Law Poses Challenges for Kids Brands

WASHINGTON — The Consumer Product Safety Improvement Act could cause major headaches for some footwear executives. New provisions in the legislation went into effect in November and include 30 new regulations that will be implemented over time, while some are already in place. While not all the regulations will impact footwear companies, a number of them could make the importation of children’s shoes a more time-consuming and costly process.

“It’s a daunting piece of legislation even for experts,” said Quin Dodd, an attorney with law fi rm Mintz Levin, which represents clients in the consumer product safety arena. What companies should not do, he cautioned, is bury their heads in the sand if the regulations seem overwhelming. “That might have worked in the past, but certainly for a company of any size, that type of approach is really not wise anymore because of substantial liabilities,” he said.

The bill, aimed at improving product safety in the wake of several high-profi le cases involving goods imported from China, will most directly impact footwear companies through the lead standard and the certifi – cation requirement, sources said, although the full implications of other pieces of the legislation aren’t yet known.

The new lead standard is an obstacle because there are so many components in shoes, and all must be certifi ed. The allowed limit of lead was lowered signifi cantly in the new legislation to 600 parts per million. That will be reduced again to 300 parts per million in August 2009 and could shrink to 100 parts per million two years later. Authorities still need to determine if the fi nal mandated levels are realistic, sources said. The current requirement, which companies must adhere to by Feb. 10, mandates extensive testing and logistical costs for companies, said Steven Lamar, EVP of the American Apparel and Footwear Association. Many products that weren’t tested before have to be now.

The new rules also raise the age level that defi nes children’s goods to 12 years and expand the pool of products that are subject to many of the safety standards. Previously, the general product safety standards applied to goods for children age 8 and under, with the differences outlined by product categories.

Raising the age limits to include tween merchandise is signifi cant for footwear, jewelry and apparel, said Chuck Samuels, a member of Mintz Levin. For one thing, footwear and apparel is usually sold by size, not age. Defi ning the line between children’s footwear and apparel from that of adults could be diffi cult, sources said. In addition, one of the standards for defi ning merchandise for children is how something is marketed, Levin said. In an age when cartoon characters adorn shoes and accessories worn by people of all ages, those lines can be murky.

Under the new legislation, the stakes are higher as well. Fines for violations were raised to a maximum of $15 million from $1.8 million. The penalty for individual violations, assessed per product, increased from $5,000 to $100,000.

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