One of the first things he did was fly to Virginia for BrickFest, the annual convention for adult fans of Lego (AFOL, as they're known). But he was resolved not to throw out the baby with the bath water. Sure, costs needed cutting - and cutting fast. Knudstorp was determined not to take a simple slash-and-burn approach. And Knudstorp likens the effect to that of a heart attack: 'We needed a permanent change in our lifestyle.' In Britain, its success was particularly remarkable: last year saw a 51 per cent growth in sales and an increase in market share from 2.2 per cent to 3.3 per cent - all in the teeth of a grim recession, and at a time when the world toy market was continuing to shrink.Īs with the global catastrophe of the past couple of years, which was caused by bad credit and unrealistic ambitions, Lego's problem was that it had overstretched itself. Minifigures are assembled on the production lineįirst, though, I met Lego's CEO Jorgen Vig Knudstorp, who told me how within four years he managed to turn this ailing loss-maker into a lean, streamlined moneymaker with net profits in 2008 of £163 million. And I toured the factories that manufacture and box billions of Lego pieces every year. I visited the town where its toys have been made by the Christiansen family since 1932, and met the designers responsible for some of the must-have kit you may have bought for this Christmas (Space Police, Power Miners), as well as the newer sets your kids will be clamouring for next year.
Yet against the odds, Lego managed to put itself back together. With massive debts almost equivalent to its annual sales, the near-bankrupt firm seemed destined to end up like those unloved playthings in Toy Story: battered, broken and at the mercy of a ruthless, unappreciative new owner. In 2003 sales had fallen off a cliff, dropping 35 per cent in the US and 29 per cent worldwide, culminating a year later in the biggest loss in the company's history: £217 million. In 2004, Lego was in pieces, with predatory private-equity firms circling like sharks to snap up the ailing, family-owned business - if, that is, the American giant Mattel didn't gobble it up first. The Billund factory's 'Cathedral' warehouse, which is 'manned' by eight robots and 15 automatic cranes Yet five years ago, the impossible happened. You'd think it would be impossible to to go wrong with a brand as beloved as that. Every second, seven new boxes of Lego are sold for every person in the world, there are 62 Lego pieces Lego people - mini-figures, as they're known - outnumber real people. Since its first interlocking brick was launched in 1949 it has become more popular than any toy in history. I don't burst into tears - as more than one adult visitor has done - but I definitely feel a catch in my throat and a moistness in my eyes as I see, arrayed before me, my early childhood: the ambulance set, the police car set, the Shell garage set, all exactly as I remember them from more than 35 years ago. The label on the shelf reads 1972, when I would have been seven years old. She slides back one of the cabinet walls, each of which has shelves piled high with old Lego boxes in mint condition. She leads me into a basement room, mostly comprising a floor-to-ceiling, gunmetal grey filing system.
I ask my guide Jette Orduna, head of Lego's archive, what's in there, but she won't say. This machine, one of several similar ones in the factory, can paint different expressions on each side of the headsīeneath the Lego museum at the Lego headquarters in Billund, Denmark, is a locked, secret room whose contents have been known to make grown men cry. Minifigure heads on the Lego production line in Billund, Denmark, where two million Lego pieces are made every hour.
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