Lego’s 2017 turnover slumped for the first time in thirteen years. The Danish toy manufacturer suffered both in North America and Europe, but the new CEO sees a silver lining.
First turnover drop in 13 years
Lego’s turnover dropped 8 % in 2017, reaching 35 billion Danish krona (4.7 billion euro), which is its first turnover slump in thirteen years. Profit plummeted about 25 %, from 9.4 to 7.8 billion krona (about 1 billion euro).
2017 was an eventful year for the famous toy manufacturer. Over the course of the year, it fired former CEO Bali Padda after only eight months in charge and immediately announced it was going to restructure as well. That led to 1,400 people losing their job. On top of that, it suffered disappointing sales, which resulted in stock excesses, which in turn forced the company to hand out discounts.
Improvement on last year
Nevertheless, new CEO Niels Christiansen believes Lego is in better shape than it was last year, even though he also admitted he did not like the results. According to him, the incessant growth led to an enormous and mainly slow organization, which meant it missed opportunities and got stuck in saturated markets.
The block manufacturer sees plenty of growth options in China, the Middle East and Africa, because China did create a decent turnover growth last year. The goal for this year is to open an office in Dubai, to continue its surge on African and Eastern markets.