LEGO's revenue declines for the first time in 13 years

  • LEGO's revenue declines for the first time in 13 years

LEGO's revenue declines for the first time in 13 years

Reassuringly expensive plastic brick maker Lego was forced to write down a load of stock in 2017 - a move that rocked its bottom line - as it produced blocks that some customers clearly didn't want to build with.

They've had some success with digital forays before (2014's "The Lego Movie" grossed $470m at the box office) - but if history is any indication, the company would benefit from sticking to its core product: the good 'ol fashioned, colored bricks of yesteryear.

Niels Christiansen, chief executive of the privately-owned Danish company, said Lego had ended the year with growth in most of its main markets and started 2018 "in better shape". Profit plummeted about 25 %, from 9.4 to 7.8 billion krona (about 1 billion euro).

"2017 was a challenging year and overall we are not satisfied with the financial results", Mr Christiansen said.

Revenue in established markets, like North America and Europe, declined in 2017, while sales increased by high double-digits in China, he said.

Euromonitor toy analyst Matthew Hudak said the sales decline comes after the company scored a major win with Star Wars toys tied to the release of "The Force Awakens".

The block manufacturer sees plenty of growth options in China, the Middle East and Africa, because China did create a decent turnover growth previous year. The blame is being put on the too many Lego bricks and cheaper selling prize. LEGO is more popular than ever in those mediums, but the product just hasn't seen it translate into the more tangible toy market.

The results come after Lego announced in September that it was cutting 1,400 jobs, or 8% of its global workforce in an effort to "reset the company". In August, the company's former CEO Bali Padda stepped aside after only eight months of service, reportedly because of his age.

A LEGO spokesperson, however, told Gizmodo in an email that while annual revenue dropped, consumer sales "remained steady". In 2014, the private company topped rival Mattel to become the world's top toymaker in terms of sales.