Denis Poroy  /  AP
Lego Systems owns theme parks in Carlsbad, Calif. (shown here); Windsor, U.K.; Günzburg, Germany; and Billund, Denmark. staff and news service reports
updated 4/6/2005 2:20:55 PM ET 2005-04-06T18:20:55

Struggling Danish toy maker Lego Systems, known for its colored plastic bricks, is putting its Legoland theme parks on the block.

The privately held company said Wednesday net losses more than doubled last year to 1.93 billion Danish crowns ($330 million). Sales fell 6.8 percent to 6.7 billion kroner, or about $1.2 billion.

The Legoland theme parks are located in Carlsbad, Calif., north of San Diego, Windsor in the U.K., Günzburg in Germany and Billund in Denmark.

“In order to be able to concentrate on its core business, the Lego Group has decided — wholly or partly — to find a new owner for the Legoland parks,” the company said in a news release. “In the future, the group’s main thrust will be in the field of classic construction toys, which represent its core business.”

Globally, sales of traditional toys dipped 2 percent, as budget-conscious consumers were less likely to shell out for toys, and when they did, opted instead for consumer electronics such as MP3 players and mobile phones, Lego said. It also cited more competition among retailers, which cut into prices.

The world's No. 4 toy company has been struggling over the past several years as demand has faltered and toy makers have faced overcapacity.

As a result, in addition to seeking to sell off its Legoland theme parks, the company also turned from computer games back to key products, including the bright plastic building bricks for which it is known.

Lego cut costs by more than $259 million last year, Chief Executive Officer Joergen Vig Knudstorp said in a statement. He took over as CEO in October after Kjeld Kirk Kristiansen, owner and grandson of the founder, stepped down and handed over control to 35-year-old Knudstorp.

“At the same time, we increased our competitiveness by working closer with our customers and focusing more sharply on our core products,” Knudstorp said.

He also highlighted the company’s progress on its profit before special items, financial items and tax, which swung into the black, to 103 million kroner ($18 million) after a loss of 1.06 billion kroner.

The company said it expects the profit before special items to rise to 200 million kroner ($35 million) in 2005, on flat sales.

The Associated Press and Reuters contributed to this report.


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