#RetailEXPO19: Lego ‘surprised’ at profitability of stores

Speaking at RetailEXPO19 Simone Sweeney, VP of global retail development at The Lego Group, said the company’s store estate is “surprisingly profitable”.

Lego has a number of flagship stores in different markets, including its Leicester Square store, and a further 300 brand and partner stores in over 30 countries, and while the latter are more profitable Lego is still turning a profit on its flagships.

Sweeney explained that the brand has been “very positively surprised” at the speed at which the flagship stores have paid for themselves.

She said: “We are beginning to see that the experience and the brand investment is not coming at the cost of the commercial, quite the opposite, it is fuelling it.

“That is one of the differences we are seeing now in this new world of bricks and mortar versus an e-commerce-based retail experience. It is almost counter intuitive to what we are hearing.”

Lego has poured investment into its experience-led flagship stores to drive footfall with initiatives including midnight openings for product launches and a ‘mosaic maker’ innovation.

The mosaic maker takes a picture of a customer and then produces a box with 3,000 component parts to allow the customer to make themselves in Lego. It has proved so popular the brand has had to introduce an online booking system.

Jamie Dunning, general manager at M&M’s retail group, says the M&M’s flagship stores also make money.

He said: “The headlines that flagship stores are there as vanity exercises and lose money is less and less the fact and tolerated.

“This is one of the most important shifts in this sector because of declines in media effectiveness these assets not only need to do the job of building brands they need to be viable channels to market.”

Dunning revealed the M&M’s store in Leicester Square receives a staggering five to six million visits a year.