World Courant
Prospects at a Lego retailer in Shanghai, China, on February 3, 2024.
Price picture | Nurphoto | Getty Photos
Within the first half of 2024, the toy trade was hit by a gross sales decline as a result of inflation, however one firm is slowly however certainly gaining market share.
On Wednesday, Lego reported that its income rose 13% within the first six months of the yr to 31 billion Danish kroner, equal to about $4.65 billion.
Niels Christiansen, CEO of the privately held Danish toymaker, advised CNBC the corporate has a robust place in its portfolio, notably by means of Lego Icons and Lego Creator, and thru its partnership with Epic Video games’ Fortnite.
Final yr, Lego noticed a development of customers “buying and selling down” or choosing cheaper units whereas nonetheless shopping for the identical quantity because the yr earlier than. This yr, quantity has gone up, Christiansen mentioned.
“To the extent that they have been down final yr, they are not happening any additional,” he mentioned. “In order that’s stabilized. And we’re seeing nearly the entire progress is definitely quantity progress.”
In the meantime, publicly traded rival Mattel noticed internet gross sales fall 1% within the first six months of 2024, and Hasbro reported internet gross sales fell 21% between January and the top of June. Mattel faces powerful comparisons with toy gross sales fueled by “Barbie” in 2023, and Hasbro continues to be reeling from its divestiture of eOne.
Lego is constructing on its pandemic-era progress with a various vary of merchandise that enchantment to each children and adults. Along with units tied to in style franchises like Harry Potter and Star Wars, Lego additionally has revolutionary design choices that permit customers construct flowers and succulents, well-known artistic endeavors and animals.
Gross sales within the U.S. and Europe stay sturdy, Christiansen famous, whereas gross sales in China are flat. He mentioned customers within the area are spending much less on higher-end gadgets and their buy frequency is decrease.
Lego, nonetheless, isn’t giving up on increasing in China. Christiansen mentioned there’s nonetheless “long-term potential” within the space.
Of the 40 Lego shops that opened within the first quarter, 20 have been in China. Of the 60 deliberate openings within the second half of the yr, 20 are deliberate for China.
Sustainability
Christiansen additionally praised Lego’s sustainability efforts. Up to now this yr, the corporate has practically doubled the quantity of renewable and recyclable supplies it makes use of in its bricks in comparison with all of 2023.
“That is a pleasant milestone,” he mentioned. “That is a superb step ahead. (We) are spending fairly a bit of cash on that in a few methods, primarily by shopping for costlier materials, as a result of mass steadiness materials is costlier than simply customary.”
Christiansen famous that Lego doesn’t cross these prices on to the patron.
“By really being keen to pay a premium to get this product, we have additionally created an incentive for (suppliers) to really develop a majority of these merchandise and create extra manufacturing capability for a majority of these merchandise. We’re actually working as an trade that has to attempt to speed up that entire course of.”
Lego hopes to supply half of its uncooked supplies from sustainable sources within the coming years.
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Lego gross sales to rise 13% in first half of 2024
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