Lego builds profits and plots further shop expansion
4 March 2020, 09:24
The group posted a 3% rise in net profits to 8.3 billion Danish kroner (£970m) on revenues 6% higher.
Danish toy giant Lego has posted higher annual profits and said it is stepping up investment in shops and online with plans to open around another 150 outlets worldwide.
The group, which now has 570 stores globally, said it wants to tap into a demand for more “immersive” experiences across its store estate.
Having opened 150 shops in 2019, it is aiming to match this with another 150 in 2020, 80 of which will be across China as it focuses on expanding its footprint in the country to 220.
Group chief executive Niels Christiansen said it is “too early” to say what the impact of coronavirus will be on the group.
But he stressed it “doesn’t change our strategy” or long-term investment plans.
Results showed a 3% rise in net profits to 8.3 billion Danish kroner (£970 million) on revenues 6% higher at 38.5 billion Danish kroner (£4.5 billion).
The group also cheered a 27% rise in online sales after it revamped its website.
It saw strong sales from its licensed ranges, such as Harry Potter and Marvel’s Avengers, but its core products were the stand-out performers thanks to strong demand for Lego City, Lego Classic and Lego Technic.
Sales rose across all its markets, with single-digit growth in Western Europe, including the UK, and the Americas, while China enjoyed “strong double-digit” growth.
Mr Christiansen said: “It was a strong year where we outperformed the toy industry and grew consumer sales and market share in all our largest markets.”
On spending on its stores and website, he added: “Consumers are looking for immersive brand experiences in store, and value and convenience online.
“We are stepping up investment in all our retail channels and working closely with our partners to connect with people wherever and however they want to shop.”
It marks the second year of profit growth after sales fell in a tough 2017 for Lego.
Mr Christiansen took the helm that year and has helped steer the group back to growth.
As well as revamping stores and its website, he oversaw last year’s acquisition of BrickLink – the world’s largest digital platform for adult fans of Lego – and launched Lego Hidden Side, which combines regular building sets with augmented reality.