LEGO is looking to open more than 160 new stores this year and invest heavily into e-commerce in order to avoid the pitfalls the likes of Toys R Us and more recently the Nordic region’s Top Toy have fallen into.
Drawing lessons from the collapse of the toy retail giant, Toys R Us, LEGO’s chief executive Niels Christiansen has detailed his plans to increase LEGO’s physical store presence by 40 per cent in the next year.
Plans will see the Danish toymaker make a big push in Asia, where it is on track to have 140 stores in China, in 35 different cities by the end of the year. It will also open an office in India as part of an attempt to crack the country.
“We want to ensure that we stay really relevant even though there will be changes in the retail landscape,” said Christiansen. “We still need kids to discover LEGO. It’s about making sure we have the right access to kids.”
The company revealed this week that it had increased its revenues in the first half of the year by four per cent to $2.2bn. Christiansen said LEGO had taken ‘the active choice’ to bring down operating profits by 16 per cent to DKr 3.5bn to invest more.
“We have the ambition of getting to as many kids as we can around the world, and getting to that means we have to keep gaining market share. We would rather do the investments upfront to be leading that change,” added Christiansen.
“Within 10 years, there will be 100m kids in India living in middle-class families. They ar strong into education and products like LEGO are very high on the wish list. The idea would be to get on some kinds of journey like we are on in China.”
As well as an investment in new products such as LEGO Hidden Side – a blend of the physical and digital play spaces via AR technology, the toy firm is “investing heavily in e-commerce” with updates to its online platforms, and ensuring its VIP loyalty programme works across its websites, including Legoland.