Mattel's problems are as bad as I thought…

Brazil Suspends Mattel's Licenses to Import Toys (Update3)

By Guillermo Parra-Bernal and Heather Burke

Sept. 12 (Bloomberg) -- Brazil suspended licenses held by Mattel Inc., the world's largest toymaker, to import its goods into the country after a recall of more than 21 million Chinese- made toys that began last month.

Some licenses were revoked on Aug. 17, according to a statement posted last night on the Web site of the Development, Trade and Industry Ministry. The permits can only be renewed after Mattel has assured local authorities and consumers that all technical and safety standards have been met.

``The objective of this is to avert that defective toys, all those that appear in the company's global recall list, enter Brazilian soil,'' the ministry said.

Mattel's recalls of toys with lead paint or magnets that may become detached and swallowed by children have occurred heading into the fourth-quarter holiday season, which last year accounted for more than one-third of annual revenue. Chief Executive Officer Robert Eckert is testifying today at a U.S. Senate hearing on toy safety.

Forty-four percent of Mattel's revenue comes from outside the U.S., Chief Financial Officer Kevin Farr said in a Sept. 10 presentation. Brazil is probably Mattel's second-largest market in Latin America after Mexico, according to Sean McGowan, an analyst at Wedbush Morgan Securities in New York. [MORE]