Bloomberg — Lego A/S is targeting areas of the US where sales have been slow and expects a new $1 billion factory in Virginia, its first in the country, will help it win market share.
There are still large parts of the US where the maker of the colorful building blocks hasn’t yet reached the popularity it enjoys in Europe, its home market, according to Chief Operating Officer Carsten Rasmussen.
“Looking at the US potential, we still have a long way to go,” he said in a phone interview in connection with Lego breaking ground at the Richmond facility last week. “On the east coast and in the north, we’re already very strong but it leaves a lot of potential elsewhere and we think we can succeed with that over the coming years.”
Over the past decade, Lego’s strong brand has helped it leapfrog US rivals Mattel Inc. and Hasbro Inc. to become the world’s largest toymaker. The Danish company, which is owned by the billionaire Kirk Kristiansen family, has roughly doubled US sales over the last four years, but has had a hard time penetrating the southern part of the country.
“Over the next four, five years we expect strong growth in the American market,” Rasmussen said. “We want to have the extra capacity ready once we succeed in getting that extra demand.”
In addition to the Richmond factory, which will employ about 1,800 people and operate from 2025, Lego’s US plan includes making marketing strategies more specific to the country’s different regions, the COO said. Lego hopes its box sets aimed for girls, Lego Friends, will help it reach a broader US market, he said.
“We can also do more in terms of a stronger execution with our retailers,” he said.
Lego is currently serving the US market from its factory in Mexico, which it’s expanding at the same time. The company’s also building a new factory in Vietnam, adding to its existing facilities in Denmark, the Czech Republic, Hungary and China.
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