News Article | 5/21/2010

Big expansion for Lego Systems at Alliance hub


Lego Systems Inc. has snapped together an expanded lease at Alliance Global Logistics Hub, giving it nearly 600,000 square feet. The toymaker has leased 596,000 square feet at Alliance Gateway 60 building at 300 Freedom Drive in Roanoke; it will vacate 402,000 square feet at the Gateway 62 building down the street.


Strong sales of Lego products triggered the need for additional space, said Julie Stern, Lego brand relations manager. U.S. sales jumped 31 percent last year and 38 percent in 2008, she said.


“We’ve definitely had a few very good years,” she said.


Lego’s success is mirrored in national trends. According to NPD Group, a New York-based market research firm, national sales for traditional toys grew 4 percent to $4 billion in the first quarter of 2010, compared with the first quarter of 2009. The category seeing the most growth is building sets, which jumped 25 percent to $251 million.


Lego’s facility, near Fort Worth Alliance Airport, serves as Lego’s sole North American distribution center, receiving products from the company’s production plant in Monterrey, Mexico and shipping them to retailers throughout the United States and Canada, Stern said. She declined to release information about the volume shipped through Alliance, the employment numbers there or whether new jobs will be added with the expansion.


A private, family-owned company, Lego is based in Billund, Denmark; it was founded in 1932. The company’s North American headquarters is in Enfield, Conn.


Dan Cook with Cushman & Wakefield of Texas represented Lego in the deal, and Tony Creme represented Hillwood, Alliance’s developer.


“I think it says a lot about Alliance and the advantages of Alliance that a company like Lego decides to put one distribution center in America and they choose to put it here,” Creme said.


Lego Systems’ distribution is managed by Excel Inc., a third-party logistics company that operates in about 2.5 million square feet of space within Alliance with about six big customers there.


Expanding at Alliance makes sense for Lego, said Terry Pohlen, associate professor of logistics and director of the Center for Logistics Education and Research at the University of North Texas. In addition to the Foreign Trade Zone benefits, outbound trucking rates are low because the Dallas-Fort Worth area consumes more than it produces, he said.


“It’s a great location in terms of redistribution,” he said. “You can hit virtually any point within the United States within two days of driving.”