What's going on?
Lego announced record 2021 results on Tuesday, after the world’s biggest toymaker spent the year carefully assembling a winning strategy.
What does this mean?
Lego was given a new lease of life in 2020, when tinkerers of all ages replaced a world they were locked out of with one made of blocks. And turns out it’s a hard habit to kick: Lego fans rushed back to the company’s reopened stores last year, in hopes of getting their hands on one of its must-have Harry Potter and Star Wars kits. That demand didn’t just offset the company’s higher costs: it made Lego one of the few retailers to open stores last year – 165 of them, to be precise. That drove its revenue 27% higher last year than in 2020, and its profit up by more than a third – both to record highs.
Why should I care?
The bigger picture: Lego’s building.
Lego has been dominating the toymaking market for years now, and that’s partly down to some smart planning: the company builds production facilities close to where it wants to sell its toys, meaning it reduces the logistical costs and challenges that most of its rivals are facing. That’s been especially important in the last 18 months or so, when supply chains have been all blocked up. And it’s not stopping now: Lego’s planning to start building its sixth global factory in Vietnam soon, as part of a $1 billion push to tap into the Asian market (tweet this).
Zooming out: A jawline made for Hollywood.
Still, Lego’s update shows that it isn’t immune from higher costs, and nor are its rivals. That might be why Barbie-maker Mattel said last month that it’s planning to push into areas like gaming, filmmaking, and NFTs to help boost sales. It’s not a bad idea: projects like those aren’t wrapped up with supply chains, and a world as calamitous as this needs – no, deserves – Ryan Gosling as Ken.