” he said.

Eventually, Johnson expects increased government oversight of Chinese goods to ease the minds of consumers. Until then, companies are riding the buy-American wave while it lasts.


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