Made in Germany

Production in China may have been economical, but "it simply wasn't calculable enough for a premium product," Steiff chief Martin Frechen told the German daily Stuttgarter Nachrichten on Wednesday, July 2.

Chinese firms, outsourced for complicated cuts in the stuffed animal making process, didn't meet Steiff's expectations.

Delivery times were too long, since ship transport from China to Germany took up to three months. This led to long waits for hit products, like the Steiff version of Germany's famed polar bear baby Knut. Some 80,000 Knut bears were ordered within just a few months.

Last year's reports of lead-containing toys from China were the last straw for Steiff, which then decided to shut down production in the Asian country.

High quality over low price

Steiff began production in China in 2004 in an effort to cut costs.

To maintain its quality standards, the company sent employees from the headquarters, who "made very detailed specifications and monitored production and materials," said Frechen, who has been trying to boost slipping revenues for the past two years.

Dissatisfied with the results from China, the company, founded by Margarete Steiff in Germany's Giengen an der Brenz in 1880, will now have to pay more to maintain the desired standard in the hopes that customers are also willing to pay more for higher quality.

"We're in the fortunate position that our customers will pay a few euros more for a Steiff teddy bear over a stuffed animal from the competition," Frechen said.

In the toy industry, Steiff represents the exception to the current trend. In 2007, more than three quarters of all dolls, toy cars and stuffed animals sold in Germany had been produced in China, according to the German Toy Association (DVSI).