
After receiving 11 reports of broken pirate swords, Gymboree (GYMB) decided to recall the toys voluntarily. The company sold about 6,000 units before the recall.
There haven't been any reports of injury from the toys, but they have been deemd unsafe by the company and the U.S. Consumer Product Safety Commission. The breakage causes a sharp point to appear, making it a potential hazard to consumers.
Some analysts don't think the company will take the same type of hit that Starbucks (SBUX) and Mattel (MAT) have taken from defective products, even though this product was also manufactured in China.
"The case would be different if the defective products were apparel, the bread and butter of Gymboree's business," said Adrienne Tennant, an analyst for Friedman Bilings. "But the company has been proactive about the approximately $90,000 recall, which is only a small fraction of its estimated $240 million third
quarter earnings."
A spokesman for the company, Jamie Falkowski, said the company "Gymboree has extremely high quality standards, and this particular toy failed to meet those standards." He added that the company isn't assigning any blame at this time.
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