Lego Group records double-digit growth, plans 80 new stores

[Photo provided to chinadaily.com.cn]

World-leading toy maker the Lego group is striving to open 80 new physical stores while strengthening its e-commerce capacities in China, as it recorded double-digit growth of revenue and operating profit.

Strong consumer demand resulting from more staying-at-home consumers has boosted revenue, operating profit and market shares for the Billund, Denmark-based company, according to its full year 2020 report, which was released on Wednesday.

Its revenue for the year grew 13 percent compared to that of 2019, to DKK 43.7 billion ($6.99 billion), consumer sales grew 21 percent over the same period.

Operating profit was DKK 12.9 billion, an increase of 19 percent compared with 2019. The brand's global market share grew.

Consumer sales in all market groups grew in the double digits, with especially strong growth in China, the American markets, Western Europe and other markets in Asia Pacific.

Growth in operating profit was driven by strong sales and offset by strategic investments and increased distribution costs associated with shipping products globally following the temporary, enforced closure of manufacturing sites in Mexico and China, the company said.

Net profit grew 19 percent to DKK 9.9 billion, while free cash flow was strong at DKK 11.5 billion.

Niels B. Christiansen. [Photo provided to chinadaily.com.cn]

"For the past two years we've made large-scale investments in initiatives designed to support long-term growth. In 2020, we began to see the benefits of these, especially in e-commerce and product innovation," Niels B Christiansen, CEO of the Lego Group, said.

"We will further increase investments during the coming year with a continued focus on innovating play, our brand, digitalization and developing an omnichannel retail network."

Last year the group opened 134 new retail stores, including two flagship stores and over 80 certified stores in China. This brings the total number of Lego-branded stores globally at the end of 2020 to 678.

The company plans to open a further 120 stores in 2021, 80 of those in China. The Lego Group's stores are expected to be located in 85 cities in the country as it looks to get into 20 new cities this year, said Paul Huang, senior vice-president of the Lego Group and general manager of Lego China.

Huang said last year the company entered 27 new cites in China, where many children have experienced Lego bricks for the first time.

For example, the Danish toymaker is opening a store in Zunyi, Southwest China's Guizhou province, next month.

An innovative and agile omnichannel retail ecosystem continues to matter for the Lego Group.

"People are looking for unique and memorable physical brand experiences, so we will continue to invest to expand our global retail footprint, as well as elevate our instore shopping experiences," Christiansen said.

"This approach strengthens our brand, creating a positive impact across all channels. We also will further build our e-commerce capabilities to support online shopping on our own and our partners' platforms."

[Photo provided to chinadaily.com.cn]

This year, the group will accelerate its investment in digitalization across the entire business, with plan to develop leading digital experiences for everyone who interacts with the company, from consumers and retail partners to suppliers and employees.

To support this effort, the company will expand its digital and technology teams during the year.

The company also has strengthened its global supply chain network to be more agile to respond to digital demand throughout the world.

The Lego Group worked with Tmall, the retail arm of Alibaba group, to build its flagship online store last year.

Globally, strong sales in 2020 were driven by more people of all ages building with Lego bricks. Top themes were Lego City, Lego Technic , Lego Star Wars, Lego Friends and Lego Classic.

Lego Super Mario, which blends digital and physical play, was released in August 2020 and became one of the company's most successful theme launches.

Source: Chinadaily.com.cn