Mega Brands also plans to rearrange its corporate structure to try and regain the faith of its investors and clients.
The new product, Magnext is expected to replace the Magnetix line on US shelves next summer, after its reputation was damaged by two recalls. Sales fell from nearly $28 million in 2005 to nothing in 2007 while also costing the firm almost $65 million in lawsuits and recall costs.
Marc Bertrand, CEO, said the new item prevents the magnets from being swallowed.
“We have designed a product that exceeds all current and proposed regulatory changes related to magnets in toys. Clearly the decline of Magnetix following the two products recall is having a significant impact on our profitability," Bertrand said.
The firm plans to place all products under the three major brands of Mega Bloks, Rose Art and Board Dude, while implementing changes in its Chinese operations, such as a new vendor program and stricter safety measures.
A new chief operations officer will be hired to oversee manufacturing and supply-chain issues while Bertrand will become chief innovation officer, responsible for sales, marketing and product development.
"While we're comfortable with our plan, we know we have a long road ahead of us to regain the credibility and trust of the market. We know that part of regaining that trust is demonstrating we take responsibility for our actions," he said.
"We have strong brands, strong category positions and a strong future."