Daily Management Review

Surge In Sale For Lego As Housebound Families During Pandmeic Turn To Play


Surge In Sale For Lego As Housebound Families During Pandmeic Turn To Play
As the novel coronavirus pandemic forced families to stay indoors and spend more time playing together at home, there has been an increased demand for the games of Lego which propped the sales of the company by 14 per cent in the first six months of the current year, said the Danish toy maker on Wednesday.
Since 2017, the family-owned Lego has managed to return back to the path of growth when the company found that its decade of double-digit sales increases had come to an end abruptly.
However, the company has since managed to grow at a much faster pace than the overall toy market and that trend has continued for the company between January and June in the current year. Lego, known globally for the colourful plastic bricks based games and toys, rivals the likes of Barbie maker Mattel and Hasbro ion the global toy and physical games market.

“We saw a very positive development during the coronavirus lockdown when families began playing and building Lego sets together,” Chief Executive Niels Christiansen said in an interview to the media.
“We’ve seen momentum continue into the second half of the year even after people started going back to work and to school. So the result is not just a reflection of two months when everyone was sitting at home,” said Christiansen, who took the helm at Lego in 2017.
Large investments in its e-commerce sale channel and its brand website was made by the company last year. The company also noted a significant increase in visitors to its website and e-commerce site last year which reached 100 million in the first six months of 2020.
The rise in revenues of the company for the first six months of the current year was only about 7 per cent despite a growth in consumer sales of 14 per cent in the period with revenues coming in at 15.7 billion Danish crowns ($2.5 billion). The retailers making use of the existing inventory with them to meet the increased demand was the primary reason for the large difference between sale growth and revenue growth in the period. The pandemic also forced the company to temporarily shut down production in Mexico and China.
The increased sale of its product through its online channel helped the company to be able to more than compensate for the closure of all its 616 shops worldwide at some point because of the pandemic. Lego said that since then almost all shops have now reopened.
The company also reported an 11 per cent growth in its operating profit which came in at 3.9 billion crowns.