Lego admits it makes too many bricks" width="976" height="549">
Danish toymaker Lego has reported its first sales decline in 13 years
Lego brick overload is a problem many parents may feel their children have, but now the toy firm itself has admitted it has made too many. The company said sales and profits had fallen for the first time in 13 years, blaming the weak performance on having to sell off excess stock cheaply.A Lego spokeswoman said it had "too much" stock in warehouses and shops."There wasn't enough room to get 2017 toys into the stores, and the toy trade is driven by newness," she added.The Danish toymaker said dealing with the stock issue, as well as a drop in sales in Europe and North America, had dragged down its performance last year.
Lego Group chief executive Niels Christiansen said there was "no quick-fix" and it would take the firm "some time" to grow long-term.The weak performance comes after Lego cut 1,400 jobs worldwide in September, saying its business needed a "reset".Revenue for 2017 dropped by 8% to 35bn Danish kroner (However, he said the firm's performance had improved towards the end of the year, with sales growing in seven of its 12 largest markets in December.
Lego opened its first Asian factory in China in 2016
The company has been increasing sales in new markets, particularly in Asia.Lego said that it saw "strong potential" in its business in China, where sales enjoyed double digit-growth last year."We started 2018 in better shape and during the coming year we will stabilise the business by continuing to invest in great products, effective global marketing and improved execution," said Mr Christiansen.In September, Lego said its half-year results had suffered because it had stretched itself too thin by diversifying into products that were not toys, such as the Lego movies.Lego chairman Jorgen Knudstorp said at the time that adding complexity to the company had made it harder for the toymaker to grow further. He said that the firm had pressed "the reset-button" for the group with the aim of building "a smaller and less complex organisation".
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