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Industry News - March 2009

Published: February 11, 2009
TIA to unveil lead testing protocol
On March 10, the Toy Industry Association (TIA) announced that it will be submitting a recommended testing protocol for consideration to the U.S. Consumer Product Safety Commission (CPSC). This protocol endeavors to efficiently verify lead paint limits on toys and children's products defined in the Consumer Product Safety Improvement Act (CPSIA).

The CPSIA required the CPSC to begin enforcement of new lead and phthalate standards for children's products on Feb. 10, 2009. However, testing and certification requirements were not in place, to the CPSC postponed the deadline for mandatory testing until Feb. 10, 2010.

TIA has convened a task group of laboratory experts to assist and speed the effort by recommending a new lead testing protocol for paint and similar surface coatings that will satisfy CPSIA requirements. The protocol is expected to be ready for consideration by the CPSC in late March.

On February 10, TIA launched its Electronic Certification System (ECS), a web-based platform to help domestic manufacturers and importers of toys to the U.S. meet the General Certificates of Compliance (GCC) requirements of the CPSIA. The ECS is part of TIA's new Toy Safety Certification Program (TSCP), which it hopes will provide verification that toys meet U.S. toy safety standards.

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Testor Corp. branches out
2009 marks the 80-year anniversary for The Testor Corporation. Founded in 1929 by Swedish immigrant Nils Testor, the company's started out as a glue manufacturer. Still based in Rockford, Ill., Testor Corp. is leveraging its historic hobby-business strengths to expand into the Craft and Creative Learning categories.

"We at Testor Corporation are entering a new chapter in our 80-year history as we expand our superior product into the craft and creative play categories while maintaining our commitment to the hobby category," company President Charlie Leichtweis notes.

Testor has recently introduced Quick-Build model kit activity sets to expand its consumer base. It has continued with a new product line aimed at craft and home decoration activities that features a unique easy to use airbrush system.

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Traxxas signs three-year sponsorship deal
Traxxas announced that the company will be the 2009-2011 series title sponsor of TORC, The Off-Road Championship Series. The Traxxas TORC Series will feature competitive teams in short-course racing on tracks in the midwestern and western U.S.

TORC national broadcast coverage is due to be announced. The season kicks off May 15, 2009 at Manzanita Speedway in Phoenix, Arizona.

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$1 billion in unsellable inventory
According to the Wall Street Journal, manufacturers of children's products and charities that operate resale stores, such as Good Will Industries, are sitting on more than $1 billion in inventory they can't sell due to the new Consumer Product Safety Improvement Act (CPSIA).

The act, which went into effect this past Feb. 10, further restricts the amount of lead and phthalates allowed in toys and clothes meant for children 12 and under. It has also affected products that may not be obvious, such as off-road motorcycles and four-wheelers designed for kids aged six to 12.

The Toy Industry Association has estimated that the toys made illegal by the CPSIA totals more than $600 million in inventory sitting either in manufacturers' warehouses or are already in transit to stores.

Large retail chains, including Wal-Mart, Target and Toys "R" Us have notified suppliers that they will have to take back products already shipped if they are not certified as meeting the CPSIA's tough standards.

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MTH announces dealer appreciation program
MTH Electric Trains has released details of its 2009 Dealer Appreciation Program (DAP). It features a limited selection of items, each in a specially marked DAP package, that will not appear in any MTH catalog in DAP configuration. Quantities are also limited; each authorized MTH retailer will get only two of these special packages.

Products in the 2009 DAP:

  • O gauge: Union Pacific DDA40X special business train

  • O gauge: engineering version of the Orient Express Chapelon Pacific 2-3-1 (4-6-2) steam engine

  • Standard gauge: two new Lionel Corporation tinplate freight cars: No. 214 Std. Gauge Box Car and No. 2814 O Gauge Box Car, reflecting MTH's recent licensing agreement with Lionel

  • One gauge: RailKing Erie 4-bay hopper

  • O gauge: 2009 Christmas car

  • HO scale: EMD demonstrator SD70ACe diesel engine. This version features a GM logo rather an EMD-logo like the regular model.

  • For more details, CLICK HERE

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    Bowser retires products
    Model railroad manufacturer Bowser is ceasing production of part of its line, but has plans to continue producing models in HO and N scales.

    According to a release from owner Lee English, the Montoursville, Pa., company is discontinuing production of HO steam locomotives, turntables, and Standard- and O-gauge replacement wheels.

    Bowser will continue to produce HO diesel locomotives, freight cars and trolleys, and N scale freight cars. It will also make Cal Scale, Selley and Cary detail parts.

    "We have plans for many new products, but they do not include any steam locos in any scale." English said.

    He also said steam locomotive parts are still available, but when the supply is exhausted, he does not plan to restock.

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    Futaba signs rock crawler Dunn
    Futaba has signed radio-control rock crawling ace Austin Dunn. The winner of many regional and national crawling events, Dunn is always on the cutting edge when it comes to innovative designs and has helped push the crawling scene to the next level.

    When asked why he made the switch to Futaba, Dunn said, "When the nationals are on the line, I want to have 110% confidence in my equipment. With Futaba, I now have that confidence."

    He added, "With their new 4PK, I will be able to do things I only dreamed about ... it really opens the door for innovation!"

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    New records set with AeroTech power
    Curt von Delius crushed his previous M-class altitude record of 37,762 feet on September 19, 2008 by flying a rocket to a GPS verified altitude of 45,328 feet AGL during the XPRS launch in Nevada's Black Rock Desert. Days later, he set a new J-class altitude record of 19,758 feet. The altitudes were recently certified by the Tripoli Contest and Records Committee.

    Von Delius' MMAX flight used a Kosdon by AeroTech Animal-Compatible (KBA A-C) M1450W reload kit (AeroTech Prod. No. K13145P) that generates a peak thrust of 480 pounds during a burn time of 5.46 seconds. The rocket pulled 24 Gs and the time to apogee was 46 seconds, with the vehicle coasting for nearly 40 seconds after motor burnout.

    A Beeline GPS was used to verify the maximum altitude and provide tracking during the over 5 minute descent.

    The J-class record was set Sept. 21 with an RMS-38/1080 motor loaded with an AeroTech J570W reload kit(AeroTech Prod No. 10570M).

    Von Delius also the holder of the 'L'-class record of 31,316 feet.

    AeroTech Consumer Aerospace is a division of RCS Rocket Motor Components, Inc., Cedar City, UT.

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    Walthers becomes LGB distributor
    Märklin Inc., the North American subsidiary of Märklin GmbH, has appointed Wm. K. Walthers Inc. as the exclusive distributor for LGB products in North America.

    Phil Walthers, president of Milwaukee, Wis..-based Walthers, and Fred Gates, board member of Märklin Inc., signed the agreement on Feb. 5 in Nuremberg, Germany.

    Walthers will handle sales, warehousing and distribution of the LGB product line, along with warranty and retail service.

    Märklin Inc., New Berlin, Wis., will provide marketing and product/technical support to Walthers.

    For the 2009 LGB New Items brochure, CLICK HERE.
    Room rates down for NRHSA Table Top Expo
    Room rates for the National Retail Hobby Stores Association Table Top Expo have been reduced to $69, per night, according to NRHSA President Art Schaefer.

    The event, April 13-17 at the Las Vegas Hilton, includes the Expo itself, hands-on product demonstrations, radio-control flying demos, and a golf outing. Educational opportunities include a special dealer-to-dealer, seminar, "Adapting Your Hobby Business for the Future."

    Other activities include R/C boat and car races, a garden railway tour and barbecue.

    Registrants also get free entry into the Game Manufacturers Association (GAMA) show, as well as access to its seminars.

    To register or for more information, visit the NRHSA Web site or call 630-510-4596. To book your hotel room at the Las Vegas Hilton, call 800-732-7117 or 702-732-5111 and give them code SNRH9R.
    Toy Fair 2009 mixes new products with safety questions
    Toy Fair, Feb. 15-18 at New York's Javits Center, saw lots of new products in all hobby categories, plus a veritable explosion of both hobby and family games.

    Various media sources indicated attendance was flat. That was echoed by at least one of the attendees: "The first two days were good; the second two days were terrible," said Adam Tager, vice president of Model Power. He said he noticed an emphasis on baby- and young-child-related items; products mainly for those age 5 and younger.

    Although the halls had smaller crowds than in the past, the buyers who attended were serious about doing business at the show.

    Many exhibitors reported plenty of interest and orders from specialty stores. Some exhibitors were surprised at the amount of attention their lines received from hobby and game stores, because their products traditionally didn't appeal to that market. Almost all of the retailers showed more interest in family-oriented board and card games than they have in years past.

    Product safety was also high on everyone's mind this year. Attendees flocked to this year's product safety seminar, featuring a presentation by the Consumer Product Safety Commission's acting chair, Nancy Nord. Questions about the implementation of the Consumer Product Safety Improvement Act (CPSIA) were on everyone's lips, with many product testing companies exhibiting on the show floor. Plenty of questions remained at the end of the session.

    Tager said the show attracted some international attendees, but by and large, most of the dealers and distributors were from New York, New Jersey and surrounding states. "The show has gotten very regional," he said. Tager said he got the impression American companies were more interested in attending the Nuremberg (Spielwarenmesse) Toy Fair.

    Tager said he felt the New York show is no longer oriented toward the hobby market. "If they're not careful, this show may not make it very much longer," he said.

    Even though Model Power has been participating in it more than 50 years, he said, he wasn't sure the company would be back next year, noting that it had picked up only a few new accounts.

    Some of the specialty highlights from the show:

  • Playroom Entertainment showed a string of new game titles, including the popular import "Ligretto," the European-style board game "Livingstone," and Red and Violet expansion decks for "Killer Bunnies: Journey to Jupiter." Their new Reiner Knizia game, "Scary Tales," also looked very promising.

  • Gamewright's new releases covered a broad range of age categories and playing styles. New releases include action-oriented "Ring-O Flamingo" (featuring flamingoes and alligators together - always a winning combination) and "Can You See What I See?" which creates a visual game of hide and seek with image cards.

  • Attakus America displayed a beautiful new line of collector sculptures featuring Star Wars and Marvel characters, plus figures from the popular Shrek movies.

  • R&R Games expanded their line with a 10th anniversary edition of "Time's Up," along with two new party games: "Pants on Fire" and "Pressure Point." They also showed a European-style strategy game titled "Masters of Venice," designed by R&R founder Frank DiLorenzo.

  • Playmobil rolled out a new Egyptian line. Major buildings include a pyramid, sphinx , Pharaoh's Temple, and the tomb raiders' hideout.

  • Taking a cue from the online service Facebook, Winning Moves showed "25 Random Things About Me - The Game." They also showed a checkers variant titled "King Me," along with a line of hand-held puzzles from USA Today.

  • If you want a party game that's easy to explain and offers a very unique hook, take a look at "Triviathon" from new company Jeezle Pete. This game comes to you from the brothers that created this year's million-dollar prize winning Doritos Super Bowl commercial. The game uses a "you don't need to know the answer" concept to create a light engaging playing experience. Look for it in March.

  • By John Kaufeld - Sue Brettingen contributed to this article

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    Fallout continues at Märklin
    Two Märklin employees have been fired in the wake of the company's insolvency and owner Kingsbridge Capital is refuting allegations it's being investigated by a public prosecutor regarding its role in the company's financial demise.

    According to the German business daily Handelsblatt, insolvency trustee Michael Pluta confirmed Karlheinz Menrad, the head of Märklin's Hungarian subsidiary, has been dismissed. Reportedly, Menrad had transferred more than $127,000 to Adler Toy, a holding company owned by the Hardt Group - connected to Kingsbridge - just prior to the declaration of insolvency. Menrad is a managing director of Adler Toy.

    Only the German portion of Märklin has declared insolvency.

    Also dismissed was Hans Reyher, the company's head of bookkeeping at the Goeppingen, Germany headquarters. Both men were longtime employees.

    The firings come amidst reports in the German media of an investigation into the fees paid by Märklin to consultants since Kingsbridge bought it in 1996. According to reports, Pluta said the company might not be insolvent if it hadn't paid the approximately $50.1 million in fees. Kingsbridge has refuted Pluta's claim and might pursue legal action against the administrator.

    Authorities in the state of Baden-Wurttemberg, where Goeppingen is located, are also reportedly looking into allegations that Kingsbridge and Goldman Sachs lied about the financial situation of Märklin to get bank financing and that "hush money" was paid to some employees.

    One direct effect of the insolvency has been the cutting back of the number of starter sets offered by Märklin GmbH. Dealers were notified in late February the previous list had undergone "a critical analysis" and that 13 sets had been cut, along with one new item.

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    CPSIA limits are now in effect
    On Feb. 10, the new lead limits defined in the Consumer Product Safety Improvement Act (CPSIA) went into effect. The new regulations state that any children's product containing more than 600 parts per million (ppm) in any part that is accessible will be treated as a banned and hazardous substance.

    As defined by the act, children's products are those intended primarily for consumers 12 years of age or younger. According to the Consumer Product Safety Commission (CPSC), there are four elements that must be considered when determining whether a product falls into this category: (1) A statement by the manufacturer about the intended use of the product, including a label on the product if such statement is reasonable. (2) Whether the product is represented in its packaging, display, promotion or advertising as appropriate for use by children 12 years of age or younger. (3) Whether the product is commonly recognized by consumers as being intended for use by a child 12 years of age or younger. (4) The Age Determination Guidelines issued by the Commission staff in September 2002, and any successor to such guidelines.

    While the CPSC voted for a stay of testing requirements for manufacturers, making the effective date of those CPSIA regulations Feb. 10, 2009, the enforcement portion of the act did become active. The acting director of the CPSC, Nancy Nord, said that only Congress could grant a stay of the enforcement portions of the act, and that the CPSC was unable to supersede congressional power.

    While this alleviated pressure on the manufacturers, who now aren't required to test and certify that products meet the new enforceable standards implemented by the CPSIA, retailers are left in the unenviable position of deciding if they want to sell products that may or may not meet the new standards.

    According to the CPSC, retailers are not required to test products. However, the burden has shifted to retailers, as they cannot knowingly sell children's products that do not meet the requirements of the CPSIA. The CPSC suggests that retailers can protect themselves by screening for products that violate the new law, and avoid products that are "likely to have lead, phthalates, or do not meet mandatory toy standards."

    If a retailer does sell a product in violation of the CPSIA, the commission says that there isn't a hard and fast rule for response. According to guidelines on the CPSC Web site, punishment for violation varies depending upon "the circumstances, including the nature of the defect, the number of products, the severity of risk of injury … and the type of violation."

    For guidance on the CPSIA, click here.

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    Märklin continues operations under trustee
    German model railroad manufacturer Märklin continues to make trains after declaring insolvency February 4 (see Märklin declares bankruptcy). A trustee has been appointed to oversee the reorganization of the 150-year-old company.

    The administrator, Michael Pluta, says he's already received "a mountain" of inquiries to purchase the company, according to German business media sources. However, selling the company may be a complex ordeal: only the German parts of Märklin are included in the insolvency filings.

    A statement posted on says "Märklin, Inc. of North America is not affected by the declaration of insolvency and remains a viable business. Product for the three brands Märklin, Trix, and LGB will be delivered to Walthers via Märklin, Inc. Spare parts, repair, and warranty service will continue to be offered for the first two brands and will be offered for the first time in the near future for LGB."

    Wm. K. Walthers is the North American distributor of Märklin products. Vice president of sales Kevin Copsey says the day-to-day business won't change. "As far as any short-term impact to Walthers, we're not expecting any," he said.

    Märklin's Hungarian operation, where much of the manufacturing takes place, is still legally solvent, as is Märklin holding company Eagle Toy. The business publication Handelsblatt reports the Märklin copyrights are being held by banks as collateral.

    One of Pluta's first moves was to dismiss all consultants from Märklin. Sources say they've cost the company $51.4 million since the company was purchased by Kingsbridge Capital three years ago.

    Members of Märklin's executive team did not appear during the recent Spielwarenmesse Toy Fair in Nuremberg. At the time of the insolvency filing, executive Dietmar Mundil released this statement: "We are determined to restructure our traditional company … using the instruments of German insolvency law and establish it permanently in the market."

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    Moebius on the move
    Just a small start-up in 2007, Moebius Models had two employees: its owner, Frank Winspur, and his mother, JoAnn, who is also his business partner. They ran the business from Frank's house, with warehousing in Seattle, Wash., and Los Angeles.

    Since then, Moebius has added Peter Collins, sales rep, and Dave Metzner, new product manager, both of whom hail from Polar Lights before its purchase by RC2; and Angela Baumgartner, who handles customer service, shipping and billing.

    Moebius, which has now become almost synonymous with retro and licensed plastic models, is seeing a slow increase in sales, despite some setbacks in 2008.

    "We're getting there," said Winspur. "One of the small problems we had at the end of [2008] was everything came at one time." Moebius had eight different kits all arrive within six weeks of each other. With a glut of kits on the market, many retailers didn't have the capability to stock all the models.

    Another hiccup was the product testing required by Universal for the Gigantic Frankenstein kit. After wrangling with lawyers, submitting for flammability testing and changing the instructions, the model was three months behind schedule.

    For now, Moebius Models is concentrating on warehousing the rest of its stock in its new DeLand, Fla., location, getting new releases out and scoring new licenses for future kits.

    "We have other stuff lined up, but we just don't want to get too far ahead at this point," Winspur said.

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    TWH wins award, an Internet forum and review site for collectors of model emergency vehicles, recently named TWH Collectibles' 1:50 Kern County Pierce Quantum Pumper as its 2008 Fire Apparatus Model of the Year. TWH Collectibles' debut model in the fire and rescue category captured 35% of the vote from collectors worldwide.

    Among the model's features are a pivoting, opening cab, a detailed diesel engine and transmission; realistic air, hydraulic and electrical hoses and wiring; and a photo-etch grille. It's available from b2b Replicas.

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