Lego's Growth Balances Annual Sales Decline in the Toy Sector

Investing.com -- The toy industry is facing declining sales for the second consecutive year, while Lego's success paints a hopeful picture. Many toy companies are struggling to maintain the sales growth seen during the pandemic, while the Denmark-based firm Lego is experiencing rapid growth. The company's revenue increased by 13% in the first half of the year, allowing it to gain market share.

Eric Handler, managing director of Roth MKM, noted that Lego's success has driven the industry's growth this year. Having come close to bankruptcy in the early 2000s, Lego transformed its business and diversified its customer base. This strategy has enabled it to increase sales even in inflationary market conditions. The company has reported positive annual revenue growth for the past six years.

Lego's growth strategy includes elements such as licensing agreements, targeting both adults and children, expanding into digital gaming, collaborating with studios and publishing services to provide Lego content, and setting up production facilities near distribution centers to optimize its supply chain.

The company's successful products include emphasized "passion points" or kits appealing to a broad consumer range. Among these are fans of franchises like Star Wars and Harry Potter, car enthusiasts, and animal lovers.

James Zahn, editor-in-chief of The Toy Book, praised Lego's ability to challenge industry trends. According to Zahn, when other companies struggle, Lego often succeeds. He attributed Lego's agility during inflationary periods, disruptions in the entertainment sector, and potential tariff increases to its ability to stay “ahead of the curve.” Zahn stated that Lego appears to be two to three steps ahead of its competitors.