Mattel Announces Third Toy Recall

World-leading toy manufacturer Mattel has announced its third major recall in five weeks. The company determined that approximately 848,000 Chinese-made Barbie and Fisher-Price products are made with paint that could contain unsafe levels of lead. The products recalled include Barbie kitchen and furniture accessories, Fisher-Price train toys and Bongo Band drums. (No Barbie dolls were recalled.) The latest recall was prompted by the discovery that three Chinese vendors had outsourced the painting of the toys to subcontractors who used tainted paint as a cost-control measure. It follows a recall of about 1.5 million toys on August 1 for lead contamination and a recall of more than 18 million toys later in August on concerns over small magnets that can be fatal if swallowed. The recalls are occurring as Mattel approaches the holiday buying season, which accounted for 69% of sales last year. "We apologize again to everyone affected and promise that we will continue to focus on ensuring the safety and quality of our toys," said Mattel CEO Robert Eckert. In addition to the toy recalls, Chinese seafood, toothpaste and pet food have been recalled on suspicion of contamination. "News of unsafe products infiltrating the American marketplace is becoming all too familiar," said Representative Edward Markey (D-Mass). "It's clear that our consumer product safety net has a hole in it the size of China."

Sources: Reuters, Wall Street Journal, International Herald Tribune, Bloomberg
Commentary: Mattel Could Be Hit With Lawsuits on Recalls • What's Behind the Current Epidemic of Safety Recalls? • Despite Mattel Recall, I Remain Bullish
Stocks/ETFs to watch: MAT. Competitors: HAS, JAKK. ETFs: FXI, PGJ
Earnings call transcript: Mattel, Inc. Q2 2007

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.