LEGO profits beat recession

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LISA MULLINS: They're small and colorful. They're a perennial kid favorite. And they're strewn across many a household floor. We're talking about LEGOs. In spite of the global recession, profits for the LEGO Company jumped 23% during the first half of this year. So what gives? Well LEGO CEO Jorgen Vig Knudstorp believes there are a number of things at work here.

JORGEN VIG KNUDSTORP: The traditional toy market is under a great deal of pressure because children are finding that they have less time to play and when they play they are also using electronic toys quite a bit. But I do think certain activities such as reading a great book or playing a game of soccer or any other kinds of sports is activities that will never go out of fashion. And I think LEGO belongs in that category because it allows children to be finding their inner creative urge which is the urge to create something where they can say this is something I did on my own. It's a universal joy of building things up and�

MULLINS: And tearing them down. There's a certain joy in that I think as well. But you know tie this then�

KNUDSTORP: Absolutely.

MULLINS: Tie this to the economy.

KNUDSTORP: Generally we're not tied to development in the economy and for two reasons. One the consumption of toys is a very small item in households in general and secondly I think a brand like LEGO is of known durable quality which we find a lot of families return to when times are tough.

MULLINS: It's just interesting to note that you know it's so popular in so many places. I can imagine there have to be some cultures where it just doesn't work.

KNUDSTORP: No it's not the case. You know I've had Chinese professors, Japanese professors, Korean professors, education minister of Singapore telling me that LEGO was really an Asian idea. And I'm just smiling because it's great to be part of something that is really universal. I don't think a lot of products could claim to be that.

MULLINS: Do you tailor the designs � even the designs on the boxes I assume in terms of what can be built � do you tailor them to different cultures?

KNUDSTORP: We really don't tailor this to particular cultures. Most of the sets I would say, if anything, they have a continental European flavor to it. The Scandinavian influence in the design is quite visible. And I think we should keep it that way because that's our heritage.

MULLINS: That's the heritage. Maybe you can talk a little bit about that heritage. I mean this all started with a Danish carpenter.

KNUDSTORP: Correct. The founder was a carpenter who actually founded LEGO because he found himself in the middle of the great depression in 1932 and could no longer build houses and furniture so he started producing toys.

MULLINS: Do you mind if I ask you how old you are?


MULLINS: Forty-one. So you may have played with LEGOs as a kid.

KNUDSTORP: Oh yes absolutely. I grew up on LEGO and joining LEGO eight years ago was to me [INAUDIBLE].

MULLINS: Maybe if you have kids, your kids might feel the same way. Especially if they're a part of the test department.

KNUDSTORP: Yeah. I do have four children aged two to eight and they're quite excited but they're also too spoiled with the LEGO toys. They think it comes too easy.

MULLINS: That's Jorgen Vig Knudstorp who's the CEO of LEGO. The company reported a 23% increase in net profits during the first half of this year. Nice to talk to you.

KNUDSTORP: Thank you very much for having me.