After buying the brick manufacturing clone brand Sohobricks last year, the LEGO Group is now closing its new acquisition.
Last year, the LEGO Group acquired Sohobricks and Bricklink. Considering that the LEGO Group usually litigates against brands that infringe on its intellectual property, it was a surprising development. Self-described “clone brand” Sohobricks was producing identical elements to those in the LEGO Group’s portfolio.
At the time, LEGO Chief Marketing Officer Julia Goldin was excited about the deal: “Sohobricks mainly produces for events, such as charity. And that that is really where they’re at their focus [sic]. It’s very early days for us to say exactly how we will work together and we’re very excited about the deal…”
After buying the company for an undisclosed sum last November, the LEGO Group is now closing Sohobricks. It will put 34 people out of work, in perhaps the most challenging job market for a decade due to the economic impact of coronavirus. The company is promising to provide “above the statutory” severance packages.
It turns out that the LEGO Group did not fully understand what Sohobricks’s business was when it acquired the company. “We have been working closely with the Sohobricks team to understand their business and operations,” the LEGO Group says in its statement.
Here is the official statement in full:
In December 2019 we bought Sohobricks as part of our acquisition of Bricklink. Since then we have been working closely with the Sohobricks team to understand their business and operations. As part of this review, we found that a very significant investment would be needed to create a sustainable business and upgrade manufacturing operations to run efficiently and meet our operational standards.
Unfortunately, such a large investment is simply not commercially viable. As a result, we have made the extremely difficult decision to close Sohobricks from the end of May 2020. We will now focus on supporting Sohobricks’ employees. There are currently 34 people working in the business and we will provide them with financial packages that reflect their years of service and are above the statutory requirements. We will also offer a professional outplacement service that will provide financial advice and assistance in finding a new job.
We would like to thank the Sohobricks team for all that they have done. We know this will be a difficult time for them and we are committed to doing what we can to help them through this.
It’s important to emphasise that the decision regarding Sohobricks does not affect any other LEGO Group manufacturing sites or our focus to supply bricks to the AFOL community.
We will continue to invest in Bricklink and want to reassure you that Bricklink remains a priority for us. We are excited about the platform’s potential especially the opportunity to strengthen our connection with our adult fans. We are currently working on future plans and look forward to sharing more information when the time is right.
We hope that you and your loved ones are staying safe during this difficult time.