Lego Gets A Hollywood Ending For Its Half-Year Sales

Thanks to savvy product tie-ins with the hit computer-animated movie, “Everything Is Awesome” at Team Lego, which yesterday announced $2.03 billion in revenues for the first half of the year — up 11% over 2013 — moving it ahead of Mattel as the world’s No. 1 toymaker. 

Most toy sales occur in the second half of the year, of course, so the celebration is a tad restrained in the streets of Legoland.

“In all seriousness, we really don’t pay any attention to being No. 1,” Lego EVP and CFO John Goodwin tells the Financial Times’ Nordic correspondent, Richard Milne. “It’s not a goal we set ourselves. We are much more energized by the fact that we have double-digit growth in all three regions of the world.”

No doubt the ascension is also due to Mattel’s own stumbling in both the domestic and international markets, with headwinds projected by for the third quarter as well. 



“Lego’s rise has occurred over the same period that has seen Mattel struggle,” Brian Solomon points out in Forbes. “In July, Barbie’s company announced declining sales for its flagship, along with other key brands like Hot Wheels and Fisher-Price.”

“Lego also trounced Hasbro sales,” reports Alanna Petroff on CNN Money, “reporting revenue that was more than 30% higher than the board-game giant.”

Indeed, the growth of the bricks-related merchandise is notable, coming “despite continued difficulty in the toy business as children turn more to tablets and consoles during play time,” Jens Hansegard writes in the Wall Street Journal.

The surge “relied heavily on sales related to [‘The Lego Movie’]” Hansegard reports, which grossed $468 million worldwide through Aug. 21. The DVD is forthcoming this fall. 

The Lego Movie 2” will be released in 2017, “and Warner Bros. has already set the release of the ‘Ninjago’ movie — based on Lego's ninja-themed product range — for next year.”

“‘The Lego Movie’ celebrated the creative potential in us all, which is also the foundation of any Lego product we develop,” Lego’s Goodwin said in a statement cited by the AP. “Every Lego set must offer a versatile play experience that fosters creative building, and this is what we continually strive to deliver to children all over the world.”

It also fosters real moolah based on creative marketing.

“While other toy companies are scrabbling around to produce toys to tie in with movies, Lego has done things the other way around as the inherent versatility of Lego has enabled licensed movie-makers to create a perfectly targeted movie that is inextricably linked to the Lego product plus they have produced the Lego Movie box sets that complement the characters and settings,” Lloyd Harris, a professor of marketing at Warwick Business School in Coventry, England, tells Marketing Daily’s Sarah Mahoney in an email.

“The release of the movie was complemented by 17 Lego box sets of movie settings and 16 collectable Lego characters,” he continues. “This combined with other merchandising and the accompanying video game have heightened and enhanced the profile of the core Lego product while boosting revenue and profits.” 

Legos have played supporting roles in Hollywood in the past. 

“A deal with Lucasfilm to produce ‘Star Wars’ toys 15 years ago began Lego’s relationship with Hollywood,” Variety’s Marc Graser writes, but “the company has especially been aggressive lately in locking down licensing deals for more studio films and franchises as a way to keep kids interested in its play sets and mini-figures.”

It has also had tie-ins with “Pirates of the Caribbean,” “Harry Potter,” “Indiana Jones,” “The Lone Ranger,” “Prince of Persia,” “Toy Story” and “Jurassic Park,” Graser reports.

A former McKinsey & Co. executive, Jørgen Vig Knudstorp, was hired as Lego’s CEO by the family-run Danish company in 2004. He sold off theme parks, brought in partners such as Warner Bros., and refocused on producing all manner of brick-based products, reports the WSJ’s Andria Cheng on MarketWatch.

“Sixty percent of its sales are from new products created by a team of more than 180 designers. Unlike its rivals, Lego makes over 90% of its products at four company-owned factories in Europe and Mexico,” Cheng writes.

So what’s to worry? 

“Killjoys say 3D printing will crush the Lego model,” points outBloomberg Businessweek’s Kyle Stock. “It will no doubt present a challenge. But Lego has its own 3D printing patent.”

Maybe it won’t party forever — what does? — but for now Knudstorp’s team is surely living its dream.

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