About Linnea Kirgan

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Linnea Kirgan has covered both media and retail industries and finds them equally soap opera-esque – full of larger-than-life personalities, passionate romance (mostly with money, but sometimes in the boardroom), and high drama.

More toy recalls with tiny powerful magnets to blame

Magnet problems continue to plague the toy industry and endanger children’s lives.

Last week, MEGA Brands announced that it would recall more than 2 million toys that had loose magnets. The Magtastik and Magnetix Jr. toys were both marketed to kids aged 3 and up — a problem since kids this age still have a tendency to put objects in their mouth.

The US Consumer Product Safety Commission has received some 40 reports of magnets falling out of the toys, including a situation with a 3-year-old who needed medical treatment to have a magnet removed from his nose.

If this sounds familiar, it should. In the last two years, MEGA Brands recalled 8 million of its best-selling Magnetix toys for loose magnets. While the boxes warned that the toys posed a choking hazard, they neglected to warn parents of another major hazard. If more than one of the tiny magnets — about the size of a pencil eraser — are swallowed, the magnets seek each other out in the intestinal tract, causing potentially fatal perforations or blockages.

Back in 2005, a toddler named Kenny Sweet died after ingesting several of the magnets, which pinched shut his small intestine and forced bacteria into his blood stream. Dozens of other children were hospitalized. (MEGA Brands plans to replace the Magnetix line later in 2008 with a new safer toy called Magnext.)

MEGA Brands isn’t the only one with magnet problems, as I discussed in this post. Last year Mattel recalled some 18 million toys — including its popular Polly Pocket brands — with similar loose magnets.  And earlier this year Battat recalled 130,000 Battat Magnabild Magnetic Building toys and sets because magnets can fall out of building pieces.

Perhaps the best news on the toy safety front (as I blogged about here) is that Congress is poised to take some action. Earlier this year the House passed a consumer safety bill (favored by toy manufacturers and the toy lobby) and the Senate passed its own version.  The Senate’s version is said to be tougher and was not favored by the toy industry or President Bush’s adminstration. The House and Senate now need to reconcile the bills and move forward.

Let’s hope they can do so quickly and with the best interests of children in mind. One of the provisions of the Senate’s version is that it would set up a public database of product safety complaints, which could help parents learn of potential product pitfalls even if an official recall doesn’t happen.

Retailers sack fans’ wallets during Super Bowl fever

I don’t know who’s more excited for the Super Bowl next Sunday between the New England Patriots and the New York Giants — the fans or the retailers.  

While you send out your Evites and place those final bets, retailers are betting that you’ll go the extra mile to make your Super Bowl party a blow out — with loads of snacks, beverages, and maybe even a brand new flatscreen HDTV. In fact, the Retail Advertising and Marketing Association (RAMA) expects this year’s Super Bowl to ring up nearly $10 billion in sales.

Even if you’re not a football fan, you can’t miss the signs everywhere that the big game is this weekend. Walk into a supermarket, like I did last night, and bump into can’t-miss displays — like my local market’s chest-high stacks of Miller Light and Heineken cases, a blow-up recliner, and a Tostitos football player balloon floating overhead. 

So, what will this year’s planners spend their bucks on?

A new big flat-screen HDTV: Costs anywhere from $1,000 at the low-end on up. RAMA estimates that nearly 4 million consumers plan to buy a new TV before the game. Expect the TV displays at your Best Buys, Wal-Marts, and Costcos to be busy this week.  Here are some shopping guides. Upping the stakes, Circuit City guarantees that customers who buy their TV by Wednesday can have the set installed by its firedog technical staff by kickoff. Furniture to seat your guests is also a popular seller, with 2.5 million people planning to buy a piece before Sunday. La-Z-Boy has an “armchair quarterback” promotion going on, pushing discounted recliners and giving away a new media room.

Beer and munchies: You know what you and your friends like — buy lots of it. Grocery stores make big bucks off veggie and deli trays this time of year. So do local and national pizza places — if you don’t feel like messing up the kitchen.

Decorations: From yard signs to megaphones to referee shirt trays, there’s still time to order up before the game. Plus, don’t forget to wear your team colors — RAMA estimates that consumers will spend $60 on Super Bowl-related merchandise. Here’s a site with lots of decorating tips. Readers send in their suggestions here, including the importance of having foam bricks on hand for those inevitable questionable calls. (Don’t want to break that brand new TV!)

Adding up the above, you could spend thousands on a bash if you go all out.  Or, you could just skip the new TV, strap on a heart rate monitor, grip the arms of your recliner, and watch the game without the crowd. Whatever your viewing preference, the game looks to be a good one.

Digital TV is coming, whether you’re ready or not

This may be the quiet before the storm. At this time next year, we’ll be about a month away from the official switch from analog TV transmission to digital TV and the consumer buzz will likely be quite a bit louder.

Full-power TV stations will turn off their analog signals on Feb. 17, 2009 and begin broadcasts in digital only. The move was mandated by the government in order to free up frequencies for public safety communications. In addition, DTV will give viewers better picture and sound quality.

People with analog TVs who rely on free, over-the-air broadcasts — about 13% of the US population — will have to purchase a special converter box in order to get a signal. Or they could subscribe to a cable or satellite TV service, or buy a new digital-ready TV set.   

Best Buy’s CEO made headlines last week when he called the transition to digital transmissions a “huge risk” for the industry. Brad Anderson said he is “very nervous” about being able to supply customers with the necessary converter boxes. “The number of converter boxes that is going to be required could put tremendous pressure on us,” Anderson said. “We’re very nervous about the potential risks. Once it gets turned off, it could be very interesting.” 

Best Buy stopped selling analog TV sets back in October, in order to reduce consumer confusion about the upcoming change.

So far, consumers have been relatively mum on the topic. Maybe that’s because they’re not completely aware of the upcoming change or don’t understand if they’re affected.  According to a recent report, more than half of Americans still have not heard about the switch.

Some legislators have expressed concern that the elderly, in particular, might be targets of con artists ready to capitalize on those not completely familiar with the procedure for adopting the new technology.

Last fall, the National Cable and Telecommunications Association announced it would spend $200 million to raise awareness and the National Association of Broadcasters plans to spend $700 million. In addition, the Consumer Electronics Association has a number of video tutorials related to the upcoming change. 

The converter boxes will cost between $50 and $70 and households can request two $40 coupons per household to offset the cost. The coupons have been available since Jan. 1, 2008, and more than 1 million consumers have requested them. Converters will be available in stores beginning in mid-February.

More than 100 retailers — including Wal-Mart and Target, translating into some 15,000 store locations — have been certified to carry the devices.

No Christmas wrapping on toy safety reforms

Looks like the gift that many parents and consumer groups desired will be arriving a little late.

After a tumultuous 2007, with more than 20 million toy recalls from major industry players including Mattel and RC2, many were looking to Congress to wrap up toy safety reform bills with a pretty bow by the end of the year. Progress was made by both the House and the Senate, each of which held intensive hearings on the subject earlier this fall, but final decisions will not come until early 2008.

In mid-December, the House unanimously (407-0) passed a toy safety reform bill that would reduce lead paint in kids’ toys to trace amounts, require independent testing of toys, improve toy tracking, and boost funding for the Consumer Product Safety Commission (to $100 million by 2011) along with an additional $20 million to overhaul the CPSC’s toy testing facility.  The House bill will also hike maximum penalties for disobeying the CPSC from $1.25 million to $10 million. (Still, some say more action is needed to give the CPSC more power to control imports, such as halting unsafe imports at their port of entry and improving border inspections.)

As part of an appropriations bill passed by the Senate in December, the CPSC will receive $70 million (an increase of $17 million from its 2007 budget, and its biggest increase in three decades). The bill also bans industry-sponsored travel for CPSC members. (CPSC staffers admitted recently to traveling on manufacturers’ dimes on a number of trips.)

This all sounds very promising, except for the fact that a Senate committee had also passed its own toy safety reform bill back in October. So, there are two toy safety reform bills floating around Congress, which could prove tricky as the bills will have to be reconciled.

Still, the Washington Post reports that Senator Mark Pryor, who sponsored the Senate’s version of the bill, said that he was close to a bi-partisan compromise to allow the bill to go forward in early 2008. (His bill proposes similar changes to the House bill, but also has several provisions that irk the toy industry such as raising civil penalties to $100 million and giving state attorneys the right to collect the fines.)

The faster Congress moves, the sooner toy makers will be spurred to take action. Manufacturers are already working on next year’s slate of toys and will flip the switch on Christmas 2008’s toy production sometime next spring. The longer action is delayed, the more toys make it into the marketplace without better safeguards in place.

Computer retail landscape continues to shift as CompUSA shuts stores

Consumers looking for a one-stop shop for all things computers will now have one fewer option. The struggling CompUSA retail chain announced last week that it would close or sell all 103 of its US locations. Earlier this year, the company closed an additional 100 stores, with plans to focus on less competitive markets and sell to small businesses and tech savvy consumers.

CompUSA’s TechPro unit, whose technicians handle repairs and upgrades, and the CompUSA Web site will continue to operate until a buyer is found.

CompUSA was fighting on a number of fronts. First, competition has increased immensely since CompUSA’s start in the 1980s. In addition to direct sellers such as Dell, the company had to compete with Internet sites such as PCConnection, which offer low-priced products and easy comparison shopping.

In recent years, office supply stores, big box chains, and electronics retailers have boosted their computer offerings. They’ve been helped by companies like Dell, which have started selling products in a wider retail environment. Dell now sells its products in Best Buy, Wal-Mart, and Staples, among others. CompUSA was one of Apple’s largest resellers until recently, when Apple struck up a deal with major competitor Best Buy. Computer companies have been shaking things up to boost sales. Desktop computer sales have been dropping each year, while laptop computer sales have been growing rapidly.

Next, consumers weren’t always thrilled with the level of technological expertise of the CompUSA staff. Keeping staffers with technological know-how was not easy at low retail store wages. In addition, customers these days are better informed and don’t like feeling that they know more than the employee selling the merchandise.

Meanwhile, other specialty retailers such as Apple stores generally employ workers with a deeper understanding of their products.  The Apple’s “Genius Bar” requires an appointment to speak to staffers unless you pay additionally for a service plan that allows you to walk in and ask a question. (Of course, Apple’s Genius staffers have generated another set of complaints from consumers.)

While I do like to shop for most things, computers are not my forte. However, my husband, an active buyer of computer products, wasn’t surprised by CompUSA’s demise. He called the store layouts disjointed and the service not very good.  ”They’re the last place I would visit, ” he said. “Or if I’m in a rush and I know they’ve got it, I’ll go there.”

If he represents the average CompUSA customer, then it’s no wonder the chain finally gave up.

Will another bricks-and-mortar retailer attempt to recreate a viable computers-only marketplace or will consumers just have to fend for themselves when it comes to computer shopping?  Maybe no one will even miss the place … what was it called again?

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