BILLUND: LEGO, the Danish toymaker, is streamlining its management structure as it seeks to improve its ability to implement marketing strategies and react to new trends.

The move comes as the business announced a 5% decline in sales and a 6% decline in profits in the first half of the year and said it would be cutting 1,400 jobs.

“We are simply not executing well enough on our activities across the business, on product development, marketing, sales,” said Jørgen Vig Knudstorp, Lego Brand Group Chairman.

One aspect of that, MarketWatch reported, was that a marketing push to generate growth in mature markets had failed to deliver as expected.

“We have added complexity into the organisation which now in turn makes it harder for us to grow further,” added Knudstorp. “As a result, we have now pressed the reset button for the entire Group.”

He explained that a new product goes through an average of 20 different teams before being ready for global launch.

“Suddenly the consumer, the shopper, the retailer is a bit too far from the top management,” he observed.

The toy brand has been phenomenally successful over the past decade, moving beyond its iconic bricks to introduce new characters and games as well as developing a feature film and adroitly leveraging fan-produced content (for more, read WARC’s reports: Lego evolves its brand with social media and content marketing and How Lego uses digital to inspire the builders of tomorrow).

“The car has run off the road and we are a bit stuck in the ditch,” said Knudstorp. “It will take a couple of years to get into the shape we want to be in. But it’s not a turnaround, it’s not a financial crisis.”

Data sourced from Financial Times, MarketWatch; additional content by WARC staff