COVID-19 and will it impact Lego's profits?

[AMD]

I'm very surprised no one, not even an AFOL or a LEGO youtuber is talking about this. A touchy subject you may say, but this is very important.

COVID-19 not only affects people around the world but it will affect businesses as well.  Most of the international stores that surrounds mainland china are closed and I'm pretty sure LEGO is one of them. LINK: https://www.nytimes.com/2020/02/07/business/coronavirus-business-impact.html

LEGO has said that they are planning to bring more consumers from china, mostly children, but during the epidemic, I'm not sure how this plan would go well. 

So I'm curious, please do share and debate as to how would LEGO do something to handle the situation.  Will it affect their sales drastically or will it just be a small margin and they make a backup plan to deal with the loss?

Edited March 17, 2020 by AMD
updates from the name of the coronavirus

[The Brick Boss]

I think it would just affect people there. Other places in the world, it won't affect. 

[dr_spock]

Sales-wise, maybe if the outbreak happen around the holiday shopping season.  It could impact the regional sales biggly.

Production-wise, LEGO has factories in other countries.  Maybe the electronic products like Powered UP could be affected if Chinese suppliers closed. 

 

 

 

[Pchan1983]

I think there will be impact for ASPAC region if the epidemic continues for few months.  Reason is that nowadays most sets in ASPAC are from the packing/distribution centre from CHINA, if that location is incapacitated then in the long run ASPAC region may have increased price or delayed release if supplies sourcing from Europe or America. 

[AMD]

1 hour ago, Pchan1983 said:

I think there will be impact for ASPAC region if the epidemic continues for few months.  Reason is that nowadays most sets in ASPAC are from the packing/distribution centre from CHINA, if that location is incapacitated then in the long run ASPAC region may have increased price or delayed release if supplies sourcing from Europe or America. 

Exactly. I'm from the Philippines and it may cause a lot of problems for distribution

[TeriXeri]

Hard to tell the full long-term international impact yet, as the situation still develops daily.

Edited February 8, 2020 by TeriXeri

[TeriXeri]

There was an upcoming Toy Fair in China in 2 weeks, but that's now postponed: 

Originally scheduled to be held from 6 – 8 March 2020 in Shenzhen, the three fairs will now take place at a future date which will be announced in due course. The postponement follows a recent notice by the Guangdong Province Department of Commerce to suspend all large-scale events due to the Novel Coronavirus outbreak.

https://shenzhen-international-toy-and-education-fair.hk.messefrankfurt.com/shenzhen/en.html

Edited February 22, 2020 by TeriXeri

[Toastie]

Honestly. Folks.

If it affects anything LEGO related - ABS plastic does survive almost any type of viral infection.

I do not care - none what so ever - about sales/distributions/what not - of plastic ABS pieces. It is so much more about people making it happen. Individuals. 

Should there be any type of ... "shortage" - so the hell what? It is because people suffer from a deadly disease, we hardly know much about. The bricks will survive. A lot of people won't.

Let us think about them.
Thorsten

 

[Mylenium]

On 2/7/2020 at 11:36 PM, AMD said:

Will it affect their sales drastically or will it just be a small margin and they make a backup plan to deal with the loss?

It's going to cost them, that's for sure, but how much is an open question. Then again one could go on endlessly about the delusional state of some companies about the markets in China and how important they actually sometimes are (or not) on a broader level. It's definitely going to put a dent into their end customer sales. That can't be avoided when shops are closed or nobody is going to the mall out of fear of contamination. Otherwise it should have limited impact. LEGO has had factory in Europe and the American continent for longer than in China, so whatever they need could easily be produced regionally as well without having to sit out a quarantine on some shipping containers. The Asian markets may be a different story, but I would argue that in a time where we're dangerously close to scraping on a global pandemic - despite all those containment measures - people have other things to worry about.

Mylenium

[Medzomorak]

Actually by the time it would hurt Lego really bad that'd be least of our concerns.

[Lyichir]

It's worth mentioning that any impacts to Lego would likely affect most of their competitors in the industry as well—perhaps even moreso in some cases, since Lego's production is still largely diversified between various global regions rather than concentrated entirely in Asia.

[AMD]

Just a quick update. This was posted February 23

According to the LEGO Group CEO, Niels B. Christiansen, the company’s China strategy will not be impacted by the coronavirus outbreak.

As the LEGO Group unveils upcoming products at New York Toy Fair, CEO Niels B. Christiansen has confirmed in an interview that the coronavirus outbreak in China will not affect the company’s plans there.

The LEGO leader told China Global Television Network: “We will continue in China like we have been doing, like we are doing. We continue investment, continue building our organization, continue trying to get the LEGO brand to many more families and kids in China.”

With China the production powerhouse of much of the toy industry, factory shutdowns due to the coronavirus outbreak have impacted supply chains.

“They [The government] have taken very serious measures quite quickly and come up with pretty clear guidelines,” says Christiansen in the interview. We’ve been following those guidelines and are pretty confident that kind of concrete measures would be a good way to deal with it.”

The LEGO Group has a strategy of expansion in China as the company struggles to continue the annual growth it has enjoyed in Europe and the USA over the past decade.

https://www.brickfanatics.com/lego-ceo-says-coronavirus-outbreak-will-not-impact-china-strategy/

Edited February 26, 2020 by AMD

[The Brick Boss]

@AMD Well that's a relief.

[Mylenium]

4 hours ago, AMD said:

As the LEGO Group unveils upcoming products at New York Toy Fair, CEO Niels B. Christiansen has confirmed in an interview that the coronavirus outbreak in China will not affect the company’s plans there.

They can plan all they want, but of course million-people cities and transportation being shut down will affect them as much as any other company. That's just typical corporate BS.

Mylenium

[Lyichir]

On 2/26/2020 at 2:07 AM, Mylenium said:

They can plan all they want, but of course million-people cities and transportation being shut down will affect them as much as any other company. That's just typical corporate BS.

Mylenium

They're not saying the company won't be affected by the disease, just that their plans for development and expansion in the region aren't going to be changed or called off because of this outbreak.

[AFOLguy1970]

It is probably time for the Lego Stores to suspend the Pick-a-Brick walls, Build-a-Minifigure bins, and any other interactive areas in the store with bricks.  We are starting to get cases where I live, and the above mentioned things would be a perfect breeding ground for the stuff to spread.  It is not like you can disinfect every element after someone sticks their hand in the bin.  Better safe than sorry.  

[TeriXeri]

Italy closed all non-essential stores, certainly will have some impact there on LEGO retailers.

Edited March 12, 2020 by TeriXeri

[jpx]

9 hours ago, AFOLguy1970 said:

It is probably time for the Lego Stores to suspend the Pick-a-Brick walls, Build-a-Minifigure bins, and any other interactive areas in the store with bricks.  We are starting to get cases where I live, and the above mentioned things would be a perfect breeding ground for the stuff to spread.  It is not like you can disinfect every element after someone sticks their hand in the bin.  Better safe than sorry.  

I thought just that, when visiting the Copenhagen Lego shop two days ago and seeing a lot of people all around a huge tray with the new Dots 1x1's....

[Digger of Bricks]

Several days ago, LAN sadly announced that a meet-and-greet with set designers @Nabii, @marcosbessa, and Justin Ramsden had been postponed to 2021 due to the outbreak, and now they've closed the LEGO House...

• The Brick Fan - LEGO House From AFOL to LEGO Designer Event Postponed Until 2021
• The Brick Fan - LEGO House Closed Due to Coronavirus

I guess it's safe to say that they'll also not be hosting the annual LEGO Fan Media Days event at all this year either... 

[Vindicare]

On 3/11/2020 at 7:40 PM, AFOLguy1970 said:

It is probably time for the Lego Stores to suspend the Pick-a-Brick walls, Build-a-Minifigure bins, and any other interactive areas in the store with bricks.  We are starting to get cases where I live, and the above mentioned things would be a perfect breeding ground for the stuff to spread.  It is not like you can disinfect every element after someone sticks their hand in the bin.  Better safe than sorry.  

I had similar thoughts. Plans fell through, but I was heading to a few stores with a friend on Saturday. We always check out the BaM & Wall, focusing this time on the new exclusive bits in the BaM towers. I was definitely hesitant about digging around too much in there. Figured I’d just bring a bottle of sanitizer & squeeze out a big ol’ glob of it after I was done. 

[koalayummies]

Lego's bricks and pieces service has closed:

Quote

Due to COVID-19 we’ve had to introduce special measures at all our sites to reduce the risk of infection, including reducing the number of people who can work together at any one time to pick bricks for Bricks & Pieces. Buying bricks therefore isn’t available at the moment. This only applies to Bricks & Pieces - everything else is business as usual. We’ll have the service back up and running as soon as possible.

Denmark is also closing its borders for 4 weeks, goods will reportedly still be able to cross. Copenhagen Post

[TeriXeri]

LEGO Brand Stores close following COVID-19 - Brickset

https://brickset.com/article/49365/lego-brand-stores-close-following-covid-19

Also Twitter @LEGO_Group :

Edited March 18, 2020 by TeriXeri

[The Brick Boss]

2 hours ago, TeriXeri said:

 

Well. At least I have Wal-Mart. 

[Toastie]

15 minutes ago, Brandon Pea said:

Well. At least I have Wal-Mart.

To get something to drink and eat, right? Things are getting a little tight at least in Germany - availability of LEGO bricks are of very, very little concern the coming weeks.

Best
Thorsten

[Lego David]

How long do you guys think this crisis will last? I've heard reports saying that it may last for the entirety of 2020. If that's the case, than it's going to be a very hard year for LEGO...