Subject:
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Official statement of the LEGO Group in reply to Wal-Mart Canada no longer selling LEGO products
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Newsgroups:
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lugnet.general
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Date:
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Fri, 8 Feb 2008 07:05:07 GMT
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As you may have already heard, Wal-Mart Canada is no longer carrying LEGO
products. The official statement of the LEGO Group regarding this situation is
below.
LEGO Group statement on developments in Wal-Mart Canada
A recent discussion of pricing strategies, in light of the Canadian Dollar’s
strength, prompted Wal-Mart Canada to de-list the world’s leading construction
toy brand’s products from its shelves starting in January 2008.
The loonie’s increased value against the US Dollar prompted questions as to the
disparity in LEGO product pricing between the United States and Canada. With
headquarters in Europe, the LEGO Group reports its financials in Danish Kroner,
and maintains a manufacturing cost base fixed in Euros. It is therefore
erroneous to look to U.S. pricing as a means of measuring anticipated Canadian
price equivalencies. The prices of LEGO products vary around the world, and are
determined by careful evaluation of local factors such as government taxes,
transportation costs, exchange rates, market conditions and the cost of doing
business.
The European-based LEGO Group has actually seen its profitability erode by the
recent currency market dynamics. Wal-Mart Canada requested Canadian pricing
more closely aligned with U.S. pricing, which, for the stated reasons, would
therefore make LEGO business unprofitable in their stores.
“We do everything we can to deliver the best possible quality, value and play
experience for consumers at the best possible price in all of the 130 countries
where we do business,” said Søren Torp Laursen, president, LEGO North America.
“Historically, the LEGO Group has not changed retail prices as local currencies
fluctuate, and recent developments in the Canadian dollar have not dramatically
altered the fixed costs of doing business in Canada from Europe. Wal-Mart asked
us to significantly drop the price of LEGO products as a result of the loonie’s
current strength, to more closely match U.S. prices, to which we cannot
favorably respond while maintaining a profitable business.”
“Of course, this is a very disappointing development in our longstanding
relationship with Wal-Mart Canada,” continued Laursen. “We are in constant
dialogue with Wal-Mart on this issue, and we hope to eventually bring LEGO
products back to Canadian consumers through Wal-Mart stores, but we are unable
to do business on the current requested terms.”
(Source: John Lotenfoe, Assistant Marketing Manager for LEGO Canada.)
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