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Moneymakers

Lego

The Danish purveyor of plastic bricks and mini figures has been racking up some not-so-mini figures recently. In the first half of 2021, net revenues were up 46% year on year to $3.6bn and net profits rose by 140%. Which is no surprise, given all the time at home we’ve had to fit bricks together. Lego’s largest set, a 9,036-piece, £450 replica of the Colosseum, will keep you busy for several days should another lockdown loom.

Good to know. Is this success just a pandemic quirk?
Not entirely, but the 2020 lockdowns saw Lego enjoy its strongest growth in five years. It now has 737 shops and 18,800 employees worldwide. China is also in its sights: 40 of the 60 shops it opened in the first half of this year are based there. Good timing, given that President Xi Jinping has just cut down on the amount of time Chinese children can spend playing video games. For those with unlimited access to screen time, there are countless Lego games based on collaborations with film franchises such as Batman, Indiana Jones and Star Wars, as well as four Lego movies – the first of which was surprisingly liked by the critics. Yet these intangible products pale in comparison with the number of Lego pieces made: a mind-boggling 760 billion in total. The world is thought to contain more Lego figures of people than actual people.

Where is Lego from?
Billund, a small town in central Denmark that’s still home to one of Lego’s five global factories. Carpenter Ole Kirk Kristiansen, the 10th child in a poor family, began making wooden toys in Billund in 1932. Two years later he named his venture Lego, after the Danish phrase leg godt, meaning “play well”. The switch to plastic began in 1947, when the company spent more than twice the previous year’s profits on an injection-moulding machine. Toy trade magazine Legetojs-Tidende turned its nose up at the “automatic binding bricks”, but Kristiansen was undeterred. He died in 1958, the year when the design and material of the Lego brick was finalised. All the pieces made since then can fit perfectly together.

The largest Lego set is a 9,036-piece replica of the Colosseum

No built-in obsolescence, then?
Unlike other toys, Lego has been enjoyed by generations of kids. Key to that success is its Global Insights team, which is said to do more ethnographic studies of children than any other research group in the world. It hasn’t all been plain sailing: in 1998 the company posted a loss of £23m and by 2004 it was £174m in the red. Then former McKinsey consultant Jorgen Vig Knudstorp arrived as CEO and tidied up the toybox: the Legoland theme parks were sold and the number of unique pieces produced was cut from 13,000 to 6,500. Lego’s fortunes revived and in 2015 it surpassed Mattel as the world’s largest toymaker.

Talk about building back better. Who else is into Lego?
David Beckham stays up into the early hours with his bricks. Google founders Larry Page and Sergey Brin ran an early internet search algorithm on a server partially constructed from Lego. According to Guinness World Records, the tallest Lego tower is more than 35 metres high, the longest structure is a 1,578-metre millipede and the largest structure is a model of Tower Bridge built from 5,805,846 bricks. TV presenter James May’s full-size Lego house, complete with working toilet and shower, needed a mere 3.3 million. But even constructing that sounds preferable to the record for walking barefoot over Lego bricks – Salacnib “Sonny” Molina of Illinois managed nearly 9km in May.

Ouch!
Much more pleasant are the fortunes of the founding Kristiansen family, who still privately own Lego. Ole’s grandson Kjeld, 73, and his children, Sofie, 44, Thomas, 42, and Agnete, 38, are worth an estimated $8.5bn each. (Kjeld’s sister Gunhild’s branch of the family was bought out in 2007.) In keeping with the tradition of having a “most active owner” in each generation, Thomas is lined up as the next chairman: his business card is a lookalike mini figure with his email and phone number on the back. When they’re not palling around with the Danish royal family, the Kristiansens’ biggest folly is a love of dressage – Agnete competes professionally.

Billionaire spending the Scandi way
Indeed. Lego’s own ideals have been similarly wholesome – guns were banned from its kits until 1999. But the company has had to weather several controversies. It came under fire in 2015 for refusing to supply Chinese artist Ai Weiwei with bricks for one of his works, citing political neutrality, a decision Kjeld later said was a “mistake”. The 2012 Friends range had a decidedly traditional attitude to gender stereotypes – after an angry letter in 2014 from a seven-year-old girl, Lego released female palaeontologist, astronomer and chemist figures. And now plastic is seen as less than fantastic, it’s hoping to keep up with the zeitgeist by finding an eco-friendly material for the bricks by 2030.

And a Greta figure, perhaps?