Today, 28th January, is the day that Lego’s world-famous “stud and tube” coupling system was patented, back in 1958. It paved the way for toys that caught on the world over, filling countless rainy days for children and invoking loud curses from parents who have the misfortune of treading on upturned bricks as they clear them away. The Lego group has been in the hands of the Kirk Christiansen family ever since it was founded in 1932.
The Patek Philippe name has been around much longer, but it has been under the ownership of the Stern family since – you guessed it – 1932. Both brands have extremely recognizable (dare I say “iconic”?) products. Lego produces 19 billion bricks every year, while Patek Philippe assembles around 50,000 timepieces a year. Lego generates more revenue than Patek Philippe (unlike Patek Philippe, Lego actually publishes an annual report with financial information) and counterfeiters attempt to benefit from the popularity of both these brands.
It is, however, the family ownership that is most interesting, given the recent rumours circulating (for the umpteenth time) about a potential sale of Patek Philippe. Family-owned takeover targets are interesting for potential buyers because of their simple sole proprietor structure, as opposed to the complex webs of shareholdings for public companies. But when US toy maker Mattel was rumoured to be considering an offer for the ailing Lego group 16 years ago, the Kirk Christiansen family reacted by fixing the company rather than selling it. A tough but short and sharp turnaround quickly restored the company back to good health.
Patek Philippe doesn’t need fixing, of course. Sales are healthy, its watches are coveted, waiting lists are long and a huge new factory is nearing completion next to the current one in Plan-les-Ouates. Unlike the example with Lego, there is absolutely no pressure on the company.
But regardless of the rumours, the Lego story nevertheless includes some valuable advice for any watch brand, whether it might be discussing a takeover or a new product line. “We had become arrogant—we didn't listen to customers anymore,” said Jorgen Vig Knudstorp of Lego at the time. He was a former management consultant at McKinsey who had been parachuted in to fix the company.
