A leading UK newspaper has backed the LEGO Group’s model for growth despite the reported dip in profits.
The UK’s leading financial newspaper, The Financial Times, believes that the LEGO Group has a “robust growth model”. A comment piece in the broadsheet notes that the company is facing the problem of attempting to grow in a saturated market – the West has pretty much reached its peak LEGO point, which is why growth is only in the single figures.
In the 2019 first half results though, double digit growth was reported in China with mentions of India as another market for significant expansion. According to the FT, the LEGO Store expansion in these markets should lead to sales growth: “Shops create experiences, promoting the brand in un-LEGOed parts of the world, including China.”
The comment piece also notes that the consolidation of LEGOLAND is significant, as the theme parks are part of a brand that encompasses films, products and digital experiences.
“We are satisfied with our performance given the transformative shifts which continue to reshape the global toy industry,” said LEGO CEO Niels B Christiansen as the results were announced.