Last year toymaker Lego reported that its sales had increased 17% to $9.27 billion, a surprising turnaround after almost going bankrupt a decade ago.
Key Details
- Despite Lego’s struggles in 2003, the company is now soaring past its competitors Mattel and Hasbro.
- In 2014, Lego surpassed Mattel in sales, and Lego’s present-day revenue is now nearly twice Mattel’s.
- The Danish toymaker is also passing toy-making giant Hasbro, which announced plans to reduce its staff by 15% and had a recent 9% revenue decline.
- Lego has survived difficult economic situations by focusing on vertical integration, introducing new products, expanding its retail footprint, and establishing a digital presence.
Why it’s news
The 40-year-old toy-making company struggled in the early 2000s, nearly succumbing to bankruptcy in 2003. Now, Lego stands out from the competition.
In the last year, 48% of Lego’s available products are new toys rather than recycling old models. The company has also rapidly expanded its retail space, opening 155 new shops in 2022. Many of the shops were focused on Chinese markets. The company now has a total of 904 stores globally.
Lego was well-positioned to weather supply-chain issues during the pandemic due to its vertical integration methods—Lego controls many stages of its manufacturing process and does not have to rely on third parties as often as its competitors.
The company’s manufacturing process is also expanding. Just last year, it broke ground on a new facility in Vietnam and currently has plans for another facility in Virginia.
Though Lego is known for its physical building blocks, the company hasn’t been afraid to dive into the digital world. Its Builder App, which allows customers to find and save building instructions for various Lego models, was downloaded around 13.6 million times last year, The Hustle reports.
Lego Life, the company’s social-media app, was downloaded 7.1 million times.
Looking ahead, Lego also plans to invest in metaverse technology. It has a $1 billion partnership with Epic Games to design a kid-friendly virtual world.