Lego’s 2017 was perhaps as painful as stepping on one of the toymaker’s loose bricks.
The company announced Tuesday that sales fell 8% to 35 billion Danish kroner ($5.8 billion). The decline brings an end to thirteen years of growth, capped by 25% growth in 2015 and 6% growth in 2016. In a statement, Lego CEO Niels B. Christiansen said the decline was primarily in established markets and caused by excess inventory. A spokesperson added that the excess stock, which had to be sold cheaply, prevented new toys from hitting the market in a timely manner, saying “the toy trade is driven by newness.”
The decline does not come as a surprise after a tumultuous 2017. In August, the company’s former CEO Bali Padda stepped aside after only eight months of service, reportedly because of his age. In September, the company announced it would cut 1,400 jobs—8% of staff—by the end of the year amid falling sales. The pre-holiday season release of the “Women of NASA” Lego set provided some late success, but evidently not enough to turn the tide.
It’s not all bad news though. The company saw double-digit growth in China and the declines in established markets were not caused by declining consumer sales, but rather the value of those sales. The company is no stranger to a slump, having teetered on the edge of bankruptcy in the early 2000s before the 13-year growth streak.
