Everything is awesome: Lego hits top spot in world’s toy market
For the first time, sales of Danish construction bricks outstrip sales of Barbie dolls
Company’s first foray into a film based on its own products - The Lego Movie - proved to be one of the year’s biggest box-office hits.
Lego has seized the crown as the world’s biggest toymaker by revenues from Mattel, as the Danish construction bricks prove more popular than Barbie.
Boosted by The Lego Movie and its “Everything is Awesome” song, the Danish family-controlled company posted revenues of 11.5 billion Danish krona (€1.54 billion) in the first half, up 11 per cent on the year before.
That compared with Mattel’s $2.01 billion (€1.53 billion) for the first six months as sales of Barbie, Hot Wheels and Fisher-Price toys all fell.
Lego was already the world’s most profitable toymaker as it reaps the benefits of the alchemy that allows it to turn plastic costing $1 a kilo into toys that sell for about $75 a kilo.
Its operating profit rose 12 per cent to 3.6 billion krona in the first half, compared with a meagre $7.2 million profit for Mattel in the same period, as the $460 million acquisition of Mega Brands, the biggest construction toy rival to Lego, weighed on the US toymaker.
Lego has come back from near extinction a decade ago to become the most powerful global toy brand, with its construction bricks played with from China to Brazil. Its success has been tied to a number of film tie-ins, such as Star Wars and Harry Potter.
But its first foray into a film based on its own products - The Lego Movie - proved to be one of the year’s biggest box-office hits.
“We are thrilled by the reception of The Lego Movie products that provided a significant boost to our sales during the first half of 2014. The Lego Movie celebrated the creative potential in us all, which is also the foundation of any Lego product we develop,” said John Goodwin, Lego’s chief financial officer.
Lego enjoyed growth of more than 50 per cent in the first half in China, where it has just broken the ground on its first factory.
“There is a huge potential in Asia, and we are still learning and in the process of building our capabilities in the region. [A new office in Shanghai] and the new factory enable strategically important functions to be located close to our customers as well as children and parents in China and Asia,” said Bali Padda, chief operating officer
Most of Lego’s sales occur in the few weeks before Christmas so executives of the Danish group were cautious about how the rest of the year would pan out. But they are hoping for a lift from the release of The Lego Movie on DVD at the end of June.
Lego’s robust sales growth also stands in contrast to the continuing woes in the global toy market, which has been buffeted in recent years by children playing more using devices such as iPads and smartphones.