Retail Roundup: New Law Pains Children's Retailers, Best Buy Names New CEO, More

(MoneyWatch)  New law presents fresh challenge to children's retailers -- Small retailers selling children's clothing and toys may receive their fatal blow Feb. 10 when a new law requiring that products for children be tested for toxins goes into effect. The legislation was passed after Mattel Inc. in 2007 recalled 21 million toys imported from China. Retail behemoths like Wal-Mart and Mattel promise to meet the law requirements, saying they agree to test merchandise for traces of dangerous toxins, but mom-and-pop shops are finding they can't afford to test their products and can't sell them without the certification. Some small retailers are already shuttering their businesses after weighing the law's burden with the dim outlook of the retail industry. "Smaller manufacturers don't have the infrastructure to manage these sophisticated kinds of testing," said Kathleen Fasanella, a clothing-company consultant. [Source: Bloomberg]

Dunn to assume CEO role at Best Buy -- Less than a week after Circuit City began liquidating assets, competitor Best Buy Co. announced some changes of its own -- primarily the exit of long-time CEO Brad Anderson, who has been with the world's largest electronics retailer since 1973 when he joined the company as a stereo salesman. Upon retiring in June, Anderson is slated to be replaced by Operating Chief Brian Dunn. Anderson will remain on Best Buy's board as vice chairman until his term expires in 2010, but it will be Dunn who will steer the company through what looks to be a rocky year for all retailers. [Source: Bloomberg]

Coach tightens purse strings -- Despite attempts to position its handbags as affordable luxuries, Coach Inc. said profit fell 14 percent in the quarter that ended Dec. 27, a grim reflection of what CEO Lew Frankfort called "the most challenging holiday season our company has experienced during my 30-year tenure." Coach announced plans to slow its rate of store expansion to about 20 stores a year, compared the 40 per-year growth rate it usually aims for. [Source: Heard on the Runway/WSJ]

Filene's Basement to close nearly a dozen locations -- Filene's Basement, the chain that pioneered off-price retailing, has announced that it plans to close one-third of its 36 stores nationwide in a move that signifies the pain that even discounters are feeling in the bitter economy. The company, which is best known for its "Running of the Brides" wedding gown sales, decided to shutter underperforming stores while bolstering its stronger locations. [Source: Chicago Tribune]