Lego earnings rise despite coronavirus, plots new stores in China
The company plans to keep opening stores in China, the epicenter of the outbreak
COPENHAGEN, Denmark — Lego said its earnings rose last year and that it has so far avoided major damage from the new coronavirus and plans to keep opening stores in China, the epicenter of the outbreak.
After the Danish toy company posted Wednesday a 3 percent rise in net profit to 8.3 billion kroner ($1.2 billion), CEO Niels B. Christiansen said the group is weathering the virus outbreak's disruption to supply chains.
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“In the short run, it is hard to say, but it seems we are not that vulnerable, mainly because we produce regionally,” Christiansen told The Associated Press.
Lego produces in Mexico for its American markets, in China for its Asian market and the production for Europe comes from factories in the Czech Republic and in Denmark.
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Christiansen said the manufacturer of the famous colored building blocks was sticking to its plan to open an additional 80 stores in around 20 cities in China, which “remains a strategic growth market.”
Lego has 570 stores around the world carrying the toymaker’s logo.
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On top of that, Christiansen said Lego had developed its e-commerce presence on partner platforms and recently renewed its partnership with China’s tech giant Tencent as part of plans to engage consumers and shoppers.
Lego, which is Based in Billund, western Denmark, and is the privately held, said its 2019 full-year revenue grew 6 percent to 37.9 billion kroner ($5.7 billion). That is “despite significant investments in long-term growth initiatives,” the CEO said. Lego saw consumer sales globally grew 5.6 percent in 2019 compared with 2018.
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"We have seen a positive growth in sales while others had a negative growth,” Christiansen said.
Consumer sales grew in all markets: by single digits in America and western Europe and double digits in China.