LEGO Had A Bad Year Because It Made Too Many Dang Bricks

Gladys Abbott
March 8, 2018

The Danish-based toy maker reported an 8 per cent slide in revenue for the calendar year to DKK 35bn (£4.21bn) - the first time since 2004 that sales have shrank.

Operating profits crashed 17 per cent DKK 10.4bn (£1.25bn), and net profit fell by the same percentage to DKK 7.8bn (£940m).

However, it seems as if LEGO's consistent popularity and cinematic exposure haven't necessarily translated into cold, hard cash, as the company has announced (via BBC) their first profits fall in thirteen years, with revenue dropping 8% in 2017 compared to 2016.

Total employment at Lego's North American headquarters operation in Enfield has dropped by 21 percent overall, to 578, down from 735, company spokeswoman Amanda Madore said today, a figure that includes layoffs and attrition.

The weak performance comes after Lego cut 1,400 jobs worldwide in September, saying its business needed a "reset".

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Nevertheless, new CEO Niels Christiansen believes Lego is in better shape than it was past year, even though he also admitted he did not like the results. In December, consumer sales grew in seven of our 12 largest markets and we entered 2018 with healthier inventories. However, we ended the year in a better position.

Lego said that apart from efforts to clear out its build-up of stock, consumer sales were flat, with a decline in established markets in North America and Europe balanced out with growth elsewhere including a double-digit upturn in China.

Lego added that it saw "strong potential" for the business after sales in China enjoyed double digit growth. The blame is being put on the too many Lego bricks and cheaper selling prize. The LEGO Group sees opportunities to return to growth in these regions and will work closely with retail partners to bring LEGO® play experiences to more children.

The company's Lego Ninjago series benefited from the release of the movie in September.

Other reports by LeisureTravelAid

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