Lego said it would lay off 8 per cent of its staff and revamp its business after reporting its first fall in sales in more than a decade on Tuesday.
The Danish toymaker announced a 5-per cent decline in mid-year revenue a month after abruptly removing its chief executive, suggesting it is facing its biggest test since flirting with bankruptcy in the early 2000s.
Lego said it could not promise a return to growth in the next two years, a jolting acknowledgement for a group widely admired for embracing the digital era and tying up lucrative franchises from Harry Potter to Minecraft.
"We have now pressed the reset-button for the entire group," executive chairman Jorgen Vig Knudstorp said, acknowledging the business had grown too complicated.
He would seek a return to a leaner and more efficient organisation to respond to "losing momentum ... which we think could ultimately lead to stagnation or even decline."
Lego said revenues had disappointed in its core markets of the United States and Europe, after a decade of double-digit growth and launches spanning Lego sets, video games, movie franchises, robotics and smartphone applications.
Sales related to its Star Wars line declined slightly in the first half of the year, the company said.
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It marked a sharp reversal for a company that managed to expand and respond to rising demand in Asia when Mr Knudstorp was chief executive, even as the global toy market shrank after the 2008 financial crisis.
Mr Knudstorp, took the top job aged 35 in 2004, a year after Lego flirted with bankruptcy, and set about reviving Lego's core business. That included firing consultants and hiring new designers to come up with higher-margin products that were up to date but still looked like Lego, an abbreviation of the Danish "leg godt", meaning "play well".
Bali Padda took over as chief executive in January, but the Briton was removed just eight months later and replaced by Danish industrialist Niels B. Christiansen.
"I am very much accountable for the situation and for the results we're sharing today," Mr Knudstorp said.
Sales between January and June stood at 14.9 billion Danish crowns, still topping My Little Pony producer Hasbro's sales of US$1.82 billion and Barbie doll maker Mattel's $1.71bn.
Last year, revenue growth slowed from 25 per cent in 2015 to just six percent.
Lego said it would cut approximately 1,400 positions - including up to 600 at its headquarter in Billund, Denmark - the majority of them before the end of 2017. The company currently employs 18,200 people.
"We've been through a decade of very high growth and during those years we have invested a great deal," Mr Knudstorp said, noting that the company added more than 7,000 new positions between 2012 and 2016.
"We have now realized that we have built an increasingly complex organisation to a degree that makes it difficult for us to realise our growth potential," he added.
"What we have unfortunately recently seen is that despite the continued high level of investment, these have not materialised into a good harvest."
The unlisted company said in March that mid-single-digit growth rates were more realistic for the years to come, but revised those expectations downward on Tuesday.
"We are not saying specifically whether we will grow the next two years or not," Mr Knudstorp said.
COMPANY%20PROFILE
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'Ghostbusters: From Beyond'
Director: Jason Reitman
Starring: Paul Rudd, Carrie Coon, Finn Wolfhard, Mckenna Grace
Rating: 2/5
The Gentlemen
Director: Guy Ritchie
Stars: Colin Farrell, Hugh Grant
Three out of five stars
UAE currency: the story behind the money in your pockets
More from Neighbourhood Watch
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
What are the main cyber security threats?
Cyber crime - This includes fraud, impersonation, scams and deepfake technology, tactics that are increasingly targeting infrastructure and exploiting human vulnerabilities.
Cyber terrorism - Social media platforms are used to spread radical ideologies, misinformation and disinformation, often with the aim of disrupting critical infrastructure such as power grids.
Cyber warfare - Shaped by geopolitical tension, hostile actors seek to infiltrate and compromise national infrastructure, using one country’s systems as a springboard to launch attacks on others.
The%20specs
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
Killing of Qassem Suleimani
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
UAE currency: the story behind the money in your pockets
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
'Manmarziyaan' (Colour Yellow Productions, Phantom Films)
Director: Anurag Kashyap
Cast: Abhishek Bachchan, Taapsee Pannu, Vicky Kaushal
Rating: 3.5/5
Voy!%20Voy!%20Voy!
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CONFIRMED%20LINE-UP
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Killing of Qassem Suleimani
Mina Cup winners
Under 12 – Minerva Academy
Under 14 – Unam Pumas
Under 16 – Fursan Hispania
Under 18 – Madenat
No Shame
Lily Allen
(Parlophone)
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The biog:
From: Wimbledon, London, UK
Education: Medical doctor
Hobbies: Travelling, meeting new people and cultures
Favourite animals: All of them
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
COMPANY%20PROFILE
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COMPANY PROFILE
Company name: BorrowMe (BorrowMe.com)
Date started: August 2021
Founder: Nour Sabri
Based: Dubai, UAE
Sector: E-commerce / Marketplace
Size: Two employees
Funding stage: Seed investment
Initial investment: $200,000
Investors: Amr Manaa (director, PwC Middle East)
ENGLAND SQUAD
Goalkeepers Pickford (Everton), Pope (Burnley), Henderson (Manchester United)
Defenders Alexander-Arnold (Liverpool), Chilwell (Chelsea), Coady (Wolves), Dier (Tottenham), Gomez (Liverpool), James (Chelsea), Keane (Everton), Maguire (Manchester United), Maitland-Niles (Arsenal), Mings (Aston Villa), Saka (Arsenal), Trippier (Atletico Madrid), Walker (Manchester City)
Midfielders: Foden (Manchester City), Henderson (Liverpool), Grealish (Aston Villa), Mount (Chelsea), Rice (West Ham), Ward-Prowse (Southampton), Winks (Tottenham)
Forwards: Abraham (Chelsea), Calvert-Lewin (Everton), Kane (Tottenham), Rashford (Manchester United), Sancho (Borussia Dortmund), Sterling (Manchester City)
Quick facts on cancer
- Cancer is the second-leading cause of death worldwide, after cardiovascular diseases
- About one in five men and one in six women will develop cancer in their lifetime
- By 2040, global cancer cases are on track to reach 30 million
- 70 per cent of cancer deaths occur in low and middle-income countries
- This rate is expected to increase to 75 per cent by 2030
- At least one third of common cancers are preventable
- Genetic mutations play a role in 5 per cent to 10 per cent of cancers
- Up to 3.7 million lives could be saved annually by implementing the right health
strategies
- The total annual economic cost of cancer is $1.16 trillion
