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LEGO® Systems, Inc. sells Enfield complex for $58.9 million, leases office
space.
By:Howard French, Journal Inquirer
01/03/2007
LEGO Systems Inc., has sold its Enfield buildings and leased back space in some
of them for its operations, which are the Danish toymaker’s North American
headquarters, company spokesman Michael McNally said today.
McNally declined to identify the buyer or to disclose any details of the
transaction.
But Enfield Town Clerk Suzanne Olechnicki said today that land records identify
the buyer as Equity Industrial Enfield Limited Partnership, based in Needham,
Mass. The partnership paid $58,880,848 for the buildings in the transaction,
which took place Thursday.
“The buildings were recently sold, and we have entered into a long-term lease on
those we will continue to occupy, which are Compass House on Taylor Road and the
small building on Print Shop Road,” McNally said. “The Lego Creative Childcare
Center will remain in the small building at the corner of Moody and Taylor
roads.
“We are very happy to have found a buyer who was amenable to our desire to
remain at our campus in Enfield,” he said.
LEGO in June announced that it would sell its Enfield buildings and lay off
nearly 300 of its Enfield workers - roughly 44 percent - through March of this
year. LEGO also said it will close its Enfield packaging operation and
subcontract all warehousing, packaging, and distribution to an international
company based in Singapore.
Cuts at its headquarters in Denmark will be even larger, with 75 percent of the
1,200 employees there expected to lose their jobs in 2007, the company
announced.
The layoff decision was part of the company’s ongoing efforts to slash business
costs, LEGO officials said.
The action will result in the layoff of as many as 290 of the Enfield
operation’s 650 employees, according to LEGO officials, who said that all
workers let go will be paid regular wages through the end of March. They also
will be given a severance package including a lump-sum payment based on the
number of years employed, company officials said.
Included in the sale were the distribution center and manufacturing plant. All
of the warehousing and packing work previously done in Enfield has been
subcontracted to Flextronics Corp., which will handle the work at its plant in
Juarez, Mexico, according to LEGO announcement in June.
Distribution of North American products also has been subcontracted to Exel
Inc., a wholly-owned entity of Germany’s Deutsche Post World Net. Under terms of
the deal, LEGO products will be distributed from Exel’s new warehouse in
Alliance, Texas, in the Dallas-Fort Worth area, which is to open this month.
Full distribution of LEGO products will start in April.
Also, LEGO direct-to-consumer (Shop at Home) sales division announced a
partnership with PFSweb Inc. to fill Internet orders of Lego products from its
catalog and online store, according to a statement in December from LEGO Systems
President Soren Torp Laursen.
Beginning in April, LEGO orders will be fulfilled from the company’s warehouse
in Memphis, Tenn.
Financial terms of the deal were not disclosed.
The Enfield changes also are part of the company’s overall supply chain plan
announced in late 2004. Since the 2004 announcement, the company has closed and
moved its plant in Switzerland to its factory in the Czech Republic.
At its headquarters in Billund, Denmark, LEGO also has said that it plans to
gradually shift production to Flextronics’ plants in eastern Europe over the
next three years, affecting up to 900 of the 1,200 current production jobs in
Denmark. In addition, Flextronics took over operations at the LEGO factory in
the Czech Republic in August, company officials said.
LEGO ended all manufacturing at its Enfield plant in 2000, farming that work out
to its plants overseas, leaving only the North American headquarters corporate
functions in Enfield, along with the packing and distribution work that has now
been ended as well.
Once the layoffs are completed in March, the Enfield work force will total about
360, according to McNally.
LEGO also has announced plans to close its existing five distribution centers
in Denmark, Germany, and France, which will mean an additional 213 LEGO job
cuts.
Staff writer Mike Cummings contributed to this report.
http://www.journalinquirer.com/site/news.cfm?newsid=17665125&BRD=985&PAG=461&dept_id=569427&rfi=6
-end of report-
What I have to say is “Ouch!”
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