Unsurprisingly, Sohobricks is no more – because the LEGO Group never had a justification for acquiring the company in the first place
Last year, the clone brick company was picked up by the LEGO Group as part of the wider deal for the takeover of BrickLink. Whilst initial reaction primarily centred on the LEGO Group’s intentions with the latter outfit – the largest online marketplace for resellers of LEGO pieces, minifigures, sets and, now formerly, customised pieces – Sohobricks’ inclusion in the deal was still curious. It was a small company producing clone LEGO elements with a charitable arm (although the extent of this was unclear). Otherwise a company that the LEGO Group would sooner shut down than entertain exchanging money for, Sohobricks’ move under the LEGO Group’s umbrella raised eyebrows, but ultimately seemed to be just a part of negotiations for BrickLink.
Today’s announcement that the LEGO Group will be closing down Sohobricks only confirms that.
In official statements released when the LEGO Group acquired BrickLink and Sohobricks, the purposes of both companies were played down. The community aspect of BrickLink was highlighted; the money the company makes from people reselling LEGO bricks and sets was played down. The tenuous charity link that Sohobricks has was played up; the fact it was copying LEGO elements was played down.
But ultimately, the LEGO Group had no reason to acquire Sohobricks other than as part of the BrickLink purchase. It was a small company producing clone LEGO elements for charitable activities. With consideration to that charitable angle, the production capacity that the LEGO Group has – not to mention the sizeable 25% division that is the LEGO Foundation – means that they already have established and sophisticated routes into numerous charitable activities that can and do include the provision of official LEGO bricks.
And as for Sohobricks’ manufacture of clone elements, that could never continue under the management of the LEGO Group. Usually, the LEGO Group condemns the practice of making profit from its intellectual property. While this can be as extreme as Lepin copying entire sets, the LEGO Group also owns the elements that it designs. Sohobricks was copying those element designs. Ordinarily, a stern letter from the LEGO Group might sooner be expected rather than an acquisition.
How could the company have justified a tiny little production facility making a tiny, tiny number of elements, when it has factories all over the world churning out millions of elements in an efficient and refined way? How could Sohobricks continue to operate as it was, offering elements copied from LEGO elements, while the LEGO Group is litigating against others doing the same? The LEGO Group surely purchased Sohobricks to close it.
Here is an extract from the closure announcement:
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.
It seems slightly odd that a company the size of the LEGO Group would not understand the business it was buying. To justify the purchase of Sohobricks, a business case would have to had to have been made – and that would have meant knowing what Sohobricks was.
A cursory examination of the Sohobricks website last November made it entirely apparent that such as business would not be ‘commercially viable’ for a company the size of the LEGO Group.
It was clear to most observers six months ago that Sohobricks was going to be shut down – it is surprising that at the time it wasn’t also clear to the LEGO Group.