It may be hard to believe today, but it wasn’t so long ago that business at Lego was far from “everything is awesome.” It hit rock bottom in 2003, when the company lost $300 million and seemed on the road to becoming yet another victim of dwindling interest in “old school” toys.
For years, the company was growing impressively. Lego began churning out plastic bricks in 1949 and was a household name by the 1980s. With profits increasing four-fold over that decade, it seemed like nothing would slow its progress.
But Lego struggled in the 1990s as offshore upstarts marketed ultra-cheap knockoffs and its new toys failed to sell. Plus, tech gadgets and video games were demanding more attention from the core Lego audience. By the 2000s, the company was in a free fall.
Lego reacted with purpose. It divested non-core businesses like Legoland to generate some quick operating cash and outsourced brick production to reduce costs. It then struck back at those new distractions by facing them on their own high-tech turf. Lego-themed video games, TV shows, and ultimately an Oscar-nominated movie followed. Customers clamored for Lego brick sets designed as counterparts to the high-tech products.
The company also doubled-down on tech-focused building sets, including the futuristic Bionicle, Technic, and Mindstorms lines, the lattermost of which could be used to build elaborate home robots. That $300 million loss in 2003 turned into a $300 million profit by 2006. In its most recent year, Lego topped $1 billion in earnings for the first time.
Today, Lego is back on top. It’s one of the biggest toy companies in the world, with a much better understanding of its target audience. Adults and children alike now shell out hundreds of dollars for meticulous Lego recreations like The Simpsons’ family home and the Sydney Opera House. Everything truly is awesome once again.
In the multi-part feature with WIRED Brand Lab, we look at Eight Global Brands That Stand for Spectacular Reinvention. Check all eight stories from the series here.
Rahil Arora leads Lenovo’s Customer Stories program.