All is not well in Legoland

Danish toymaker Lego sacked its chief executive today after announcing it expected to make a €186.9 pre-tax loss, its worst in the privately held company’s 72-year history.

Danish toymaker Lego sacked its chief executive today after announcing it expected to make a €186.9m pre-tax loss, its worst in the privately held company’s 72-year history.

The company, whose coloured plastic building blocks have been a favourite children’s toy for decades, axed Poul Plougmann over failed marketing strategies.

Additionally, the company said it was looking at possibly laying some of its 8,000 workers worldwide.

Kjeld Kirk Kristiansen, chief executive and grandson of the company’s founder, said Lego’s push to focus on new developments did not generate the results it wanted.

Last year was “very, very bad,” he said.

Since the company reported its first loss in 1998, Lego has been hit hard by increasing competition from makers of electronic toys.

Lego reacted by expanding its electronic offerings, including making high-profile deals to use characters from Disney, the Star Wars films and Harry Potter books in its toys.

It also developed popular CD-ROM games and its lauded Mindstorms series, high-tech robots that can be manipulated using microcomputers.

“We we’d rather be in control of our own products, the things that we can decide,” Kirk Kristiansen said. “We do not decide when a new movie is on the market so we want to go back to our core products and that is a key part of our future strategy.”

The company could not say how big a possible staff reduction would be, saying an announcement would be made “in a couple of months.”

Legoland amusement parks, including the British site at Windsor, will not be affected, Kjeldstrup said.

Founded in 1932 by Ole Kirk Christiansen, the name Lego was invented by combing the first two letters of the Danish words “Leg godt” (play well) without knowing that that the word in Latin means “I assemble.”