Lego’s sales drop for the first time in 13 years
(CNN Money) — How’s this for bad luck: Lego sales have dropped for the first time in 13 years.
Annual revenue dropped 8% in 2017, the Danish company said Tuesday, ending a long streak of rapid growth powered by the success of its Star Wars products and “The Lego Movie.”
Lego said that sales were particularly weak in North America and Europe. Profits also fell by 17% last year.
“Overall we are not satisfied with the financial results,” said CEO Niels Christiansen. He acknowledged that Lego had grown too big and complex, and said he would work to stabilize the business in 2018.
“There is no quick fix and it will take some time to achieve longer term growth,” he added.
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 product line helped generate record revenues in 2015 and 2016. But its success may have limited demand last year.
“Households can have too many Lego products and not want more each year,” Hudak said.
Lego tried to replicate the strategy in 2017 with offerings tied to “The Lego Batman Movie” and “The Lego Ninjago Movie.”
The products flopped, however, fueling the retrenchment.
Lego announced in August that it would replace Bali Padda, its first non-Danish CEO, after just nine months in the job. The following month it cut 1,400 jobs, or roughly 8% of its workforce.
Lego sales have quadrupled since 2007. In 2014, the private company topped rival Mattel to become the world’s top toymaker in terms of sales.
“It’s grown so quickly with only one product that it inevitably had [to] slow down and hit a wall,” Hudak said.
Lego it still owned by the Kirk Kristiansen family who founded it in 1932.