They already have contracts or partnerships with Warner Bros., Disney, Rovio, and other high-profile firms to roll out toy lines or video games of powerful franchises. Lego doesn't need to waste time poking around the public markets. So why change? From management's perspective, why raise money from the public markets and resign much of your control over the company, when you can keep the insanely profitable Status Quo? As the proverb goes, "if it ain't broke, don't fix it." Demand is so strong that Lego is struggling to keep up. Lego is officially now the world's largest toymaker, passing up Mattel. Lego's private owners have historically resisted calls to go public, and have rebuffed such measures as recently as February of 2015, where the Lego Movie had significantly boosted results. Lego's managers are not willing to transfer control of the firm from their hands to potentially millions of institutional and individual investors. Even a casual reading of Lego's history will show you how much the owners of Lego want to keep a tight grip on running their company. You see, Lego has been a family-owned business for a long time. Why is this the case? The answer largely lies in one word: control. Unfortunately for potential Lego investors (like myself), it seems that management is still firmly against the idea and won't be going public in the near future. Potential Lego shareholders have been agitating for years to bring Lego to the public markets, so with Lego awash in cash now, and standing strong with future offerings, wouldn't it be a good time for the firm to go public with an Initial Public Offering (IPO)? It has certainly made a great comeback from when the firm was on the verge of bankruptcy around 2004, and like Disney, has the remarkable ability to virtually print money from various franchises, toy lines, theme parks, and video games. So, Lego is in a very good spot right now. It's a little bit overwhelming for even a young person like myself who isn't a fan of all of the franchises involved. A visit to the Wikipedia page on the game shows the immense number of franchises involved and the large number of toy packs and associated paraphernalia. In Lego Dimensions, Lego figures and a portal can be played in the game itself. The upcoming Lego Dimensions for PS3/4, Xbox 360/One, and the Wii U should prove to be a highly lucrative and appealing concept, as it's riding the wave of the "toys-to-life" phenomenon that Activision Blizzard ( ATVI) started with Skylanders. It's worthy of note that Lego also already has a lucrative foothold in the video game market, with Lego-related games selling over 100 million copies. The videogame, developed in cooperation with Warner Bros., is Lego´s entry ticket to the billion dollar toys-to-life market, which ties toys to videogames by letting physical action figures unlock new characters and levels inside the games. The company is also betting on a new videogame, Lego Dimensions, which will reach stores later in September. In the second half, Lego expects its long running Star Wars franchise will get a boost from the new Star Wars movie, premiering in December, according to Chief Financial Officer John Goodwin. saw first-half revenue fall 4.9% to $1.91 billion as Barbie sales slipped. Lego said the underlying revenue growth of 18% was encouraging because it compared with a strong first-half in 2014, during which products derived of the Lego Movie had boosted sales. The fluctuations have had "a significant impact on our results, with our Danish krone-reported sales figures increasing an additional 5% purely due to currency movements," Lego said in a statement. Lego said the rise in earnings was fueled by strong sales of its Lego Ninjago and Lego Elves sets, but also the weakness of the Danish krone and the euro against most major currencies. Lego saw its profit jump 31% in the first half of 2015 from last year, while revenue rose 23%. It would be no exaggeration to say that Lego is the Disney ( DIS), the Starbucks, or the Apple of the toy realm (i.e., the dominant brand in its main industry).ĭespite concerns about the traditional toy market due to mobile games, and decreasing revenues at rival, Mattel ( MAT), Lego turned in impressive results in its last financial statement. The company has an unbelievably strong brand to bankroll its operations and to produce enduring memories for children (and in many cases, adults) around the world. Danish toymaker The Lego Group is the producer of the ubiquitous Lego blocks.
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