Today, one of the most important toy companies in the world is undoubtedly LEGO, whose empire was forged, almost literally, block after block. Here we will tell you the history of LEGO and some details you should know about this company that has brought joy to the children’s world for some years now.
The History of LEGO
Unlike many other popular toys, LEGO was not born in the United States but in Billund, a town in Denmark, thanks to the mastermind of carpenter and entrepreneur Ole Kirk Christiansen and the brand’s own Company Profile. It was in 1932 when the creator decided to start making small-sized wooden furniture to market to the public during the Great Depression but, seeing that it didn’t really sell, he decided to go into toy production two years later.
By 1936, his company grew exponentially, so he decided to name it “LEGO,” a kind of pun derived from the Danish words “led godt,” which means “to play well.” Since then, he began the toy empire that today has innovated the world of construction at an international level.
In the early forties, LEGO toys were a huge hit with the public, as they were more accessible and easier to acquire than those made of metal and imported from various regions of Europe. However, at the beginning of the 1940s, Christiansen decided to stop using wood in the manufacture of its toys due to a production problem and decided to use plastic through injection molding machines, which made designs inspired by the building blocks of the British firm Kiddincraft.
At the end of that decade, the entrepreneur decided to add color to his toys, choosing a palette of vivid shades inspired by the paintings of Piet Mondrian, as he found them very appealing to children, whom he hoped to help improve their imagination and creativity by not including instructions on how to use the blocks.
Rise, Fall, and the Recovery of the LEGO Empire
Ole Kirk’s successor, his son Godtfred Kirk, took over the company in the late 1950s and decided to discontinue the production of wooden toys to deal solely with plastic, something his descendant, Kjeld Kirk Kristiansen (he changed the surname slightly) also continued. It was in the early 1960s that the company established itself internationally, producing blocks first from cellulose acetate, then from ABS plastic, which is still in use today in the absence of renewable plastic.
The company produced 706 million play sets in the 1960s, their most profitable year in the last century, something that led them to develop LEGOLAND, their first theme park in Billund, and to reach the United States in the 1970s. Their work was so important to Denmark in those years that they even accounted for 1 percent of the gross domestic product.
However, when the 1980s arrived, things began to change for the company, as they lost the patent for their building blocks, which led other companies to produce similar but cheaper models to enter the market competition. Therefore, Kjeld Kirk decided to bet on the development of other business models, such as its line for adults LEGO Creator Expert, or its line of robotics LEGO Mindstorms and its first serialization of toys, Bionicle, which helped the company to stay afloat until the mid-90s when they began to go bust.
Why? Because of the emergence of video games, which took the lion’s share of the profits in that decade compared to the toy industry. In fact, 1998 saw its first big loss, after which the company tried to recover by launching new official licenses and collections that only left it with losses of almost 300 million euros at the beginning of the new millennium.
The Kristiansen family was desperate, so they decided to give a new president outside the family line a chance: Jorgen Vig Knudstorp, who helped get LEGO out of the red by offshoring some of its production outside Denmark and selling LEGOLAND parks to Merlin Entertainments group of companies. Knudstorp also opened the doors for LEGO to the world of entertainment by forging a large contract with the Warner Bros. production company, which produced several series and movies inspired by the toys, including the hits The Great LEGO Adventure and LEGO Ninjago: The Movie.
Thus, by 2015, the firm managed to surpass Mattel in sales by obtaining profits of 2.13 billion dollars, according to Nasdaq media. And as we know now, the company keeps growing and blossoming.
Story originally published in Spanish in Cultura Colectiva