Consumer Confidential: Freeway fun, airline fees, Barbie boosts Mattel
-- It's "Carmageddon" day in Los Angeles as the city braces for closure of a section of the 405. But a number of businesses are seeing opportunity amid crisis. The freeway-adjacent Sherman Oaks Galleria, for example, is holding an "I Survived Carmageddon Weekend Celebration" for shoppers brave enough to make it to the mall. Restaurants at the Galleria are offering two-for-one drinks promotions, free food samples and other incentives to lure neighborhood customers who may otherwise have been scared off the roads. Two movie theaters near the freeway will also reward customers with free popcorn. And Redbox, which rents DVDs and games through vending machines, is offering L.A. customers 50 cents off on selected titles "to ease the pain" of the closure. Outside the city, a hotel at Mammoth Mountain is offering an "Escape Carmaggedon" package of a three-night stay for $405, plus tax. Four hundred and five dollars. Get it?
-- It's about time: Airlines would be required to be more up front about fees and bungled baggage delivery under new rules proposed by the U.S. Transportation Department. "In an era of rising fees, passengers deserve better information about how airlines are performing," says Transportation Secretary Ray LaHood. Airlines received $3.4 billion from baggage fees and $2.3 billion from reservation change fees in 2010. Under the proposal, airlines would be required to report 16 additional categories of fees in addition to baggage and reservation change fees. Airlines already report the number of mishandled bags relative to the number of passengers flown. However, more passengers are choosing not to check bags to avoid fees, decreasing the number of checked bags overall. Under the proposal, airlines would be required to report the total number of checked bags. That would allow passengers to compare the number of lost or damaged bags relative to the number of bags handled by the airlines, which is a more useful comparison, the department says.
-- The economy may be stuck in the mud, but these are good days to be Barbie. Strong sales of Barbie and toys tied into Disney/Pixar's "Cars 2" helped El Segundo-based Mattel's second-quarter net income rise 56%. Profit for the three months ended June 30 rose to $80.5 million. "Despite the mixed economic news, I am encouraged by our strong operating results and continue to believe we are well-positioned for the all-important second half of the year," says Chief Executive Robert Eckert. Toys tied into summer movies generally do well. This summer a bumper crop of toy-related movies are out. In addition to "Cars 2," Mattel is selling toys related to "Green Lantern." Barbie sales rose 12%. Monster High and Disney Princess dolls also performed well. One weak spot was Hot Wheels. Sales fell 2%.
-- David Lazarus
Photo: Closure of the 405 is an opportunity for some businesses. Credit: Reed Saxon/Associated Press