Danish toy manufacturer Lego keeps on growing, as a deal with Marvel and its superheroes proves very profitable. Chinese expansion is in full swing too and the first Dutch store opens next month, but Indian customers will have to wait a bit longer.
Turnover on the rise
Lego’s turnover went up by 4 % to 14.8 billion Danish crowns (just under two billion euros), however half of that growth came courtesy of positive exchange rate fluctuations. The Chinese market achieved a double-digit growth, but CEO Niels Christiansen is as pleased with the single-digit growth in the more mature markets Western-Europe and the United States.
The list of best selling Lego products is topped by Marvel Avengers like Captain America and Iron Man, but other collaborations (such as Star Wars products) are performing very well. On the rise, too, is ‘good old’ classic Lego Technic.
Profit drops
Despite the growing turnover, profit could not follow suit and dropped 16 % to 3.5 billion crowns (half a billion euros) as major investments were necessary. Those are not over yet, as the Danish company wants to open no fewer than 35 stores in China before the year is over – lifting the total in the country to 140 and the worldwide total to 600. Physical stores are absolutely vital, Christiansen says, as they provide ‘tryvertising’ (in which children can test products in stores, then want to take them home).
For that reason, Lego is looking to open its very first store in India – the country with the second biggest population on Earth. However, concrete steps have not been made, the company says. Closer to home, Lego is to open a first Dutch store in Utrecht, with Amsterdam following before the year will have ended. Until then, the only official Lego store in the Benelux is the one in Wijnegem (near Antwerp, Belgium).
