Lego Group
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| Type | Private |
|---|---|
| Industry | Toys |
| Founded | Billund, Denmark (1932) |
| Headquarters | Billund, Billund Municipality, Denmark |
| Key people | Jørgen Vig Knudstorp, CEO Kjeld Kirk Kristiansen, vice-chairman and majority shareholder |
| Products | Lego |
| Revenue |  DKK 9.526 billion (2008)[1] |
| Operating income | DKK 1.852 billion (2008) |
| Net income | DKK 1.352 billion (2008) |
| Employees | 5,388 (2008) |
| Website | lego.com |
Lego Group is a Danish family-owned company based in Billund, Billund Municipality, Denmark,[2] 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" which in Danish means "play well". Then in Latin the word means "I put together", while in Greek, "speak".
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Trademark and Patents
Since the expiration of the last standing Lego patent in 1988, 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 [1].
In 2003 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.[2]
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.[3]
Lego Group has attempted to trademark the "Lego Indicia", the studded appearance of the Lego brick, hoping to stop production of Mega Bloks. On May 24, 2002, the Federal Court of Canada dismissed the case, asserting the design is functional and therefore ineligible for trademark protection [4]. The Lego Group's appeal was dismissed by the Federal Court of Appeal on July 14, 2003 [5]. 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.
Legoland
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 oldest Legoland park is located in Billund, Denmark. Others followed: Legoland Windsor in England, Legoland California in Carlsbad, California, and Legoland Deutschland in Günzburg, Germany. All four parks have recently been sold to Blackstone Group, although Lego Group still retains a 30% interest and voting rights.
Retail stores
North America
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.
Europe
October 2002 saw a significant change in 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 Birmingham's Bull Ring shopping centre in England, have been marked by the production of a new, special, limited edition, commemorative Lego Duplo piece.
Economic difficulties
In 2003, the Lego Group faced a budget deficit of 1.4 billion DKK (220 million USD at then current exchange rates), causing president Poul Plougmann to be fired and Kjeld Kirk Kristiansen to take over. In the following year, almost one thousand employees were laid off, due to budget cuts.
However, in October, 2004, as the Lego Group faced an even larger deficit, Kristiansen once again stepped down as president, while placing 800,000 DKK of his private funds in 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 results are a profit of DKK 702 million, thanks among other things to an increase of revenue to DKK 7,050 million in 2005 against DKK 6,315 million in 2004 (+12%), the sale of amusement parks, of a factory in Switzerland and general tightening up. Because the company expects further difficulties in the coming years, it plans to concentrate on profit growth instead of expansion of sales.
References
- ↑ http://cache.lego.com/upload/contentTemplating/LEGOAboutUs-PressReleases/otherfiles/downloadF7A616C11EDF554703D451946115EB1A.pdf
- ↑ "Locations." Lego Group. Retrieved on 16 March 2010.
Further reading
- Henry Wiencek, The World of LEGO Toys. Harry N. Abrams, Inc., Publishers, New York. ISBN 0-8109-2362-9.
External links
- Lego Group corporate information from the company's official website
- U.S. patent for the original Lego brick
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