LEGO wants us to think of its brand not so much as a toy, more as a way of life. In the 1990s, the company set itself a target of becoming the world's favourite family brand, using its building blocks to capture the hearts and minds of children and their parents everywhere. Inevitably that led to a certain relaxation of the company's original educational learning principles. Instead, LEGO learned to play the movie licensing game, scoring successes with Star Wars and Harry Potter tie-ins. But attempts to accommodate children's demands for ever more high-tech games proved rather more challenging, and the group struggled to find a viable path forward between 2000 and 2005. A shift by consumers towards traditional values as well as LEGO's growing sophistication over licensing has resulted in strong recovery since 2007. Over the following five years, revenues virtually tripled, allowing the company to overtake Hasbro during 2013 as the #2 toymaker worldwide behind Mattel. During 2017, it became the global #1, helped significantly by changes in exchange rates and a movie and games partnership with Warner Bros, that spawned the enormously popular 'The LEGO Movie' and several slightly less successful sequels. In 2020, revenues soared to around $6.7bn (DKk 43.7bn), more than $1bn higher than both its US rivals, while net profit was approx $1.5bn. The Star Wars tie-in is still among the group's top-sellers along with more sophisticated powered or computerised kits such as LEGO Creator and LEGO Technic for older kids. LEGO Super Mario, a partnership with Nintendo, was a substantial hit in 2020. In addition to sales through third-party retailers, LEGO also controls its own fast-expanding branded retail network, now with almost 680 outlets worldwide. The Kristiansen family, descendants of LEGO's founder, still control the business through holding company Kirkbi and the charitable LEGO Foundation. Thomas Kirk Kristiansen is chairman of the board. Non-family member Niels Christiansen is CEO of LEGO Group. Kirbi also has a large minority stake in Merlin Entertainments, which runs LEGOland theme parks in eight countries, as well as other attractions including Sea Life marine parks, the Madame Tussauds waxwork museum, the London Eye and Alton Towers in the UK.
Capsule checked 9th October 2019
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Historical profile information for LEGO
Adbrands Daily Update 4th Nov 2020: "And I Think To Myself...". LEGO's inhouse agency really went to town for this lavish special, which is designed to keep the world's favourite toy front of mind for the holiday season. We confess that, after a year like this has been, we really need a reminder of what a wonderful world this could or should be. However, undoubtedly the most surprising aspect of the Lego Agency's whole two-minute extravaganza is not the profusion of visual effects but the decidedly un-LEGO-style off-colour joke at the 1:11 mark. Not what we were expecting at all in the midst of what is in every other respect a squeaky clean family friendly film!
Adbrands Daily Update 17th Sep 2019: "Rebuild the World". Toymaker LEGO today unveiled what must be its biggest and most lavish advertising campaign ever, in a collaboration between BETC Paris and the company's inhouse LEGO Agency. The concept of course is "What if the LEGO world was real?" But in keeping with company rules - which forbid any representation of guns (though not hunting) - the protagonists here wield pretty a harmless-looking bow and arrow. The new campaign follows in the wake of half-year results that showed LEGO to be better shape than its two main US rivals Hasbro and Mattel but still under intense pressure. Sales were up, but higher investment in new stores and infrastructure caused a sharp decline in operating margins and profits. It's a tough market out there, but this joyful new ad should help to underpin better performance in the critical holiday season ahead.
Adbrands Daily Update 28th Feb 2019: LEGO's lead over its US rivals Hasbro and Mattel continued to widen as the Danish company returned to growth after a dip in performance during 2017. Revenues for 2018 rose 7% in constant currencies, or 4% reported, to the equivalent of $5.75bn, more than $1bn more than both the American toymakers. Net profit was almost $1.3bn. LEGO said that most markets enjoyed single-digit growth, but China was into strong double-digits.
Adbrands Weekly Update 9th Aug 2018: Ads Of The Week "LEGO Safety Video". No airline worth its salt would dare to go without a comedy safety video nowadays, preferably a new one every year or so. Actually it makes plenty of sense. It's virtually impossible to get passengers to pay attention to the same demo they've already seen multiple times in a bunch of different carriers, so the best way to ramp up attention levels is with humour and variety. That strategy was first adopted by smaller carriers like New Zealand Airlines and Virgin Atlantic, but now everyone does it, and the stakes get higher - or rather more expensive - every year. The answer of course is cross-promotional marketing. Turkish Airlines kills two birds with one stone - cost-wise at least - by partnering with Warner Bros for a safety film that hypes the next LEGO Movie, due next year. It's impossible not to watch. Safety messages delivered!
Adbrands Weekly Update 8th Mar 2018: Annual results from iconic toymaker LEGO were either good or bad, depending on your point of view. On one hand, currency fluctuations have officially elevated the company into the global #1 spot among toymakers, with sales in equivalent US dollars of $5.3bn, compared to $5.2bn for Hasbro and $4.8bn for Mattel. Net profits too were far above US rivals at $1.2bn in equivalent dollars. However, in LEGO's domestic currency of Danish Krona, the group suffered the first decline in sales for more than a decade, while net profit plunged by 17%. "This was a challenging year, and overall we are not satisfied with the financial results," said new CEO Niels Christiansen. "There is no quick fix and it will take some time to achieve longer-term growth." The biggest challenge, apart from exchange rates, is continuing weakness in North America and Europe, though this has to a large extent been offset by double digit percentage growth in Asia, especially China.
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