In this vlog, the narrator takes a field‑trip to a LEGO store in New York to illustrate the dramatic turnaround of the LEGO Corporation. He explains that, twenty years ago, LEGO was losing about $1 million a day after diversifying into unrelated businesses (cartoons, theme parks, etc.). The company hired former McKinsey consultant Jørgen Vinodstrup as CEO to reverse the decline. The narrator points to two pivotal strategies observed inside the store: (1) the emergence of “kiddults,” adult millennials who now account for roughly 30 % of LEGO’s sales and buy high‑priced, nostalgia‑driven sets; and (2) aggressive licensed partnerships with franchises such as Star Wars, Harry Potter, Super Mario, Marvel, and others, which attract adult collectors. In‑store footage shows far more adults than children, with shoppers eyeing $900 Millennium Falcon sets and other premium kits. The video also notes LEGO’s ancillary benefits—relaxation and mental‑health support—making the brand especially resonant in a post‑pandemic world. The narrator concludes that LEGO’s focus on adult consumers and strategic branding has restored it to the world’s largest toy company with about $10 billion in annual sales, and he invites viewers to comment on the turnaround.
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So we're in New York for the weekend and the family is all sleeping. Uh, so I am gonna duck out and do what business nerds do, which is go visit one of my favorite case studies in business turnarounds, uh, which is a company called the LEGO Corporation. In this video, I'm gonna walk over to the LEGO store and along the way I'll tell you the story of how they got into trouble. And then you can see the evidence of how they turned it around inside the store itself. Today, the LEGO Corporation is the biggest toy company in the world. They do about $10 billion in sales, but just 20 years ago, It was a totally different story. They were in huge trouble, but diversified into all kinds of different stuff. Everything from, well, Legos, which we're all familiar with, to cartoons, to theme parks, who knows? Everything else under the sun besides making great toys for kids. Lego was doing it. And the results, well, they kind of matched that level of diversification. They were losing $1 million a day before they tried to turn it all around. In dire straits, they went and hired a guy named Jørgen Vinodstrup. he's a former McKinsey consultant— made him CEO and said, come on in and turn this thing around. And the evidence of what he did, well, we'll head on over to the LEGO store and I'll show it to you because it's pretty fascinating. So what's crazy about coming into a store like LEGO is there's no kids. Well, there's not that many. There's a lot more adults in here shopping than there are kids. Some of these sets are incredible, like There's no way a kid is buying a $900 Millennium Falcon. And if you look at what people are actually looking at, they're looking at Star Wars and Super Mario. Nobody's looking at the generic stuff. It's all the branded items, except for this dude. He's looking at Twilight. Batman. Spider-Man, Marvel, Spider-Man. The people coming in, these aren't parents. These are people buying for themselves. So in there we saw the two things that ultimately saved LEGO. The first was the rise of kiddults. And kiddults were special. They comprise 30% of the sales for LEGO now. And what they are is they're typically millennials who have money to spend. And they're coming in there and they're shopping for those kits, not because they want to play with them. It's because they're shopping for nostalgia. Millennials are one of the, like, generations that are the slowest to grow up. In that case, well, a lot of them are still, like, buying stuff that reminds them of being young. These kiddults, well, they're great customers because they have jobs and they have money. You know what kids don't have? Money. And so what LEGO did was super genius. And this is the second thing, which was to go around and signed brand deals with all these different types of brands that would appeal to millennials and to adults who were suddenly spending a lot of money on toys. They have Star Wars, they have Harry Potter, they have all that stuff in there. Kind of crazy. And they're the only ones who can make those kind of toys because they've got the scale. Well, to go, uh, go, go sign up those kind of deals. So in the end, you saw this strategy paying off inside that store. You have a bunch of adults shopping for what used to be kids toys. In the end, like, I would love to own LEGO right now. I mean, you see what's happening with millennials and Gen Z being, well, just kind of pretty sensitive to what's going on in the world. There's just like a lot of, a lot of mental health issues, a lot of challenges for younger folks these days. And one of the reasons people state for doing LEGOs is it's relaxing and it's calming to them. And especially in this era when people aren't leaving their homes, it's a pretty good mixture that they have here. And a strategy that, well, it's just going to keep working. That's it. Let me know what you think about this turnaround of LEGO, and thank you for going on a field trip with me. I love talking about business. It's so fascinating. All right, let me know what you think in the comments below. We'll catch you next time.
