Over the years, large corporations, often well-known internationally, have become insolvent for various reasons. Whilst some of them have famously closed down, and long since been forgotten, there are also many that managed to recover from the brink of failure. The success stories can sometimes be hailed as the vision of leadership – would Apple have risen to such international success without the return of Steve Jobs? Or would Starbucks have survived the early day troubles without former CEO Howard Schultz, coming back to take over the reins again? Business recovery from near disaster isn’t down to just one person; it takes a dedicated team. Let’s look at two Success Stories on business recovery from looming failure; Lego and Marvel.
LEGO®: the rise, fall and rise again
As the world’s largest toy company, it would be hard to believe that LEGO ever came close to failure, but just over 10 years ago, the Danish company was struggling. Not only were they manufacturing their LEGO bricks and other products for less than it cost to make them, but new toy sets also weren’t popular with their fans, young and old.
Although the family-owned company started out in 1932 making wooden toys, the LEGO brick, which is not much different today from the original, was launched in 1958 and proved an almost instant hit. Its interlocking tube design was unique and allowed children to build just about anything they wanted. Just two years later, the company suffered its first disaster as its wooden toy warehouse was destroyed by fire. The decision was taken to discontinue the production of wooden toys and focus on their new LEGO brick.
By the late 1960s, they introduced the first LEGO building instructions, and at the end of the decade, they launched the LEGO DUPLO® brick. It was double the size of the standard LEGO brick and was designed specifically for younger children. Over the next 20 years, LEGO continued to develop its ‘system within the system’ products, introducing a variety of new themes and programmes. This included LEGO mini figures that encouraged role play, LEGO MINDSTORMS®, an Intelligent LEGO brick that integrated with robot technology and the LEGO building system, and LEGO Creator products that encouraged not just children but adults as well to build creations without limits.
But by 2004/05, the LEGO group faced a serious economic crisis. In order to rescue the company, not only did the role of CEO and President pass to the next generation of the family, a comprehensive survival and turnaround plan was established. The new CEO/President reintroduced the company’s strong focus on their core business – LEGO bricks and the LEGO System-in-Play. They also streamlined their operations and manufacturing and recruited new designers that were passionate about the product.
Their efforts were successful, and new LEGO sets proved to be extremely popular, particularly product lines that were linked with other highly successful franchises, like Harry Potter. Following the launch of the LEGO MOVIE™, LEGO Life – they were the first company to create a safe social online community for children under the age of 13 years – they celebrated 60 years in business in 2018. LEGO continues to be innovative, using sustainable materials in many of their LEGO products and, most recently, launching LEGO Dots, a new arts and crafts play theme, as well as LEGO Braille bricks to help children that are visually impaired learn critical thinking, problem-solving and collaboration through play.
Marvel – overcoming bankruptcy to highly successful movie makers
Marvel today produces big-budget, big-money-making movies that are loved by many worldwide. Their movies have brought to life famous ‘cartoon’ superhero characters, like Spider-Man, X-Men, the Avengers, Iron Man and Captain America. Indeed, the latest offering from Marvel hitting the cinemas for the summer holidays is Thor: Love and Thunder.
Marvel started out in life as Timely Comics in 1939 by Martin Goodman and by 1951, they had become known as Atlas Comics. It wasn’t until 1961 that the Marvel phenomenon began when the company launched The Fantastic Four comic series, together with other superhero titles. By the mid-seventies, Marvel had ventured into radio with the Fantastic Four series.
However, despite their huge success with comic imprints, records and radio, as well as other associated merchandise and collectable trading cards, they lost seven of their most prized artists in 1992 and by 1995, following a slump in the industry, MEG, who owned Marvel at the time, declared bankruptcy and filed for Chapter 11. Licensing deals put some of Marvel’s characters on the big screen in the late 1990s, but the company wasn’t making much money, later being bought out by Toy Biz, which ended the bankruptcy and created Marvel Enterprises.
By the early 2000s, Marvel’s characters started to appear in films, like Men in Black and the Blade movie series. A few years later, they took a big risk and started their own studio with huge success. Having launched Marvel Digital Comics Unlimited, creating a digital archive of more than 2,500 back issues that can be viewed for a fee, they celebrated their 70th anniversary.
In 2009, The Walt Disney Company bought Marvel Comics’ parent company, Marvel Entertainment, and just a few years later, Marvel and Disney started to collaborate on projects. Today, Marvel Studios is Walt Disney Studios distributing new comic book characters and series, television series and major films.
LEGO and Marvel demonstrate that insolvency and bankruptcy may not always mean the end of the road. By working with an insolvency practitioner to develop a business recovery programme, it is possible to come out the other side and succeed.
If you are struggling with debt or insolvency, are considering winding up a solvent company or declaring bankruptcy, contact Simple Liquidation for assistance. For more information on how our professional insolvency practitioners may be able to help your business, contact us today.