Thought leadership

Danish toy retailer Lego is betting big on physical stores despite falling demand in the wider toy market. It plans to open 150 branded shops around the world in 2020, having opened the same amount last year.

Lego’s chief executive, Niels Christiansen, told the BBC that he “wanted people to get their hands on bricks and be a part of the brand”. The company estimates that the global toy market shrank by 3% in 2019.

Mr Christiansen said: “Some of the changes in the retail landscape have put toy retailers under pressure… But we see the great power of people getting their hands on bricks.”

The firm, which has 570 stores worldwide, has traditionally sold its goods through third-party retailers. Its decision to open more High Street sites comes despite a spate of retail closures.

The biggest casualty in the toy industry has been Toys R Us, which collapsed into administration in the UK in 2018.

Lego currently has 16 UK stores, but would not confirm if any of the new openings this year would be in the UK.

It said 80 of its new stores would be located across China as it focuses on expanding its footprint in the country to 220 shops.

Mr Christiansen said that none of Lego’s employees had yet contracted the coronavirus after the outbreak emerged in China’s Hubei province.

However, its manufacturing plant in Jiaxing remained closed for a week after the Lunar New Year in China on the advice of the authorities. It has has since reopened.

On Wednesday, Lego reported sales of 38.5bn Danish kroner (£4.5bn; $5.7bn) for 2019, up from 36.4bn in 2018. Net profit climbed 3% to 8.3bn kroner.

It marks a second year of profit growth after sales fell at the family-owned business in 2017.

Lego in numbers

  • 70 billion Lego parts are sold annually in over 130 countries
  • 915,103,765 – the number of ways to combine six two-by-four Lego bricks of the same colour
  • More than 700 million Lego tyres are produced annually
  • 18,800 Lego employees around the world
  • 3,400 – the number of different types of Lego shapes
  • 570 Lego stores worldwide
  • 0 – Lego says there have been no product recalls since 2009


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