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Mattel Inc. will close a rotational molding plant in Medina, N.Y., by May 31, blaming the sluggish market for outdoor play equipment.

The Hawthorne, Calif.-based company informed 175 employees April 28 that the company will relocate the operation to an Augusta, Ga., facility that has rotomolding as its sole process and, the company said, is more centrally located.

The slow market is ``seen as an industrywide phenomenon,'' spokesman Glenn Bozarth said in a telephone interview. ``We hoped it would be a temporary situation.'' Mattel had made and warehoused outdoor plastic play sets, picnic tables, booster seats and ride-on cars at its 300,000-square-foot site, originally a Fisher-Price plant.

Mattel revamped the Medina operation in 1995, shutting down injection and blow molding lines and laying off 700 workers. The rotomolding operation began in late 1994 and encompassed another 295 employees.

``The shift to rotomolding made sense,'' Bozarth said.

Circumstances got worse. Mattel laid off 40 Medina workers in September, another 75 in March and most of the remaining 175 will not return after May 10. Some two dozen employees will work through May to complete production orders. All 295 are eligible for severance compensation, Bozarth said.

Mattel employed 26,000 as of Dec. 31 and reported profit of $377.6 million on 1996 sales of $3.8 billion.

Mattel is not alone suffering through a slump in sales for large rotomolded toys. Rubbermaid Inc.'s Little Tikes division this month is scheduled to close a 300-employee plant in Aurora, Mo. Wooster, Ohio-based Rubbermaid blamed the decision on sales lost when Wal-Mart Stores Inc. withdrew from the large outdoor furniture market.