Lego redeploys chief after good run
THE MAN who pulled Lego out of an existential crisis to turn it into the world’s most profitable toymaker is stepping down as chief executive and will instead lead a new branding division within the group.
Chief executive Jorgen Vig Knudstorp woulld be replaced by chief operations officer Bali Padda at the end of the year, Lego said yesterday.
The company, which has its headquarters in western Denmark and is controlled by the billionaire Kirk Kristiansen family, brought in Knudstorp in 2001 after he had worked for them as a McKinsey consultant.
When he was promoted to chief executive in 2004, Lego was losing about $1 million (R13.6m) a day as its traditional plastic building blocks were unable to compete with a growing range of electronic toys.
From 2005 to last year, Knudstorp helped revenue jump five-fold to 35.8 billion kroner (R70bn). The chief executive set up research teams to study how children played with the iconic building blocks, and supervised a shift in financial governance to make Lego less vulnerable to credit crunches.
Under Knudstorp, the company expanded its franchise deals with building block sets based on Hollywood movies, including Star Wars and Indiana Jones. He also introduced Lego Friends, a series aimed at girls.
Last year, Lego reported net profit of 9.17billion kroner, beating results at its US rivals Mattel and Hasbro several fold.
Padda, who was born in India in 1956, has been with Lego since 2002.
He will be the first non-Dane to run the 84-year-old company.
Lego plans to set up a new entity, to be called the Lego Brand Group, which Knudstorp will chair.
The unit will focus on the long-term potential of the company’s brand.
“With our recent growth and globalisation come new and exciting opportunities for the brand, and we establish the Lego Brand Group to look into these new opportunities,” said Thomas Kirk Kristiansen, who is the fourth generation in the family to own Lego. – Bloomberg