Business has been so profitable that Lego did something few other companies have ever done: they tried to find ways to discourage customers from buying Legos. The Danish company pushed back advertising after there was a 25% rise in annual sales, according to a report from Reuters. They were not able to produce enough toys to quell demands in North America and they needed the time to boost capacity and increase hires.
“We feel we need to invest, to build some breathing space,” John Goodwin, Lego’s chief financial officer, told Reuters.
Lego is a family-owned company that was founded in 1932. It has had unrelenting success, with thousand and thousands of sets released over the years. They have some coveted licensing deals with popular brands like Disney, Angry Birds, Harry Potter, and Star Wars. They have even taken on architecture, having buildings like the Statue of Liberty, the White House, and even the Ghostbusters firehouse. They have gone from a children's toy to a hobby through adulthood.
There are even six Legoland theme parks, 125 retail stores, and many video games. There was even a Lego Movie that made $468.1 million.
The company's revenue increased over the last 12 years at a steady rate of 15% per year, something unheard of in the toy sector. However, the efforts to put a stoppage for at least a while. Sales were flat during the first half of 2016 in the Americas, though sales grew in Europe and Asia. The revenue rose 11% to $2.35 billion.
There is hope that the production values will increase for the holiday season:
“We are working very closely with our retail partners to ensure that as we go into the important holiday season, the back half of 2016, that we’ve got all of the levers pulled to get back on the growth trajectory.”
The company will build a huge factory in China and expand all existing plants. They hired 3,500 new employees int he first half of this year.
“In the past decade we have seen LEGO sales growth in the double digits year after year,” Goodwin said in a statement in October. “We are of course very excited about this development. [But] the high demand also puts a strain on our factories around the world.”