Subject:
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Lego Article (Re: I'm famous (or infamous))
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Newsgroups:
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lugnet.general, lugnet.people
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Date:
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Wed, 6 Oct 1999 15:01:11 GMT
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Viewed:
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944 times
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In lugnet.people, Gary R. Istok writes:
> Hey Joseph, Congratulations!!!
> > Just a footnote to this little incident. The information came from an
> > interview I did with a reporter in Denmark for the Bloomberg Newsgroup (like
> > Associated Press but on a smaller, growing scale) about two months ago. It
> > was originally for an article about the growth and current status of the
> > Lego Group (since Bloomberg is mainly interested in business news).
Thanks, Gary.
Here is a copy of the article (portions of it appeared in my statewide
newspaper's business section today). I'm also supposed to do a little
interview with a local radio station on Friday.
THANKS, Poilin!!!
-------------------------------------------
Lego Uses Clothes and Video Games to Rebuild Empire: Spotlight
Billund, Denmark, Oct. 4 (Bloomberg) -- Some people just
never grow up. For Lego A/S, the Danish maker of plastic toy
building blocks, that's a good thing.
Adult men -- some buying toys for themselves -- account for
half of Lego's sales, which totaled 7.68 billion kroner ($1
billion) last year.
Take Utah state computer administrator Joseph Gonzalez, for
example. The 34-year-old father of four is a man who knows his
6285 Black Seas Barracuda -- a pirate ship model -- from his 6949
Robo Guardian, which is from the Spyrius space series, of course.
The self-professed ``Legomaniac'' owns about 300 sets of the
Danish construction bricks, writes reviews for a host of Lego-fan
Web sites and refers to forced lulls in his Lego-building career
as his dark ages.
``It did come to a point where my wife was looking at our
budget and saw how much I was spending on boxes of plastic, and
she had to take a stand,'' Gonzalez says.
Gonzalez is just one participant in the cult following the
plastic bricks have generated in 140 countries since they were
first produced by Danish joiner Ole Kirk Christiansen in 1949.
The name Lego derives from ``leg godt,'' Danish for play well.
Coincidentally, lego also means I put together in Latin.
In a recent survey on Fibblesnork.com -- an unofficial Lego-
fan Web site -- 74 percent of about 1,600 respondents said they
have never considered themselves too old to play with Lego. About
one in seven of the respondents -- adults and young people -- say
they each own more than 100,000 bits of Danish plastic.
Block Trade
Somewhere along the line, though, things have gone wrong for
Lego. Last year, the Danish toymaker posted its first-ever annual
loss. Asian sales dropped 38 percent because of the region's
economic troubles.
Lego's net income fell 150 million kroner below 1998 profit.
The company, which isn't publicly traded, says it lost a net 194
million kroner in 1998 compared with a 62 million-kroner profit a
year earlier. Sales rose just 1 percent from 1997.
Lego Chief Executive Kjeld Kirk Kristiansen is a grandson of
founder Ole and Denmark's second-richest man after the shipping
magnate Maersk McKinney Moeller, according to a ranking published
last year in the Danish newspaper Borsen.
Kristiansen says Lego's inability to react to turbulent
economic times was due to ``too much ballast.'' That ballast is
presumably the 1,000 employees Lego will fire this year to try to
put the company back in the black -- part of a move Kristiansen
calls the Lego fitness program.
By shedding 10 percent of the workforce, Kristiansen is
confident Lego can restructure and become flexible enough to take
on Mattel Inc., Walt Disney Co., Sony Corp. and other competitors
and boost sales by an average of 1 billion kroner a year.
Powerful Friends
To reach that number, Lego is branching out.
The company's multimedia unit is publishing CD-ROM games
based on Lego themes, taking on video games such as those for
Sony's PlayStation.
Lego is selling Star Wars products with the permission of
Lucasfilm Ltd. and Winnie the Pooh toys under license from
Disney. It also is making Barbie-esque dolls and manufacturing a
line of colorful kids' clothes a la Benetton Group's 0-12 line of
apparel.
Legoland theme parks in the U.K. and California -- and, by
2003, in Germany -- echo Lego's original plastic kingdom in its
home town of Billund, Denmark.
Lego has also pinned big hopes on the MindStorms Robotics
Invention System, which is based on a concept by the MediaLab at
the Massachusetts Institute of Technology. The system, which
costs $200, gives budding engineers the software, microprocessor,
sensors and Lego blocks they need to build a robot they can then
program on a personal computer.
Next: Lego Robots
MIT's Lego Papert Professor of Learning Research, Mitchel
Resnick -- the company sponsors his academic chair -- says Lego's
research sponsorship will continue, with the aim of making
smaller, lighter and cheaper robotic systems.
Eventually, Resnick wants to put a computer processor inside
Lego bricks, so that one can interact with another. He said he
sees Lego's future as combining education and entertainment.
``Whereas engineering used to be something that was studied
at university level,'' he said, ``now young kids can learn the
core concepts.''
Gonzalez, the adult Lego collector, agrees that the robotics
system gives kids incredible educational preparation. Still, he's
not convinced he likes the direction Lego is taking. He likes the
traditional model sets and usually buys discontinued collectibles
rather than on new Lego sets.
``The simple construction sets of fire stations, castles and
boats seem to be suffering quite a bit over the past couple of
years,'' he says. A police station set might once have included
300 or 400 pieces but now comes with only a third that number.
``Where's the fun in that?'' Gonzalez asks.
Lego is betting that those good old plastic bricks, combined
with new, high-tech toys, will provide enough fun to shore up the
company's foundations.
--Poilin Breathnach in the Copenhagen bureau (45 33) 32 21 21
rh/ms/
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