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Toy maker to divest four parks including the one in Carlsbad
Struggling to regain its financial footing, toy maker LEGO® Company said
Thursday that it plans to transfer its LEGOLAND parks, including the one in
Carlsbad, to a separate company as the first step toward a sale.
The announcement came as the legendary Danish company said it has yet to recover
from its financial stumbles in 2003 and has recorded poor sales in Japan and the
United States this year. The privately held, family-owned company is expected to
record a pretax loss of $33.8 million to $67.7 million for this year.
LEGO said it wants to focus on its primary business of toys and will divest a
number of its assets, including its LEGOLAND parks, which are in four locations
worldwide. The others are in Billund near its corporate headquarters in Denmark,
outside London and in southern Germany.
Executives at LEGOLAND in Carlsbad said the future ownership structure is
undetermined. One possibility is a transfer of ownership to an investment
company owned by the Kristiansen family, descendants of LEGO founder, Ole Kirk
Christiansen. John Jakobsen, president and general manager of LEGOLAND
California, said he was excited about the possibility of an ownership change. “I
have been with the LEGO Company for more than 19 years, and I feel this is the
right move for LEGOLAND California,” he said.
As part of the larger changes at LEGO, Kjeld Kirk Kristiansen, the company’s
chief executive for the past 18 years and the founder’s grandson, resigned and
will be replaced by Joergen Vig Knudstorp, a former senior vice president of
corporate affairs. Knudstorp said the parks now tie up about a third of the
company’s capital and only account for about a seventh of its sales.
Still, Kimberly Clark, a spokeswoman for LEGOLAND California, said the park,
which opened about five years ago, continues to improve its attendance and its
financial performance. Last year, LEGOLAND had 1.3 million visitors, and Clark
said attendance this year is running about 10 percent higher. LEGOLAND does not
reveal its revenue figures, but Clark said it is expecting double-digit
improvement this year. LEGOLAND had 1.45 million visitors in 2000, according to
Amusement Business magazine, an industry trade publication that ranks attendance
at North America’s top 50 theme parks.
Dennis Speigel, president of International Theme Park Services, a consulting
firm, said LEGOLAND has a high-quality product but it appeals to a limited
segment of the population: families with small children. “People have always had
a good experience there,” Speigel said. “It is a very narrow demographic. It
does not appeal to teenagers or adults.” Speigel predicted that few U.S.
companies in the theme park business would be interested in the LEGOLAND
properties because many face their own financial struggles.
Six Flags, which owns 31 theme parks, has more than $2 billion in debt, and its
attendance is sagging. Cedar Fair, which owns Worlds of Fun and 12 other theme
parks, is not in expansion mode, Speigel said. Walt Disney is doing well but
probably wouldn’t be interested in LEGOLAND because it is focused on its own
brand.
LEGO biggest problem is that it entered the amusement park business after it had
peaked, he added. “They missed the boom, which was in the ‘80s and ‘90s,”
Speigel said. “But it’s an excellent product.”
-end of report-
www.signonsandiego.com/news/business/20041021-2147-lego-staff.html
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Message has 1 Reply:
 | | Re: All four LEGOLAND® parks put on the block
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| (...) This may not be a bad thing. Having a separate company gives TLC a chance to be a partner, which could work out really well. Tokyo Disneyland and Tokyo DisneySea are not owned by the Walt Disney Company, but by the Oriental Land Company. (...) (20 years ago, 23-Oct-04, to lugnet.mediawatch, FTX)
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