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You must forgive me, but I’m pretty sure the dire straits occured much after they acquired the Star Wars license.
And expansion of the Bionicle strategy, the first truly multimedia line they ever did, in addition to robotization, an expansion of the factories, and a stop of trying to enter into markets they had no experience running simply to exploit whatever good fame the name Lego had seem to be the real difference between old/dying Lego and new/growing Lego. Add to that better quality stuff, a greater focus on retention of the aging builders who now want to build something bigger and better, plus some pretty clever marketing, and you got a company rolling in cash.
@Soarinjack
Generally speaking, the only good merger are those that create pseudo-monopolies, so I’m not even sure what angle was the Hasbro dreamworks going to get to.
Oh, and before anyone gets the wrong impression. I live less than 25 km from Lego headquarters in billund, and know several employees there. I know this isn’t a fairy tale story, their comeback is based just as much in Power point presentations and cynicism, as it is in embracing consumers, responding to market demands and delivering good products.
That still doesn’t automatically make this merger a good idea.
That’s kind of the point: Lego has made such a ridiculous comeback, it’s almost uncanny.
Not only have they almost tripled their turnover in less than a decade, they have increased their profitability as well. Turning a $220m deficit into almost $1b surplus before taxes in the same span of time. All by selling reskins of the same basic product.
Opposite this you have Mattel/Hasbro kinda stagnating lately, while still selling everything they can get their hands on.
I’m not saying either is right or wrong, just this merger rumor smells a bit like Hasbro panicing to defend their position on the list. And as I said, most mergers take a very long time to pay back the investment (if they ever do).
Lego was being badly undercut by Megablocks and the other clones, because injection molding is expensive in Denmark.
A Mexican factory and Star Wars license later, along with replacing nearly all the Dane and Czech workers with robots, and Lego is rolling in cash.
>overtaken by Lego
I know that Lego has a whole range of different Lego’s to work with, but we are still talking about a company which just reskins their toys having overtaken two others which can, and do, sell whatever can possibly sell. And to think a few years back Lego was in such a terrible financial position they had to sell everything that wasn’t part of the core lines to survive.
And, yeah, not really surprised Hasbro share holders reacted this way. Not just because Dreamworks might be in a bad situation, but more of the fact most mergers don’t deliver on their promises. And considering Hasbro (and Mattel) recently were overtaken by Lego on the list of Worlds Largest Toy Companies, this seems like a panic move to defend their position.
lost it
I gotta say, though, I’m a bit surprised by how hard Hasbro’s shareholders NOPE’d at this deal. Maybe the rumored valuation was a bit high, given DreamWorks’ surprisingly crappy financial position, but the fundamental idea is not entirely insane for a company that’s trying to expand its media footprint.