Lego Co. wants to sell Legoland parks

Posted Friday, October 22, 2004 9:21 AM | Contributed by supermandl

Struggling to regain its financial footing, toy maker Lego Co. said Thursday that it plans to transfer its Legoland parks to a separate company as the first step toward a sale.

Read more from The Union-Tribune.

Friday, October 22, 2004 9:49 AM
I wonder who's gonna buy the parks....
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Friday, October 22, 2004 10:01 AM
Maybe these guys will? ;)
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Friday, October 22, 2004 10:08 AM
Now there's a great opportunity for Great American Family Parks (or, whatever that company is calling itself this week...)

The Lego parks will probably end up going to a group of investors, or some REIT. However, as far as existing operators go, I could see this a good match for Disney. There's already a relationship there with the Lego stores at Downtown Disney that seems pretty successful.Joel*** This post was edited by JZarley 10/22/2004 10:10:44 AM ***
*** This post was edited by JZarley 10/22/2004 10:11:11 AM ***

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Friday, October 22, 2004 11:47 AM
Does anyone know if the parks are actually profitable, and the Lego corp. just needs focus, or are the parks a lead weight on their balance sheet?
I think LEGO is a good example of the problem with the business world's obsession with growth. LEGO was a highly profitable company who did one thing and did it really really well. Then they started trying all sorts of gimmicky sub brands to grow their business and they got into big trouble. (Hmm... sounds like Disney?)
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Friday, October 22, 2004 12:20 PM
Anyone who buys them would have to do alot to the parks to "un-LEGO" them since the LEGO theming is integrated into just about everything.
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Friday, October 22, 2004 1:03 PM
I would have to guess that while Lego would sell the parks, the new owners would receive the licensing as to not change the parks in any way. Without the Lego name and theming, these parks really have no draw IMHO.
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Friday, October 22, 2004 1:19 PM

Does anyone know if the parks are actually profitable, and the Lego corp. just needs focus, or are the parks a lead weight on their balance sheet?

Just read the article:

"..the parks now tie up about a third of the company's capital and only account for about a seventh of its sales..."

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Friday, October 22, 2004 1:34 PM
Maybe possibly Fox Studios could purchase the chain of parks...

...then they could rename it "Blocko Land" :)
At least they wouldn't have to untheme any of the rides & attractions

-

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Friday, October 22, 2004 1:54 PM
Gonch,
That still doesn't say if it's profitable.
LEGO is a company without many physical assets, aside from the parks.

For example, say they were looking to sell the whole company. You do a a list of assets. Part of this is physical... The machinery and buildings used to produce the toys, for one. Also, the real estate and rides of the parks. Obviously, a disproportionate amount of capital is tied up in the parks, since the toys and machinery themselves don't represent much actual, physical value.

The REAL value of LEGO is in its brand name. That doesn't get listed on the balance sheet the way that 200 acres of land in Carlsbad, CA does.

Theme parks are a capital intensive proposition. That doesn't mean they can't also be a good business.. although at only 1.4 million visitors a year (about the same as Kennywood) it probably isn't a good business, compared to the amount of money they put in.

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Friday, October 22, 2004 2:07 PM
Gonch, GAFP might buy 'em. you could be right and i wouldn't bet against it...
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Friday, October 22, 2004 2:31 PM
>>Gonch, GAFP might buy 'em. you could be right and i wouldn't bet against it...

Only if GAFP can talk them down to $428K as a purchase price (the financing they've secured so far according to their release). A deal like would make it look like CF overpayed for GL...(

(I really wish I could figure out how to use emoticons on this site...)Joel
*** This post was edited by JZarley 10/22/2004 2:45:11 PM ***

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Friday, October 22, 2004 5:20 PM
Cedar Fair! Cedar Fair!
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Friday, October 22, 2004 8:07 PM
Just sounds like Lego is having hard times:

http://www.cbc.ca/cp/business/041021/b102174.html

Which is unfortunate, thought Legoland was one of the better run parks I've been to, as far as maintenance, cleanliness, custom service, even the food was excellent. I'd compare the service to a BG park, which would be my first choice for new owners.

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Saturday, October 23, 2004 12:12 AM
It really has nothing to do wiht the parks themselves. Their core business is what is draining them. The toy market has been doing poorly for several years now. Even the mighty Toys R Us is in serious financial straights. Now that the patents have run out they are facing stiff competition from several lines of Lego compatible toys that are made in China at the fraction of the cost of the Danish and US made Lego products. But regardless of who made them people invaribly call them "Legos". The parks were an excelent idea, very well executed and run. I see the family holding on to them through a seperate holding company. Lego is a privately held company, with a large share of the business owned by the family of the founder. However, I surmise that this move is being forced by the non family shareholders. Hopefully things will equalize out soon (I have a resume pending there!).*** This post was edited by Dutchman 10/23/2004 10:45:13 AM ***
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