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California Gov. Arnold Schwarzenegger signed into law a ban, effective in 2009, on selling toys and infant products in California that contain more than trace amounts (one tenth of 1 percent) of phthalates, chemicals most often used to soften plastic. This is the first state to impose such a ban.

FAO Schwarz unveiled plans for a permanent boutique at Macy's State Street store in Chicago, a move that could be the test case for a future roll out of such shops at Macy's stores nationwide. FAO was to open its 5,200-square-foot store-within-a-store at the State Street Macy's on November 1.

LeapFrog Enterprises said it would report a net loss of approximately 5 cents per share for the third quarter ended Sept. 30, 2007, due to disappointing sales during the period. The company, which was to officially report its quarterly performance on Nov. 1, also said net sales were $143 million.

Mega Brands sought an injunction last month in the Superior Court of Québec against Protégez-Vous, a consumer advice publication, that used what the toymaker said was the wrong test for lead content on a Mega Bloks preschool toy made in Canada, and subsequently published the erroneous results.

Action Products International's board of directors endorsed a slate of proposed initiatives to pursue acquisitions of growth companies not in the toy business. The company is planning to acquire one of several companies with whom it has been in confidential negotiations. The initiative aims to increase APII's presence with families on the Internet.

The world's largest retailer slashed prices in mid-October on 15,000 items, including toys, 20 percent more SKUs than it rolled back prices on last year. Wal-Mart also promised aditional price cuts on more toys and electronics, among other categories, to be announced soon.

Consumers' bark about avoiding toys made in China may be worse than their bite this holiday season, according to a survey of toy shoppers at online retailer eToys.com. It its survey, eToys found that 37 percent plan to spend the same amount or more on toys in 2007 compared to previous years.

Jakks Pacific's list of licenses has grown to include domestic master toy rights to Nickelodeon's SpongeBob SquarePants. In 2008, Jakks plans to introduce collectible micro figures and plush. Jakks' rights also include those for playsets, preschool toys, youth electronics, water toys and novelties.

Small World Toys Inc. has been acquired out of bankruptcy for an undisclosed sum by an investment team led by John Nelson, its former president and COO; former COO John Matise; and Howard Bennett, a 26-year veteran of the company who most recently was its senior VP of sales.

A jury has ordered ToyQuest (SLB Toys USA Inc.) to pay Wham-O $6 million for infringing Wham-O's trademark on the color yellow for water slides. The verdict chided ToyQuest for willful infringement, intentional false advertising, and willful dilution of Wham-O's yellow trademark. ToyQuest planned to appeal.

Fundex Games Ltd. has acquired privately-held Great American Puzzle Factory—the South Norwalk, Conn.-based maker of jigsaw puzzles; games; NAMiTs; One Tough Puzzle brainteasers; and John Deere, Crayola and Jelly Belly licensed products—for an undisclosed sum.

Wild Republic will produce toys based on the National Geographic/Paramount film Arctic Tale in time for the feature film's upcoming DVD release. Products will include plush versions of the movie's walrus and polar bear costars, along with playsets, puzzles, figurines and additional plush.

A Michigan pension fund, the Sterling Heights Police and Fire Retirement System, filed a shareholder suit against Mattel in a Delaware court alleging that a mishandling of product safety procedures was responsible for the company's three recalls this summer.

Everyday monsters, fire/police toys and ocean-themed toys were just some of the products highlighted in recent editions of Playthings' Product Watch e-mail newsletter, issues of which are archived on Playthings.com. Companies whose products were featured recently include Accoutrements, Aeromax, Bandai, Bestever, Brave New World, Briarpatch, Cloud B, Educational Insights, Elope, Funrise, Gund, Haba USA, High IntenCity, Imagiplay, Innovative Kids, KidsGive, Mary Meyer, Mattel, Mirrorstone Books, Nikko America, North American Bear, Odyssey Toys, Peter Pauper Press, Play Along, Playmobil, Ravensburger, Rocket USA, Rokenbok, Shelcore, Sterling Publishing, Tiny Love, Uncle Milton, Urban Playthings, Wild Republic and Zizzle.