Lego's new boss grapples with wobbly structureBusiness | 8 Mar 2018
Lego's sales fell last year for the first time since 2004 as the Danish toymaker struggled with tough retail markets in Europe and North America, highlighting the challenges facing the new chief executive.
The privately-owned company, famous for its colorful plastic bricks that childen and adults alike delight in assembling, could be facing its biggest test since flirting with bankruptcy in the early 2000s now that there has been a sudden halt to progress after more than 10 years of strong growth.
Sales fell 8 percent to 35 billion Danish crowns (HK$45.7 billion) in 2017 compared with a 6 percent increase in 2016. It was a far cry from the 25 percent growth achieved in 2015.
The company said overall consumer sales were flat, though figures were affected by a clean-up of inventories that were set high at the beginning of the year in anticipation of growth.
Lego saw "strong double-digit" growth in China, while most established markets in North America and Europe declined. The company will open an office in Dubai this year to help boost sales in the Middle East and Africa.
Lego announced in September it would lay off 8 percent of staff as it pressed a "reset button," acknowledging its business had grown too complicated.
"We're now aligning ourselves, building the foundation and starting to make investments that will bring us back to growth," chief executive Niels Christiansen said. "Probably not the type of supernatural growth we had before, but growing in line with the industry."