After facing recall after recall of millions of Chinese-made items, the nation's biggest toy sellers are imposing stricter measures on their suppliers — including tougher standards for lead content — to get ahead of expected new federal legislation.
Wal-Mart Stores Inc. and Toys "R" Us Inc., the nation's top two toy sellers, are setting a much tighter standard for the amount of lead allowed on surface paint for toys shipped to their chains on or after March 1. The companies are also phasing out chemicals found in PVC, or vinyl, that have raised safety concerns in products for infants and young children.
The measures are meant to meet or exceed new federal standards expected from Congress in the wake of last year's highly publicized recalls of millions of toys because they contained excessive amounts of lead or other hazards.
"We made a commitment to the world that we would push forward toy safety as a top priority," said Gerald L. Storch, chairman and CEO of Toys "R" Us, which announced the measures Friday. "This is not the last improvement that we will put in place."
Laura Phillips, vice president and chief toy officer for Wal-Mart, noted that the company is "in the season of writing orders" and needed to make the appropriate changes.
The moves come as the industry gears up for the annual American International Toy Fair, which officially begins Sunday. While stores say that parents' anxiety about toy safety has subsided, retailers and toy makers can't afford another major recall and said they need to become extra vigilant.
Target Corp., the nation's No. 2 discounter, said it was working with its "vendors, industry leaders and the Consumer Product Safety Commission," but did not give specifics.
Ed Schmults, chief executive of FAO Schwarz, said Friday that the upscale toy merchant was forcing suppliers to meet more stringent requirements but would not offer details.
The toy industry has a lot at stake. A challenging economy and the fallout from the recalls hurt toy sales last year. Market research firm NPD Group Inc. says traditional toy sales fell 2 percent to $22.1 billion in 2007 from a year earlier, and 5 percent in the October to December period.
Sean McGowan, a retail analyst at Needham & Co., said he expects industry sales this year to be at best unchanged as toy retailers face an overall slowdown in consumer spending.
A top priority is dramatically reducing the lead content in toys, since lead can be toxic if children ingest it. The current federal standard is 600 parts per million in surface coatings, but new legislation being considered would dramatically lower that to 90 parts per million.
Both Wal-Mart and Toys "R" Us are requiring their suppliers to conform to the 90 parts per million standard for products shipped on or after March.
Meanwhile, Toys "R" Us is requiring materials inside of the toys to meet a standard of 250 parts per million for lead for all products made exclusively for the retailer, compared with the current standard of 600 parts per million.
Wal-Mart spokeswoman Melissa O'Brien said the company has not set a deadline for suppliers on that issue, but is encouraging them to cut back given the pending legislation.
Another issue is phthalates, chemicals that are used to soften PVC, or polyvinyl chloride.
Toys "R" Us said it has notified suppliers that by the end of this year, all children's and baby products sold in its stores must be produced without any phthalates. The goal is to eliminate these chemicals in its products either by using another ingredient to soften vinyl or eliminating vinyl completely.
Wal-Mart is forcing suppliers to reduce the amount of phthalates to 0.1 percent in its products, beginning in August. Those standards are in line with rules being enacted in California, while the new federal legislation on the table does not address phthalates.
Toys "R" Us also hopes to eliminate nickel-cadmium batteries from its products by the end of the year in a move meant to help the environment. The company has instructed its suppliers to immediately take steps to abolish the use of such batteries in all items made for Toys "R" Us.
It is also forcing stores to have products that are shipped on or after March 1 coded with the manufacturing date, to help identify toys that have been recalled. Both Toys "R" Us and Wal-Mart are also requiring suppliers to have independent labs test the toys they make more frequently.
O'Brien said Wal-Mart had no announcement on the nickel-cadmium issue but was encouraging its suppliers to stamp date codes on their products.