Lego profits tumble – after it made too many bricks!

LEGO’S empire appears to be crumbling – because it’s made too many bricks.

Sales have tumbled for the first time in 13 years as the firm admitted it had ‘too much’ stock in shops and warehouses.

The Danish company said it had experienced a ‘challenging’ year and there would be ‘no quick fix’. The firm was teetering on the brink of bankruptcy 13 years ago but has since recorded more than a decade of strong growth. However, it revealed in September it was laying off 1,400 staff in a bid to overhaul the business.

A month later the group was forced to appoint a new chief executive after its former boss, Briton Bali Padda, left only eight months into the role. Lego’s annual profits have now plunged almost 17 per cent to £940million, while sales declined 7.5 per cent to £4.2billion.

Lego said it had ‘too much’ surplus stock, which made it hard to get new products in front of shoppers. ‘There wasn’t enough room to get 2017 toys into the stores, and the toy trade is driven by newness,’ a spokesman told the BBC. Excess stock reportedly had to be sold at a discount.

It comes at a difficult time for toy retailers, with Toys R Us collapsing into administration last week.

Niels Christiansen, chief executive at the Lego Group, said: ‘2017 was a challenging year and overall we are not satisfied with the financial results.’