Lego won't have enough Bricks for Everyone this Christmas

[kermit]

http://wtkr.com/2015...this-christmas/

LONDON — It turns out not everything is awesome for Lego.

The Danish toymaker will run short of bricks this Christmas, meaning it won’t be able to make enough toys during the peak holiday shopping season.

“We will not be able to deliver all of the new orders coming from customers in the remainder of the year in some markets in Europe,” Lego spokesman Roar Trangbaek said.

He did not specify which countries face a shortage.

Lego has been popular for years but its business really took off following the success of The Lego Movie.

Sales grew 18% in the first half of 2015, following 15% growth in 2014.

But the toymaker now admits it is struggling to cope with the surge in demand for its colorful stackable bricks.

“The high demand also puts a strain on our factories around the world,” Lego CFO John Goodwin said in a statement.

To try to ease the bottleneck, Lego is expanding its factories in Mexico, Hungary and Denmark. But the new capacity won’t be available until 2020.

The family-owned business became the biggest toymaker in the world in terms of revenue and profit in 2014, beating its rival Mattel.

The company made 60 billion Lego pieces last year. Its sales across Europe, the Americas and Asia grew strongly thanks to the success of The Lego Movie.

Lego Group has roughly 12,000 employees and is still owned by the Kirk Kristiansen family that founded it in 1932.

http://www.usatoday.com/story/money/nation-now/2015/10/21/european-lego-shortage/74353308/

Some families will have to let go of their Lego dreams this holiday season.

The Denmark-based toy company reports that it's doing so unexpectedly well that its manufacturers will not be able to keep up with demand come December. Right now, the shortage is contained to some European countries.

"The demand for Lego products during the first half of 2015 has been significantly higher than our and our customers' expectations and projections and this has put a strain on the Lego Group's manufacturing facilities globally," Lego press officer Roar Trangbaek wrote in a statement.

Factories are full-steam ahead, but it won't be enough for what it calls "unprecedented demand."

Lego Group's sales in the first half of 2015 increased by 18%, compared with the same period last year. Based on sales, they are now the world's largest toy company.

"For Lego, the seven-year average growth rate has been 20%," said David Robertson, author of Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry. "They've been growing like that since 2007, a 37% profit growth. This makes no sense for a company that makes commodity plastic blocks."

Thankfully, it looks like U.S. Lego lovers are safe for now, and the company is "closely monitoring the demand and taking action to secure our inventory for the holiday season," according to Trangbaek.

Robertson accounts the recent Lego boom to the company's ability to create supplemental products, both of its own brand and in partnering with other strong brands like Star Wars, Batman and the Avengers -- while keeping the classic bricks in play. (Last year's much-loved The LEGO Movie was a huge boost for the brand, too.)

He says the family-run company, which was started in 1932, faced failure when it tried to shift the brand away from physical Lego blocks. Instead, they changed their strategy. "They're a great example of how innovation actually doesn't have to be disruptive to be successful," he said.

Robertson likens Lego's success to Disney's profits around Frozen, in which blockbuster film sales translated into massive profits from retail, live shows and even a Scandinavian cruise.

There's also something iconic about the classic plastic building bricks. "My guess is that this sales success is due in part by Lego's geographic expansion," Robertson said. Lego is building a factory in China and continues to expand into that market.

"Once a family becomes middle class, at least by Western standards, they want buy Legos for their kids. That's exactly what's happening," he said.

Edited October 24, 2015 by kermit

[JopieK]

"dont know where their factory is located there": Kladno ;)

[kermit]

This explains why alot of sets are currently listed as out of stock on lego shop at home site.

[paul_delahaye]

Not that I'm selfish, but I've already got my sets for Christmas put away ready for the big day ;-)

It's obviously only going to be a couple of sets, which the national press no doubt help to promote causing the shortage.

[dr_spock]

Didn't they have trouble stocking small independent retailers last year?

Shop early to beat the crowd as they say.

[Velouria]

The shelves at my local toy store seemed to have a lot of holes in them when I visited yesterday. I'm not sure if this is the reason, but especially the Friends, Disney Princess and Elves boxes where thin on the ground. I wonder if there are any particular series that they have trouble producing enough of, or there is a shortage of everything?

Edited October 25, 2015 by Velouria

[BrickOn]

I got told by one of my local retailers that Lego was not taking any more orders from them until after Christmas and this was in august, although they did seem to get the order that they were waiting for. Some of their shelves were looking pretty bare.

[HawkLord]

I would always recommend shopping earlier to avoid these scenarios. It's no surprise that Lego's success is catching up to them, especially with Star Wars. There's just not a lot of other product out there to really compete, so I can see where they're dominating.

[TheBeeze]

A rep in a US store informed me that their orders have been reduced as well.

[AFOLguy1970]

Wait until the Star Wars movie comes out. At that point, a set based on the movie is likely going to be very difficult to find. We might get a news story about a fight breaking out over the last Millenium Falcon on the shelf. The holiday season in the US will ramp up in about 3-4 weeks with Thanksgiving. That is when several lines will start to quickly diminish, and this is nothing new. Since the Lego Movie came out, the Lego inventory tends to get wiped out quickly in the big box stores. Toys R Us had plenty of inventory this last weekend, but it will eventually get to the point where they will sell quickly even with the inflated prices. If you know what you or your kids want for Christmas, and you have the funds available, now would be a good time to pick up the sets.

[Velouria]

Yes, unless the Star Wars movie is the Lone Ranger all over again. Anyway, it will be interesting to see what they run out off.

[Vorkosigan]

You know Star Wars has already sold $6.5 million+ in tickets? Whether it will be good or not I don't know, but make a lot of money, it will.

The potential downside to this for me personally is that it could put a damper on the January clearances. If it does, oh well, just focus on the new 2016 sets.

[HawkLord]

It's funny how the Lego timeline can be measured by pre-Lego movie and post-Lego movie. Back before the movie, Lego wasn't that super hot. Sure, stuff would sell out, but only limited stuff like the Star Wars advent calendars. Now even regular sets are ones that can potentially sell out.

Who knew Emmet would change the game so much...?

[Velouria]

I think that the fact that they finally managed to find a decent way to tap into the female demographic has something to do with the current success. One thing that stood out to me in recent shop visits was how empty the "pink" Lego isle was. Especially many of the Disney Princess sets were hard to find. Really not my thing, but it seems these have found their audience. Especially anything involving "Frozen"!

[Sarah]

I think that the fact that they finally managed to find a decent way to tap into the female demographic has something to do with the current success. One thing that stood out to me in recent shop visits was how empty the "pink" Lego isle was. Especially many of the Disney Princess sets were hard to find. Really not my thing, but it seems these have found their audience. Especially anything involving "Frozen"!

I agree! I love the details in Friend sets.

[Aanchir]

It's funny how the Lego timeline can be measured by pre-Lego movie and post-Lego movie. Back before the movie, Lego wasn't that super hot. Sure, stuff would sell out, but only limited stuff like the Star Wars advent calendars. Now even regular sets are ones that can potentially sell out.

Who knew Emmet would change the game so much...?

I don't know if that generalization is really accurate. Back in 2012, the LEGO Group had a very hard time meeting demand on Friends sets (as mentioned in this press release). Even further back, the LEGO Group was heavily criticized by retailers like Toys 'R' Us for not being able to meet demand on the top-selling Bionicle sets for Christmas 2003 (a big mistake for them to make in a year when almost every one of their themes other than Bionicle was failing). LEGO shortages are nothing new, they're just becoming more widespread these days since demand is increasing faster than the LEGO Group has been able to increase their supply chain.

Edited October 27, 2015 by Aanchir

[Velouria]

The movie did well but the effect of it is limited. The Lego Movie sets have mostly left the market at this point. Demand remains high. They are doing a lot right, and I still suspect that the Friends series have something to do with this. They always had the boys and girls like me that like spaceships and such, but now they have the whole female audience. Judging from the amount of shelf space given to Friends, Disney Princess and Elves in the shops in my town (which is in Belgium, and things may be different elsewhere) these do extremely well. And most of this goes to buyers Lego didn't have 5 years ago. It's a new market added to the market share they already had.

[Ardelon]

So, I wanted to ask, was there a Christmas shortage in anyones experience?

From my experience, there didnt seem to be a shortage here in Bratislava, Slovakia, and Im under no illusions about the importance of our market for TLG. So I thought we would be hit by any shortage, but it didnt look that way.

Any other experiences?

[HawkLord]

I saw shortages in my area (Seattle) of SW TFA sets. Most other sets seemed to be in reasonable supply. I haven't seen the numbers, but I'm sure TFA merchandise was the best seller during the holiday season.

[xboxtravis7992]

I noticed that after the holiday season was finished all the toy sections looked really bare. I checked a Target in Salt Lake City Utah; most of the Star Wars, Superheroes, and Bionicle sets were just gone. Minecraft and Ninjago I think were missing to; but since they aren't themes I follow I don't remember. Lego was the only toy aisle in that store that looked so bare. Mind you it was a few days before 2016 started so maybe they wanted to clear some stock; but still.... I miss the days when I could find 2-3 year old sets at local stores; now I can hardly find the Lego Movie sets that were released in 2015.

[mediumsnowman]

I saw shortages in my area (Seattle) of SW TFA sets. Most other sets seemed to be in reasonable supply. I haven't seen the numbers, but I'm sure TFA merchandise was the best seller during the holiday season.

As you know, I'm in the same general area and every Target or TRU I went to was absolutely demolished for a week or two after Christmas. Nothing left except a couple of Pirates, Juniors, TFA snowspeeders, and a handful of less desirable Super Hero sets. (I'm looking at you, Riddler Chase )

Edited February 5, 2016 by mediumsnowman

[Vorkosigan]

Yes as others said I saw unusually bare LEGO sections in all the major chains. Walmart was particularly desolate. There was also substantially less after Christmas LEGO clearance (except Bionicle).

[Andy D]

I did not notice a substantially lower supply in my local LEGO store before Christmas, and I seldom frequent TRU, Target or WalMart (so I don't know about them)

I did go to the LEGO store January 1st for the new releases and the store seemed well stocked again. So.... No noticeable shortage here.

Andy D

[tgrbailey]

My local TRU was devoid of anything useful. until the end of January- just the older/less popular sets filling the shelves