Lego reports massive increase in sales in 2020

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Amanda Salazar | The Ticker

Gabriel Rivera, Science & Technology Editor

Lego announced that it saw a surge in revenue and consumer sales last year at the company’s 2020 Annual Results Press Conference earlier this month.

High demand sparked by global, pandemic-related lockdowns in 2020 contributed to a 13% increase in the company’s revenue compared to 2019 and a 21% increase in its consumer sales, according to a statement released by Lego.

Lego CEO Niels Christiansen touted the numbers as proof of the “timeless relevance” of the toy bricks and “learning through play,” according to the statement.

“This performance is also a testament to the passion, creativity and resilience of our people. Despite the challenges of the pandemic, they worked tirelessly to keep the world playing,” Christiansen added.

In the statement, Lego also highlighted that its success last year was heavily owed to “more people of all ages building with Lego bricks.” Lego attributed this increase to its diverse array of products that appeals to a variety of interests and ages.

Some of its best-selling products from last year include Star Wars and Super Mario-themed Lego sets, according to the statement.

Christiansen noted during the press conference that the company’s global manufacturing network, which allowed it to reach its largest markets during the pandemic, along with continued success in China, allowed Lego to enjoy success in a year where many businesses struggled.

Lego opened its first flagship location in China in 2016 and has steadily increased its presence throughout the country since then. 91 of the 134 retail locations Legoopened in 2020 were located in China, and the toy giant plans to have almost 300 stores in the country by the end of 2021, according to CNBC.

Lego’s 2020 success was mirrored by some other major toy companies, as Mattel announced they had a 2% annual net sales growth last year, according to Reuters. Hasbro also reported an almost 30% increase in sales this January alone due to the abundance of gift cards purchased during the holiday season, according to The Wall Street Journal.

These trends were part of a nationwide jump in sales within the toy industry throughout 2020, as the NPD group reported retail sales of toys in the United States grew by 16%, racking in a total of $25.1 billion, according to the Business Journals.

“The growth we’ve seen in the toy industry speaks to the fact that parents are willing to put their children’s happiness above all else,” said Juli Lennett, vice president and industry advisor of the NPD Group, in a press release from the research firm.

“The industry’s resiliency is very much underpinned by the reality that, in times of hardship, families look to toys to help keep their children engaged, active, and delighted. Put simply, toys are a big part of the happiness equation,” Lennett added.

While there was a general increase in the U.S. toy industry, Lego also enjoyed sustained success worldwide because, unlike other toy brands, it has a reputation of being among the most trusted companies and was named the world’s most loved brand in 2020.

Current toy trends indicate Lego’s success will not stagnate in 2021. With families still spending most of their day at home, kids and adults alike have turned to toys as an escape from uncertain times.

This has been characterized as part of the “kidult” trend, which has sparked a renewed interest in building toys and games that are fun for all ages and even provide educational benefits for kids.

Social media was another catalyst in toy trends last year, as many consumers purchased toys promoted or inspired by creators on TikTok and YouTube.

Christiansen acknowledged the role social media had in Lego’s successful 2020, noting that a new Lego creation is uploaded to social media every 2.7 seconds by kids or adults around the world.

“The past year has shown the importance of having an agile, responsive business built on strong digital foundations,” Christiansen said.

“We will further develop our capabilities in this area so we are well positioned to meet the evolving needs of our retail partners and consumers now, and in the long term,” he added.