Lego sales up, profits down as investments fall short

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Lego CEO new stores Niels B Christiansen
Lego aims to launch over 140 shops in 35 cities by the end of 2019
// Lego first-half revenue reaches £1.81 billion
// Net profit dropped 12% during the period to £330 million
// It will open over 70 stores outside of China during 2019

Lego’s half-year revenue has risen by four per cent in the first half of 2019, although investments did not pay off as net profit dropped 12 per cent during the period.

The Danish toy retailer reported first-half revenue of 14.8 billion kroner (£1.81 billion), while net profit dropped to 2.7 billion kroner (£330 million).

Lego chief executive Niels B Christiansen said the retailer was “satisfied with performance given the transformative shifts which continue to reshape the global toy industry”.

Christiansen said the investments were meant to grow, open new markets in China and India and develop online sales platforms, among other things.

The privately-held group does not release quarterly figures.

Consumer sales in established markets such as the Americas and western Europe grew by single-digit percentages.

China, which Lego views as “a strategic growth market,” continued its strong double-digit growth in consumer sales.

Lego is currently increasing the number of own-brand stores, while also investing heavily in ecommerce as it looks for further growth in the toy industry.

The company has around 500 stores across the globe, and said it will continue to invest in China.

It added that it will have more than 140 shops in 35 cities by the end of the year.

In addition, more than 70 stores will open outside of China during 2019.

Moreover, there are plans to grow the Lego presence in India, with proposals set out to open a Mumbai office early next year.

“The growing middle class, the importance of education and growing economy make India a logical next step in our efforts,” Christiansen said.

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