Lego wants to build business with girls

By Kim McLaughlin

BILLUND, Denmark (Reuters) - Nine-year-old Ida Fraende, who likes to play with Lego bricks, is not so unusual in Scandinavia but globally speaking she is not typical: Jorgen V. Knudstorp hopes to change that.

The Chief Executive of Europe's largest toymaker, who has brought the once-troubled group back to profit and renewed its growth ambitions, has a keen eye on the market where Mattel and Hasbro of the United States are the mom and pop.

Girls are an area where "we'll never stop trying," Knudstorp, who joined the family-owned firm in 2001 from consultancy McKinsey & Company, told Reuters.

"I think there is something that genetically skews us towards boys, but we can do better."

To win girls over Lego -- whose iconic plastic bricks have entertained children and wounded unwary barefoot parents since the late 1940s -- is working to change its mindset, and taking its bid for their custom online.

The firm founded in 1932 by carpenter Ole Kirk Christiansen intends next year to launch an online Lego Universe, to tap into a booming market that has created successes such as Second Life and World of Warcraft.

The group which started out with wooden toys like ducks and trucks has recovered from a massive 1.9 billion Danish crowns ($388 million) loss in 2004 and managed to build market share in a stagnant global market.

But it still faces intense competition in a global market worth about $50 billion in annual sales, and the challenge of winning over children lured by electronic gadgets such as MP3 players, mobile phones and video games.

"It seems like for children over the age of six that's increasingly where they want to spend their time and less so playing with basic toys," Sterne Agee analyst Margaret Whitfield told Reuters by telephone. "That seems to be where many manufacturers are moving to."

If online worlds sound like a boy thing, Whitfield pointed out many of the new ones from toymakers are actually for girls, noting Hasbro's tests in the fourth quarter last year with Littlest Pet Shop's Virtual Interactive Pets, which it plans to take nationwide in the U.S. this year.

Nine-year old Fraende is unusual in actually preferring Lego to virtual games: "I think it's more fun than electronic games, because you can build all kind of stuff yourself," she said. "You can build horses and stables and play with it afterwards."

Knudstorp said Lego's Belville line, featuring horses and a royal family, does well with girls locally, but Lego has decided to discontinue Clikits, launched in 2003 with interlocking parts aimed at encouraging arts and crafts.

Knudstorp -- who offers a mini-figure of himself instead of a business card -- said Lego made a hospital kit a few years ago with an ambulance and a helicopter but no nurses, female characters or patients.

"For girls there was nothing that appealed to their way of playing. That's going to change. I think we can do a better job," he said.

STAR WARS