Danish toymaker LEGO has seen sales and profits take a knock in the wake of the collapse of Toys R Us, with a fall of five per cent in the first six months of the year.
Sales have hit $2.2bn in the first half of trading while operating profit has dropped four per cent to $650 million.
Last year, the firm’s chief executive said LEGO was looking to 2018 as “a year to stabilise and create a platform for sustainable growth,” after it posted its first annual decline in sales and profits in more than a decade.
Despite the fall once again, CEO Niels Christiansen has said the turnaround is on track. Both sales and profit were affected by the weakening of the dollar, with LEGO’s consumer sales actually rising one per cent in the first half.
“Our aim for this year is to stabilise. Anything better is a bonus. We are encouraged by the business already stabilising,” said Christiansen.
He also said that he was encouraged by LEGO being able to compensate for the disruption from the bankruptcy of Toys R Us earlier this year. He said LEGO was trying to encourage more direct sales through its internet site and shops – with it due to open two flagship stores in Shanghai and Beijing in the next six months.
“We have managed to get the same amount of products to consumers through fewer channels,” he added.
LEGO is not alone in its current sales drop. Mattel recently reported first half sales dwon nine per cent to $1.5bn while its operating loss more than doubled to $466 million. Hasbro, likewise, saw sales down 11 per cent in the first half.