Knudstorp engineered what has been called the greatest turnaround in corporate history through a return to basics. Theme parks, jewelry, clothing and all sorts of products that Lego had no expertise in were dumped and he halved the number of individual Lego pieces, which had expanded from the Mondrian-inspired palette of yellow, red and blue to more than 50, notes Davis in his article. Knudstorp also encouraged engagement with fans—the Ideas platform is one example—which had been frowned upon within the company. The result was a return to consistent growth, climaxing in 2016 when the company recorded the highest revenues in its 85-year-history. Then, things went south.
In 2017, Lego suffered its worst financial performance in more than a decade, reported the Financial Times in Sept. 5, 2017. “Revenues fell 5% in the first half of the year, their first decline since 2004. It follows years of rapid growth that had made Lego the world’s most profitable toymaker and the second largest by sales,” reported the FT. Lego would end the year with an 8% drop in revenue to $5.8 billion. The company also eliminated 1,400 jobs.
The company’s focus in 2018 will be on growth, said current CEO Niels B. Christiansen in March of this year, when he announced the 2017 financial results. Christiansen replaced Bali Padda, who succeeded Knudstorp, at the top spot in 2016. Padda only lasted eight months.
Lego has been there before and it bounced back mightily under the right stewardship. As long as they're making kids, I’m betting that, in time, everything will be awesome again for Lego.
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