12.09-12.11

http://www.heraldextra.com/lifestyles/article_03705fe0-b786-5ccc-9cb2-87fab21da4d0.html
12.09
-- A Lego brick is a Lego brick is a Lego brick.

Except when it's a Lego Star
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(X) Lego controls the construction-toy rights to licensed properties such as "Star Wars," "Indiana Jones" and "Toy Story" whereas its rivals operate in the less overtly edifying sphere of games, dolls, action figures and vehicles.

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Considering their stellar results so far this year were achieved in a lousy economy and up against difficult growth comparisons from a year ago, I'd say the future should be even better," said Sean McGowan, an analyst at Needham & Co., in reply to e-mailed questions.

(X) But the future wasn't always so bright.

There was a period around the millennium when, after more than 50 years of unbroken sales growth, this iconic, mild-mannered, privately-held Danish toy firm had lost its way.

It may have succeeded in putting, on average, five plastic bricks into the homes of each and every one of us on the planet, but it was also trying to be all things to all comers by moving away from products that exemplified the creative, open-ended imaginative play on which it cut its teeth.

In 1998 the firm posted its first-ever loss. Profitable licensing agreements with Hollywood buoyed the business for a few years, but when another loss in 2004 signaled a more sustained slump, it was time to start rearranging the bricks.

12.10

Enter Knudstorp, a former kindergarten teacher and McKinsey consultant tasked with halting a sales decline, reducing debt and focusing on cash flow -- all classic turnaround stuff.
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"The 'retro' aspect is definitely powerful," said Needham's McGowan. "What dad with a 10-year-old son doesn't have fond memories of Lego?"

12.11
A FAMILY AFFAIR

Lego claims that their classic product lines such as Lego City featuring diminutive scenes of fireman, police and hospital workers -- and more recently Lego Power Miners -- give children an insight into how the adult world is organized.
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As for growth, Knudstorp has a stackable line on that too. At the moment, Europe remains its top market, with Germany alone accounting for 20 percent of sales on the Continent, but Lego has its sights set on the U.S. where it wants to gain on rivals like Hasbro and Mattel, and so move beyond its current 3.5 percent share of the U.S. toy market.

(X)
"We want to make North America our second core business. We are growing strongly there, we want to continue doing that despite the economics in North America right now," said Knudstorp.

"In the U.S. you now have a minister of education and indeed a president who recognize that children need 21st century skills, that they need to become creative problem solvers. We can help with that, which is a completely new way of doing business for the well-established Lego brand."