Lego for girls: Building profits by catering to girls
Lego for girls: The Lego Friends, a Lego product line designed for girls, is a big hit. The new Lego blocks boosted sales by 25 percent in 2012.
Copenhagen, Denmark — Lego's sales soared 25 percent last year thanks in part to its new series of building blocks designed for girls.
The privately owned company said Thursday that on revenue of 23.4 billion kroner ($4.2 billion) its net profits grew 38 percent, to 5.6 billion kroner ($1 billion).
The company, based in western Denmark, said the Lego Star Wars and Lego Ninjago series remained among the more popular, but it was a novel rollout for girls, Lego Friends, that sold better than expected — to the extent that production units were unable to keep pace with demand.
In the United States, Lego Friends surpassed early projections, with its sales eventually increasing three times more than expected, Lego said.
The new line, which includes mini-figures in pink, a dream house with a pool, and a beauty shop, was criticized by some U.S. consumer groups as reinforcing gender stereotypes.
Until now 90 percent of Lego sales have been for boys. But as Market Watch notes, other companies that have had success with boys have found a way to broaden their market to the other gender.
Lego is not the first toymaker to give a popular product a sex-change operation in an effort to boost sales. Nearly half a century ago, toymaker Hasbro found a way to sell dolls to boys: call them something else. “G.I. Joe” and Star Wars dolls were dubbed “action figures.”
Many manufacturers are also increasingly going beyond traditional gender roles, says Laurie Schacht, co-publisher of TheToyInsider.com. For example, Mattel launched “Mega Bloks Barbie Build ‘n Style” last December, the first time in its 50-year history that Barbie has dirtied her hands in construction. “Construction has traditionally been a category for boys,” Schacht says, “but it’s good for the development of all children.” Mega Bloks Barbie also sticks with Lego’s pink color scheme and neighborhood themes like pool parties and aspirational mansion-style homes.
Lego said its share of the total U.S. toy market has quadrupled in five years. As of the end of 2012 it was 7.9 percent, up 1.6 percentage points from the previous year.
Markets in North America, Asia and Europe delivered "impressive" sales results, the toy maker said, while growth in some southern European markets were "more moderate but still in healthy single digits."
The company, which sells products in more than 130 countries, expects sales to continue to climb in 2013, but at a slower rate due to global economic uncertainty.
Lego is not publicly listed but has published earning reports since 1997. It does not release quarterly figures.