LEGO, the world’s most popular toy brand, is warning parents that some children may be disappointed over the festive period as its factories, working at full capacity, are struggling to keep up with the demand from European consumers.
The Danish block-building toy company, which last year overtook the Barbie-producing Mattel as the best-selling brand worldwide, is predicting difficulties with filling orders from toy shops in time for the Christmas rush.
LEGO’s success is thanks partly to the toy’s licensing agreements with a number of popular franchises, including Star Wars, Harry Potter, and the Marvel Cinematic Universe. These sets, along with merchandise from the hugely popular The LEGO Movie, have seen demand for the toys exceed supply.
“We will not be able to deliver all of the orders coming from customers in the remainder of the year,” said Roar Trangbaek, a LEGO spokesman.The company would not specify which lines of toys or which countries would be affected.
Trangbaek said the brand will be delivering the orders it had already received for Christmas, but may have trouble filling new orders later this year.
LEGO attributes much of its recent success to the box-office clout and merchandising associated with the feature film, The LEGO Movie
“It is really extraordinary and it has exceeded both ours and our customers’ forecasts,” Trangbaek told The Guardian when asked why the company had not prepared for the surge in supply requests.
LEGO sales grew by 18% in the first half of 2015 to 14bn Danish crowns (€1.86bn), putting it comfortably ahead of Mattel and Monopoly-board maker Hasbro, whose revenues came in at $1.9bn (£1.67bn) and $1.5bn (€1.32bn) respectively.
“We are running our factories at maximum capacity and will do everything we can to meet demand,” Trangbaek added.
LEGO was founded by Ole Kirk Kristiansen in 1932 in Billund, Denmark, and remains a private company still owned by the family. Last year, the company poured more than kr 3bn (€400m) into upgrading their plants and equipment, to streamline the manufacturing process. This came after reports of toy shortages in Denmark and Canada last year during the Christmas rush.
Earlier this month on Newstalk's Down to Business, host Bobby Kerr spoke to Christian Majgaard, the creative genius and former-senior director at LEGO, who was one of the main people behind turning the toy manufacture into the global brand that we know today. You can listen back to that interview below:
