Much more than at the start of the corona pandemic, consumers have discovered Lego this spring as a pastime for listless moments. Between January and June, the Danish manufacturer of the famous plastic blocks sold almost 50 percent more than a year earlier, according to Tuesday’s half-year figures. Lego’s turnover thus amounted to 23 billion Danish krone (3.1 billion euros), the highest level ever.
Revenue growth is more than six times stronger than in the first half of 2020, when the corona pandemic spread around the world and consumers saw their lives largely reduced to the walls of their homes. According to CEO Niels Christiansen, Lego then benefited less from all that extra free time because the company had to deal with many obstacles at the time: factories came to a standstill and toy stores were more often forced to close.
Still, the explosive growth at the beginning of this year is not a temporary increase, which is declining again now that normal life returns, Christiansen thinks. “We expect this to be real growth, rather a new level from which we can continue to grow,” he told business newspaper. Financial Times. To add to that, outsiders shouldn’t expect his company to sell 50 percent more every year.
Strong demand for Lego boxes was reflected in virtually every category of products, the CEO said in a statement. According to him, there were some outliers, such as products with the Star Wars or Harry Potter theme and the Creator Expert line. The latter group includes exclusive packages for the most experienced builders. This concerns, for example, a Porsche 911 for 150 euros, a replica of the Barcelona stadium (330 euros) and the most recent addition: a Lego imitation of the Colosseum in Rome, with more than nine thousand pieces and a price of 500 euros. largest and most expensive package to date.
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Your own doll
Under Christiansen, who took office in 2017 after a major reorganization due to underperformance, Lego has focused even more on such specific packages and themes than before. In addition, the company has been investing heavily in the Chinese market and opening stores in recent years. In these own stores, everything revolves around the experience. For example, customers can replicate themselves as a Lego doll.
The fact that physical stores were hit hard during the pandemic does not change that strategy, according to Christiansen. Because now, visits and sales are increasing again so fast that, according to the CEO, there is no doubt about the relevance of the physical store. Earlier this year, Lego announced that it plans to open another 120 stores, mainly in China. This brings the total to 800 branches.
Bottom line, Lego also had an excellent half year: net profit at the end of June amounted to 850 million euros, about two and a half times as much as in the first six months of last year. The company does notice, like many other manufacturers, that the price of raw materials and container transport has risen sharply recently. That is not a cause for concern, CEO Christiansen told Reuters news agency: Lego has factories all over the world and is therefore not only dependent on production in Asia.
Corona boredom does Lego good: significant growth in turnover in 2021
Source link Corona boredom does Lego good: significant growth in turnover in 2021