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Lego plots global expansion with malls hungry for new stores

Key Points
  • Lego says it's on track to open more than 70 stores globally, not including in China, in 2019.
  • The company says it will have more than 140 stores across 35 cities in China by the end of this year.
  • Lego's expansion comes as America's malls are hungry for tenants.
A Lego brick figurine of Emmet Brickowoski, a character from 'The Lego Movie', stands in the reception area at the headquarters of Lego A/S in Billund, Denmark.
Freya Ingrid Morales | Bloomberg | Getty Images

Lego, the No. 1 toymaker in the world in terms of sales, is on track to open dozens of stores internationally by the end of this year.

The Danish toymaker said Tuesday when it reported earnings the expansion includes a flagship store it's planning to open in Amsterdam this December, along with about 80 new stores in China. The plan puts Lego on track to have more than 140 stores across 35 cities in China by the end of this year. It's also set to open in Mumbai, India, early next year.

The openings will bring Lego's store tally to nearly 600 locations globally.

"We are satisfied with our performance given the transformative shifts which continue to reshape the global toy industry," CEO Niels B. Christiansen said in a statement. "Against this backdrop, we continue to grow consumer sales and market share in our largest markets."

In the U.S., Lego has 91 stores, according to its website. The company didn't break out how many of the 70 new stores outside of China planned for 2019 will be in North America. It's been opening a handful in the U.S. each year, even before Toys R Us' bankruptcy, in 2017.

When Toys R Us was still in business, Lego would often have an entire aisle devoted to its products in stores. That same real estate on shelves is likely much harder to achieve at a Walmart or Target. With weaker chains going under, Lego realizes it now needs to invest more in its own store and e-commerce strategy, rather than rely so much on wholesale partners.

Earlier this year, for example, it opened at Simon Property Group's Haywood Mall in Greenville, South Carolina, marking its first foray into the state. It's also set to bring its Legoland Discovery Center, with amusement rides and Lego-filled play zones, to Triple Five Group's American Dream Meadowlands, still under construction in East Rutherford, New Jersey. Part of that mall is scheduled to open in late October.

Lego's expansion comes as America's malls are hungry for tenants, with store closures continuing to mount and on pace to break a record by the time the year is over. Landlords are vying to bring in Lego stores, too, because shoppers are drawn to new experiences. In Lego stores, kids can play while their parents shop. Parents also tend to favor Lego because they see it as a learning toy.

Christiansen said the company's goal is to "inspire future generations of children."

Target also recently announced a bigger push into the toy business. It's teaming up with Walt Disney to open permanent Disney stores within some of its shops ahead of this holiday season.

The owner of the Toys R Us brand name, Tru Kids, is also plotting a comeback for the bankrupted chain. The first two new Toys R Us stores are set to open this November.

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