ENFIELD, Conn. (February 14, 2005) – LEGO Systems, Inc., the North American division of the world's leading construction toy brand, today announced that its U.S. business turned to positive after two years of loss, countering the trend of a declining U.S. toy industry. According to aggregated data from The NPD Group, the company ended as the number-one boys' brand and number-two boys' property in the U.S.1
As non-toy gifts (especially electronic gadgets and gift cards) pressured classic toys more than ever and the toy industry declined nearly four percent1, LEGO Systems increased total U.S. consumer sales +19% overall, according to NPD Group.1 The brand's U.S. construction category sales grew +25%1, strengthening its leadership of the U.S. construction category by four market share points1.
Innovative core offering
The LEGO® brand restored category competitiveness in 2005, driven by a strong offering of core construction products. This is reflected in sales of LEGO Star Wars™ far exceeding expectations, as well as recording of the most successful year for non-licensed traditional play theme lines since 2001 with strong sales of LEGO CITY, DINO ATTACK™, Racers, KNIGHTS' KINGDOM™ and BIONICLE®.
Strong performance for retailers
In 2005, the company grew profit and productivity in top U.S. retailers' stores, leading to an increase in category shelf space and promotional ad feature. Gains were driven by strong product launches, careful inventory management and allocation and low levels of clearance inventory, all of which improved key metrics on top retailers' vendor scorecards.
Captured online growth
LEGO Systems capitalized on U.S. consumers shopping online, with very strong sales of LEGO products through retailers' websites, as well as on LEGOshop.com, which recorded double-digit growth and record year-end sales.
Last year, demand for LEGO products was strong, as predicted by a survey of moms that revealed a majority (66%) planned to purchase construction toys during the holiday season. Seventy-four percent of moms said the more children use their imagination the better they will do in school.2 Adults ranked the LEGO brand #6 among strongest kids' properties in the U.S.3
In one holiday wish list survey, boys ranked LEGO sets #24. Additionally, the LEGO Star Wars video game ranked #10 among all video game sales in 20055 and was the #1 wished-for video game among boys6. Boys 6-8 ranked the LEGO brand #2 "really fun" brand7.
"We are thrilled with the result we have achieved in the difficult U.S. toy market last year, especially considering we were building from two years of loss," said Søren Torp Laursen, president, LEGO Americas, Pacific, Direct. "Moving forward, we will focus on providing consumers with the highest quality, most innovative construction toys in the market to further strengthen our category and market leadership. We will continue to increase profitability for our retail partners, and further enhance the connection that LEGO consumers have to the brand to drive higher demand and loyalty."
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