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Licensed sets and strong Chinese market help lift Lego sales

Published on: February 28th, 2019

Harry Potter and Star Wars building sets helped Lego return to growth in 2018, along with strong sales in China.

The company ended 2018 in a far stronger position than the previous year, and gained market share after sales dropped for the first time in a decade in 2017. Lego said that global sales rose by 3% last year, while total revenue rose 4% to 36.4b Danish Krone ($5.5b). Operating profit grew by 4% to 10.8b Krone. The Star Wars Millennium Falcon set was last year’s best seller, while four Harry Potter-themed Lego sets were among the top 10.

“We had aimed to stabilize the business in 2018, but have actually returned to moderate growth on all parameters in a very tough environment,” explained chief executive Niels B. Christiansen. “We are especially encouraged by our progress given the challenges facing the toy industry and the departure of specialist retailers such as Toys R Us that went under last year. These shifts gave us the opportunity to strengthen our partnerships with retailers and find new ways to connect with shoppers and consumers across digital and physical channels.”

He added that efforts to combine physical bricks with the digital world, including the use of augmented reality, had also paid off.

Lego’s sales increased in all key markets. China enjoyed strong double-digit growth, while the United States and Western Europe returned low-single digit growth. China still accounts for less than 10% of sales and is a territory which Lego considers to have high growth potential. While online sales continued to grow at the expense of physical stores, Niels maintains that Lego stores remain key in order to expand the brand’s presence in new markets and give children “that magic experience”. To this end, the company plans to more than double the number of stores in China this year.

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