Lego Rebuilds And Now Can’t Keep Up With Demand

lego-rebuildsLego is one of the most recognized brands in the world.  As a matter of fact, the building block toy company has increased sales in Asia and Europe by an average of 15 percent every single year for the past 12 years.  Last year, they posted a 25 percent growth rate.

Unfortunately, though, while sales in Asia and Europe have already amassed double digit growth through the first half of this year, growth in the Americas have not been so noteworthy.
In 2015, North America was easily determined to be the biggest toy market in the world.

But Lego was not able to keep up with demand so the company attempted to slow sales by reducing marketing activities; indeed, it did lead to a slowdown through the first half of this year, reported Lego chief financial officer John Goodwin.

He notes, “We are working very closely with our retail partners to ensure that as we go into the important holiday season, the back half of 2016, that we’ve got all of the levers pulled to get back on the growth trajectory.”

So now, Goodwin explains that the company has a new global investment plan. This plan involves the investment of a new factory in Jiaxing, China and the expansion of production capacity in Monterrey, Mexico and to double the capacity at the company’s plant in Hungary.  This led the company to recruit more than 3,500 new employees through the first six months of 2016.

Goodwin continues, “We feel we need to invest, to build some breathing space,” adding, “These investments in people and infrastructure will obviously have an impact on our short-term profit growth. But they are part of our long-term plan to sustain the development and delivery of fun.”

This growth is incredible; you have to appreciate a company who was near bankruptcy only ten years ago and now can’t seem to keep up with demand.

Goodwin goes on to say, “These investments in people and infrastructure will obviously have an impact on our short-term profit growth. But they are part of our long-term plan to sustain the development and delivery of fun, high quality, and creative play experiences for more children in more parts of the world in the future.”

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