• Market Crumbs

Lego Posts Strong First Half

Image via Jan Huber on Unsplash

Legos have been one of the most popular toys for decades. With the coronavirus lockdowns limiting what people can do, a lot of people are turning to legos.

Lego reported a 14% jump in sales in the first half of this year with a more than 10% increase in key markets such as the Americas, western Europe, Asia Pacific and China. Lego also reported growth in operating profit while the brand’s global market share increased.

"During the first half, we saw the benefits of our investments in long-term growth initiatives such as e-commerce and product innovation," Lego CEO Niels Christiansen said. "Our strong portfolio appealed to builders of all ages and our recently upgraded e-commerce platform and agile global supply chain allowed us to fulfill online demand."

Upgrades to Lego's website have paid off as the company reported more than 100 million visitors in the first half of the year, which is double the amount from the same period last year. Lego continues to invest in creating experiences that blend digital and physical play. Downloads of digital building instructions doubled to two million in the first half of the year as a piece of content was shared on the LEGO Life app every two seconds.

"Many of the major trends shaping our industry, such as digitalization and e-commerce, are accelerating as a result of the pandemic," Christiansen said. "We saw strong growth in digital and traditional play, a rapid shift to e-commerce and the importance of having a truly global operating model."

Despite its digital push, Lego isn't abandoning its retail stores. Lego opened 46 new retail stores in the first half of the year with 30 of them in China. For the year, Lego plans on opening 120 new retail stores, with 80 of them in China.

Lego, which is the world's largest toy company, most importantly used its position to give back during the pandemic. Lego donated $50 million to a range of organizations that provide emergency relief to families and support for children. Lego also donated 250,000 sets to children in need of play, while also manufacturing 500,000 visors in its factories for health care workers.

"I am incredibly proud of the team and how they responded," Christiansen said. "We kept each other safe, we took care of those most in need and we did everything we could to inspire children and families, whose lives were put on hold, to learn through play."

Lego continues to benefit from a product that never goes out of style as people of all ages repeatedly purchase their toys. With the holiday season approaching and many people remaining stuck in their homes, Lego should continue to see strong sales.

Leftover Crumbs

  • ADP report misses expectations. Private payrolls increased by 428,000 in August, coming in well below expectations of a 1.17 million gain, according to ADP. Companies with more than 500 employees added 298,000 employees last month, while medium businesses added 79,000 and small businesses with under 50 employees added just 52,000. Sectors that were hit hard by the coronavirus such as leisure and hospitality showed the largest gain as the bulk of job gains for August were from services.

  • Germany eyes Apple-Epic fight. German antitrust regulators are keeping an eye on the legal battle between Apple and Epic Games over the App Store's payment terms, saying it could spark a similar inquiry in Germany. "This has most certainly attracted our interest," Federal Cartel Office head Andreas Mundt said. "We are at the beginning, but we are looking at this very closely." The Federal Cartel Office can't fine companies but typically pushes them to make changes following probes into whether they're abusing their position in the market.

  • MJ invests in DraftKings. Michael Jordan has taken an undisclosed equity stake in DraftKings and will serve as a special advisor to the company's board. As part of his role at DraftKings, Jordan will provide strategic and creative advice on product development and marketing. "Michael Jordan is among the most important figures in sports and culture, who forever redefined the modern athlete and entrepreneur," DraftKings co-founder and CEO Jason Robins said. "The strategic counsel and business acumen Michael brings to our board is invaluable, and I am excited to have him join our team."

  • Macy's will try something new. Macy's will test smaller stand-alone locations outside of shopping malls as well as a Bloomingdale's store off-mall. Macy's, which had 771 stores at the end of the second quarter, announced in February that it will close 125 stores within three years. "We continue to believe that the best malls in the country will thrive," Macy's CEO Jeff Gennette said. "However, we also know that Macy's and Bloomingdale's have high potential [off]-mall and in smaller formats."

  • Unilever to eliminate fossil fuels. Unilever will invest one billion euros to eliminate the use of fossil fuels in the production of its cleaning products by 2030. The products will begin to use plants, marine sources such as algae and waste materials. The investment will be used to finance research and increase production of biodegradable and water-efficient product formulations. "The writing is on the wall.. the next phase is industry change in chemicals and cleaning agents ....many of these big suppliers still have a lot of capital still locked in the old carbon economy," Unilever president of Home Care Peter ter Kulve said.