Due to increasing losses, the Danish manufacturer of the much-loved Lego building blocks is giving up its signature theme parks.
German Legoland is on the block
Family-owned Danish toymaker Lego Systems announced Wednesday that due to net losses that doubled over the past year, the company would shed themselves of their four theme parks.
A mother shows her daughter a model of the Berlin Reichstag in Legoland
The parks, in Billund, Denmark, Windsor, England, Carlsbad, California and Günzburg, Germany, feature such attractions as miniature replicas of cities and safari parks with animals and dinosaurs, all made out of millions of Legos.The first such park opened in Denmark in 1968. It is not yet known what the asking price for the parks will be.
Total sales declined 6 percent to $1.36 billion (1.05 billion euros) in 2003 because of intense price competition and a decline in demand as customers turned to more high-tech gadgets, Lego said in a statement.
"It is a positive development that we managed to improve our result before special, non-recurring items ….and in global terms halted what had been a decline in our market," Lego said, adding that the company cut costs by more than $259 million last year.
Profits to rise
Legoland in Denmark
This year, the company said it expects unchanged earnings and profit before special items and tax are factored in but it expects profits to rise to $35 million in 2005 because of a drive to cut costs.
Company officials said they want to turn back to their basic products such as the Lego blocks and away from products such as computer games.
The company restructured last year in a move that included cutting hundreds of jobs and is considering moving some production to eastern Europe or Asia, which have lower wages. They had not done so before because of a loyalty to the Danish city of Billund, where they employ thousands of workers.
Lego was founded in 1932 by Ole Kirk Christiansen who began with wooden toys. In 1958, the company made its first Lego bricks, which went on to become one of the most popular toys of all time.