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Dinosaurs and sports car help Lego build recovery
SALES of Lego dinosaurs and a Bugatti sports car have helped the Danish toymaker stabilise revenue in the first half of this year, following a drop last year for the first time in more than a decade.
The privately-owned firm, famous for its colourful plastic bricks, hit the "reset button" last year, realising that its business had grown complicated.
Its attempts to recover have been hampered by the bankruptcy of the biggest American toy-store chain Toys'R'Us, but demand for new products such as the dinosaur-themed Jurassic World range helped to steady revenue in the first six months of the year.
Lego's chief executive Niels B. Christiansen said: "I am satisfied, because we set out to stabilise growth this year and we have already done it during the first half."
Overall, consumer sales grew 1 per cent during the half; revenue was flat in constant currencies and fell 5 per cent in Danish crowns to 14.3 billion crowns (S$3.07 billion) - a far cry from the 25 per cent growth achieved in 2015.
The fastest-growing ranges are the advanced Technic series, the warrior-themed Ninjago, The Creator range that can be built into several designs, and the Classic series. Successful innovation is crucial to Lego, as 60 per cent of its portfolio consists of new products each year. Sales in western Europe grew in the low-single digits, measured in constant currencies; North America declined slightly. China remained a bright spot with double-digit growth, although it accounted for under 10 per cent of group sales.
Lego plans to open two flagship stores in Shanghai and Beijing and continue its partnership with Chinese Internet giant Tencent. It is also working with local education departments, state schools and private education providers in China to get kids playing with Lego as a way to boost motor skills, creativity and attention spans.
Mr Christiansen said: "The Chinese appreciate and emphasise that children learn something when they play ... There is a really nice fit between China and Lego."
Lego, which competes with the likes of Barbie-maker Mattel Inc and Hasbro, the firm behind My Little Pony, is also betting on toys that combine the physical brick with the online world. One successful example is an app with which children can write a simple code to control a self-built Duplo train or Batmobil. REUTERS