In 2003, LEGO nearly went bankrupt. But a decade later, business is going almost too well, forcing the company to do something rather unusual: discourage customers from buying its products.
That’s right — the 67-year-old Danish toymaker (which has seen revenue increase by an average of 15% a year for the past 12 years) aggressively scaled back its advertising efforts last year because demand was simply too high.
Time to prep for the future and catch a much-needed breather
Or as CFO John Goodwin puts it, “We are of course excited about [LEGO’s success], but the high demand also puts a strain on our factories… We feel we need to invest, to build some breathing space.”
They’re hiring like crazy, too. Fun fact: One in four of LEGO’s 18,500 employees joined the company in the past 6 months.
Take a step back, retool for the future, and continue towards the ultimate, long-term mission of serving as many children, in as many parts of the world, as possible.
And by the way…
Not many companies have the luxury of doing this (aka. sacrificing short-term profits in favor of long-term goals).
Most companies — including their chief rivals Hasbro and Mattel — have shareholders to answer to every quarter. But LEGO’s family-owned.
In fact, it wasn’t until 2004 that LEGO hired a non-family member as CEO… which we can only assume was because his name, Jørgen Vig Knudstorp, is just so darn fun to say.
Editor’s note: Before you get upset, LEGO is supposed to be all caps even though it looks weird. It’s a trademarked name that started as an abbreviation off 2 danish words, “leg godt”, meaning “play well.” Also, they prefer “legos” to be called “LEGO bricks.” So there you have it.