Mattel CEO sees positive 2008, cost concerns

(Reuters) - Mattel Inc's chief executive said on Wednesday he does not expect a repeat of last year's recalls of millions of Chinese-made toys and is "optimistic about 2008" despite an economic slowdown.

But Robert Eckert told Reuters in an interview that higher commodity and labor costs would force the world's leading toymaker to increase prices this year, noting a rise in the currency of China, where it makes a majority of its products.

"I am very optimistic about 2008 for Mattel and the toy industry on the whole," Eckert said.

"I think last year's recall news is behind us and the industry in general ... I just have a real sense of optimism about 2008.

"We are always mindful of what is going on in economies, but if you look at history, the toy industry has always held up very well in tough economic times and I think this will remain the case," he said.

Despite posting a better-than-expected profit for the fourth quarter -- earnings rose to $328.5 million from $286.4 million a year earlier -- operating profits fell as a result of increased costs, notably from the extensive recalls.

Mattel recalled over 21 million Chinese-made toys worldwide in 2007 due to excessive levels of lead paint and other unsafe components, stoking fears of a loss in consumer confidence.

 

Read more at Reuters