The Lego Group

From Wikipedia, the free encyclopedia
Jump to: navigation, search
The Lego Group
Type Privately held company
Industry Toys
Founded Billund, Denmark (1932)
Founder(s) Ole Kirk Christiansen
Headquarters Billund, Denmark
Key people Jørgen Vig Knudstorp, CEO
Kjeld Kirk Kristiansen, vice-chairman and majority shareholder
Products Lego
Revenue Increase USD $4,725,558,240 (2013) [1]
Operating income Increase USD $1,550,876,121 (2013)[1]
Net income Increase USD $1,138,413,026 (2013)[1]
Owner(s)

KIRKBI A/S 75%

LEGO Foundation 25%
Employees 11,755 (2013)[1]
Website lego.com

The Lego Group [a] is a family-owned company based in Billund, Denmark,[4] and best known for the manufacture of Lego brand toys.

The company was founded in 1932 by Ole Kirk Christiansen. The word Lego is derived from the Danish words "leg godt", meaning "play well." The word "lego" also means "I gather together" in Latin, and "I connect" in Italian.

History[edit]

First Lego wood models of the 30's, with duck sitting on later Lego brick. (Creation Centre, Legoland Windsor).

The history of Lego spans nearly 100 years, beginning with the creation of small wooden playthings during the early 20th century. Manufacturing of plastic lego bricks began in Denmark in 1947, but since has grown to include factories throughout the world. Today, the company is an iconic brand.

Trademark and patents[edit]

Since the expiration of the last standing Lego patent in 1989, a number of companies have produced interlocking bricks that are similar to Lego bricks. The toy company Tyco Toys produced such bricks for a time; other competitors include Mega Bloks and Coko. These competitor products are typically compatible with Lego bricks, and are marketed at a lower cost than Lego sets.

One such competitor is Coko, manufactured by Chinese company Tianjin Coko Toy Co., Ltd. In 2002, Lego Group Swiss subsidiary Interlego AG sued the company for copyright infringement. A trial court found many Coko bricks to be infringing; Coko was ordered to cease manufacture of the infringing bricks, publish a formal apology in the Beijing Daily, and pay a small fee in damages to Interlego. On appeal, the Beijing High People's Court upheld the trial court's ruling.[5]

In 2003, The Lego Group won a lawsuit in Norway against the marketing group Biltema for its sale of Coko products, on the grounds that the company used product confusion for marketing purposes.[6]

Also in 2003, a large shipment of Lego-like products marketed under the name "Enlighten" was seized by Finland customs authorities. The packaging of the Enlighten products was similar to official Lego packaging. Their Chinese manufacturer failed to appear in court, and thus Lego won a default action ordering the destruction of the shipment. Lego Group footed the bill for the disposal of the 54,000 sets, citing a desire to avoid brand confusion and protect consumers from potentially inferior products.[7]

In 2004 Best-Lock Construction Toys defeated a patent challenge from Lego in the Oberlandesgericht, Hamburg.

The Lego Group has attempted to trademark the "Lego Indicia", the studded appearance of the Lego brick, hoping to stop production of Mega Bloks. On 24 May 2002, the Federal Court of Canada dismissed the case, asserting the design is functional and therefore ineligible for trademark protection.[8] The Lego Group's appeal was dismissed by the Federal Court of Appeal on 14 July 2003.[9] In October 2005, the Supreme Court ruled unanimously that "Trademark law should not be used to perpetuate monopoly rights enjoyed under now-expired patents." and held that Mega Bloks can continue to manufacture their bricks.

Because of fierce competition from copycat products, the company has always responded by being proactive in their patenting and has over 600 United States granted design patents to their name.[10]

Legoland[edit]

The Lego Group built four amusement parks around the world, known as "Legoland". Each park features large-scale Lego models of famous landmarks and miniature Lego models of famous cities, along with Lego themed rides. The first Legoland park was built in Lego's home town of Billund in Denmark. This was followed by Legoland Windsor in England, Legoland California in Carlsbad, US and Legoland Deutschland in Günzburg, Germany. In addition, Legoland Sieksdorf was opened in 1973, but soon closed in 1976.

In July 2005, The Lego Group announced that it had reached a deal with private investment company the Blackstone Group to sell all four parks for €375m to the Blackstone subsidiary Merlin Entertainments. Under the terms of the deal, The Lego Group would take a 30% share in Merlin Entertainments and positions on their board.[11] The sale of the theme parks was part of a wider strategy to restructure the company to focus on the core business of toy products.

In 2010, Merlin Entertainments opened the first Legoland water park at the Legoland California site.

On 15 October 2011, Merlin Entertainments opened their first new Legoland park, Legoland Florida, in Winter Haven, Florida. It is the largest Legoland opened to date at 145 acres, and also only the second Legoland opened in the United States. The second Legoland water park was opened near the same location on 26 May 2012 after only 4 months of construction.

Merlin Entertainments opened their second new Legoland park in Nusajaya, Johor, Malaysia under the name Legoland Malaysia on 22 September 2012.[12] It is the first Legoland in Asia and was quickly followed by another Lego-themed water park in the same area. The first Lego hotel is also planned to open near the park in the first half of 2014.[13]

Merlin Entertainments has also planned several new Legoland parks: Legoland Dubailand, Legoland Nagoya[14] (scheduled to open in 2015), and Legoland Korea[15] (also scheduled to open in 2015). In addition, they have opened four new Legoland Discovery Centres, which take the Legoland concept and scale it down to suit a retail park environment.

Retail stores[edit]

Europe[edit]

October 2002 saw a significant change in The Lego Group's direct retail policy with the opening of the first so-called Lego Brand Store in Cologne, Germany. The second, in Milton Keynes, UK, followed very quickly – several dozen more opened worldwide over the next few years, and most of the existing stores have been remodelled on the new Brand Store template. One of the distinctive features of these new stores is the inclusion of a "Pick-A-Brick" system that allows customers to buy individual bricks in bulk quantities. How a customer buys Lego pieces at a Pick-A-Brick is quite simple: customers fill a large or small cup or bag with their choice of Lego bricks from a large and varied selection and purchase it. The opening of most of these stores, including the 2003 opening of one in the Birmingham Bull Ring shopping centre in England, have been marked by the production of a new, special, limited edition, commemorative Lego DUPLO piece. Lego opened the first brand store in its home country Denmark in Copenhagen on 13 December 2010. There are currently 2 stores in Austria, 1 store in Belgium, 12 stores in Germany, 13 stores in the United Kingdom, 3 stores in France, and 1 store in Denmark for a total of 32 stores in Europe.

North America[edit]

In 1992, when the Mall of America opened in Bloomington, Minnesota, one of its premier attractions was the Lego Imagination Center (LIC). An imagination center is a large Lego store with displays of Lego sculptures and a play area with bins of bricks to build with. The store inventory includes a large selection of Lego sets for sale, including sets which are advertised in Lego catalogues as "Not Available In Any Store." A second imagination center opened at the Downtown Disney at Walt Disney World in Orlando, Florida. Between 1999 and 2005, Lego opened 24 further stores in North America in 23 states. As of 2013, there are 68 Lego stores operating or soon-to-be operating in North America in 27 U.S. States and 3 Canadian Provinces.[16] These stores sell various Lego merchandise, including minifigures, PICK-A-BRICK (where you can buy Lego bricks, paying for brick by the cup), and custom packaged minifigures.

Financial results[edit]

Lego factory in Kladno, Czech Republic, established in 2000. This is one of several sites in the world where Lego toys are manufactured (Denmark, Hungary, China and Mexico are the others).

In 2003, The Lego Group faced a budget deficit of 1.4 billion DKK (220 million USD at then current exchange rates; equal to EUR 175 million),[17] causing Poul Plougmann to be replaced by Kjeld Kirk Kristiansen as president. In the following year, almost one thousand employees were laid off, due to budget cuts. However, in October, 2004, on reporting an even larger deficit, Kristiansen also stepped down as president, while placing 800 million DKK of his private funds into the company.

In 2005, The Lego Group reported a 2004 net loss of DKK 1,931 million on a total turnover, including Legoland amusement parks, of DKK 7,934 million.

For 2005, the company returned a profit of DKK 702 million, having increased its revenue by 12% to DKK 7,050 million in 2005 against DKK 6,315 million in 2004. It also cut expenditures and disposed of amusement parks and a factory in Switzerland.

In 2011, sales for the company grew 11%, rising from $2.847 billion in 2010 to $3.495 billion in 2011. Profit for 2011 fiscal year increased from $661 million to $776 million. The increased profit was due to the enormous popularity of the new brand Ninjago, which became the company's biggest product introduction ever.[18]

2012 saw a 25% rise in revenue over the previous year. More than 60% of its profit was helped by new product launches such as Friends.[19] It was also reported that The LEGO Group had become the world's most valuable toy company ahead of Mattel with a value at over $14.6 billion.[20]

Notes[edit]

  1. ^ Also stylised and trademarked in capitals as The LEGO Group.[2][3]

References[edit]

  1. ^ a b c d "LEGO Annual Report 2013". The Lego Group. Retrieved 9 March 2014. 
  2. ^ "LEGO Annual Report 2011". The Lego Group. Retrieved 9 January 2013. 
  3. ^ "LEGO Homepage". The Lego Group. Retrieved 9 January 2013. 
  4. ^ "About Us". The Lego Group. Retrieved 9 January 2013. 
  5. ^ "Dual Protection for Industrial Designs Confirmed by Court". CCPIT Patent and Trademark Law Office. Retrieved 9 January 2013. 
  6. ^ Lego Group Press Releases at the Wayback Machine (archived March 27, 2009)
  7. ^ More than 54,000 copies of LEGO products were destroyed at the Wayback Machine (archived March 27, 2009)
  8. ^ "Jurisprudence in intellectual property law". The TeleMark. Retrieved 9 January 2013. 
  9. ^ "Kirkbi AG et al. v. Ritvik Holdings Inc.". Telemark. Retrieved 9 January 2013. 
  10. ^ "Interlego's list of design patents". Ipexl.com. Retrieved 2012-10-09. 
  11. ^ "Lego Group in partnership with Merlin Entertainments" (Press release). Lego Group. 13 July 2005. Retrieved 17 September 2010. [dead link]
  12. ^ "PM: Legoland Malaysia to be catalyst for development". thestar.com.my. 22 September 2012. Retrieved 23 September 2012. 
  13. ^ "First SEA Legoland Hotel for Nusajaya". The Sun Daily. 2012-04-25. Retrieved 2012-04-29. 
  14. ^ "Lego planning to build Legoland in Nagoya". [dead link]
  15. ^ "英 멀린그룹, 레고랜드 춘천 1억달러 투자 신고". 
  16. ^ "Lego Stores Home". Stores.lego.com. Retrieved 2012-10-09. 
  17. ^ Frien, Bastian (2012-08-21). "The Disguised Dane. Available Online. Accessed on May 4, 2012". Cfo-insight.com. Retrieved 2012-10-09. 
  18. ^ Author : Roar Rude Trangbæk (2012-03-01). "Lego Group sales up by 17% in 2011". Aboutus.lego.com. Retrieved 2012-10-09. 
  19. ^ http://cache.lego.com/r/aboutus/-/media/About%20Us/Media%20Assets%20Library/Annual%20Reports/Annual_Report_2012.pdf
  20. ^ Metcalf, Tom (2013-03-13). "Lego Builds New Billionaires as Toymaker Topples Mattel". Bloomberg. Retrieved 2013-10-15. 

Further reading[edit]

External links[edit]