Subject:
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A rant on many poor business practices leading to unemployment
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Newsgroups:
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lugnet.lego
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Date:
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Fri, 2 Jan 2004 14:48:57 GMT
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Viewed:
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1566 times
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Ok... here's an interesting article from Australian Financial Review that I
think appeared in a number of other places as well. Article follows at bottom
of post. Highly saddening. Looking at the 2004 catalog pictures makes me think
things are going to get worse rather than better. TLC seems to be continuing
down it's overly licensed, dumbed-down set approach. The only good news in the
article for me was the possible F1 line for the future. (Although what was
wrong with the original Town race sets??? They were pretty much a non-licensed
F1 set where Lego didn't have to give anyone else a share of the profits.) I'd
guess that if Lego makes even the slightest profit on this new license that 99%
of the money goes to Bernie Eccelstone anyhow. :P
Anyhow... I feel bad that Lego has made such poor marketting decisions leading to yet more overly licensed sets which will lead to more layoffs. Yet I see more licensed than non-licensed products in their new catalog. How much money from the classic Castle theme did Lego have to give any other company after P&L were calculated? None. What about classic Space? None. Don't get me wrong... if they want to make a small percentage of their line licensed that's great. I love the Star Wars models. But what if they sold *GASP* both Star Wars and classic Space? It's not like legos go bad per se. If the classic Space set sits on a shelf a bit longer than the Star Wars set but still eventually sells they still get the money,. In fact over the long run they get a greater percentage because Lucas Arts doesn't get their Space money.
Every year it seems there's a different set of themes. IT makes NO sense. Make
new themes. That's great. I love em. But stop discontinuing/putting on hold
or whatever you want to call it the old themes. Just make more not less and not
the same amount. If say in 1990 (this is an example not an exaction) there was
Town, Space, Castles, Technic, and Trains. Then in 1991 Town, Pirates, Castles,
Technic, and Trains. Where it should be Town, Space, Castles, Technic, Trains,
Pirates. See you add more without taking away old. It's called growth. By now
there should be 500 active product lines, not 8. If you sell 1 model from a
theme a year you should not discontinue said line. If I go to a toy store I
should be able to purchase any Lego set from any theme from 1930whatever onwards
and each and every set ever made should be available on hand immeadiately on
demand right there on every store shelf.
But ultimately what Lego is doing is the same thing that every other company
does. Appealing to the lowest common denominator. I suppose I shouldn't be
upset because they're doing the same thing every toy company, TV station, radio
station (baring college and public radio), and game company is doing. But can't
they see what it's doing? Each year people become more sheeplike than the last.
And more fickle. And that's why they keep desperately changing their themes...
trying to keep up with the newest fad. Well... apparently it isn't working.
Good luck finding a new job you poor laid off souls.
-Andy
Lego limps as Christmas disappoints
Dec 30 08:07
AFP
Lego, which has built a toy and game empire from building bricks, warned on
Monday that profits would slump because sales of Star Wars and Harry Potter
products had flopped over Christmas.
Vice director Poul Plougmann told the financial newspaper Boersen that "the
trend throughout the year was unexpectedly bad, nearly catastrophic".
He said that "all the signs of Christmas sales, for toy manufacturers throughout
the world, show an attitude of growing reticence by customers".
He added: "Apart from Denmark, I have not heard anything positive about trends
in the retail trade."
Lego, a family company, signalled that it was heading for its third loss since
it was founded in 1932.
The board had seen the threat back in August after disappointing sales in the
first half, particularly in the United States which accounts for nearly 40
percent of its total turnover.
A key factor was weak sales this year of games based on the Star Wars and Harry
Potter films in 2002, much in contrast to last year's boom.
Christmas sales, which represent 40 per cent of Lego's annual turnover, would be
known in January and would either enable the company to recover or push it into
loss, it said.
In 2000 Lego reported a pre-tax loss of nearly 1.07 billion kroner, the second
loss in its history, resulting in restructuring and job cuts which have reduced
the workforce by 20 percent to about 7,500 people throughout the world.
These changes, and a change of strategy, resulted in a profit of 530 million
kroner in 2001 and 625 million kroner last year.
To face up to tough competition from computer games, Lego began producing in
2002 video films and animated productions based on its successful Bionicle
series, signing contracts with US companies Creative Capers Entertainment and
Miramax Films.
Its film "Bionicle Mask and Light", produced in DVD and VHS formats, got off to
a strong start when it was launched in the United States and Canada on September
16. Lego is counting on similar success in Europe and in the rest of the world.
As part of its diversification, Lego has also signed a partnership agreement
with the Williams Formula 1 Team to connect children to the world of Formula 1
car racing.
But these new products might not be enough to keep Lego in profit.
The board has already sent a signal by announcing the loss of 257 jobs at the
headquarters at Billund in the west of the country and has not ruled out further
such measures in 2004.
On October 27 the company announced that it was preparing a "positive and solid
budget" for 2004.
"Particularly in the United States, the toy market is more dynamic than ever
which means that Lego must demonstrate a vital capacity to react rapidly and
reply efficiently to the needs of our clients and customers," Mr Plougmann said
at the time.
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