Lego sales dip but company still dominates

NEW YORK (FOX 5 NEWS) - For at least the last 68 years, children all around the world have built memories building creations with Lego blocks.

And for the last 13 years, sales of Legos rose annually, often by double-digit percentages, until Tuesday when the company announced its sales fell in the first half of this year and it planned to lay off 1,400 workers, or 8 percent of Lego's international workforce.

"I think it's remarkable the rate of sales increases they had and they had to hit the ceiling at some time," said Richard Gottlieb, the CEO of Global Toy Group and publisher of Global Toy News.

Gottlieb appeared in the Lego documentary "Beyond the Brick," praised Lego's management, and -- despite Tuesday's numbers -- predicted further industry domination in the future.

"LEGO's in great shape," he said.

Gottlieb blamed Lego's sales slump on neither an outdated product nor the consumer's changing desires nor the economy but instead on a decade of booming growth and perhaps the peak of the construction toy category, which Lego dominates, thanks to the simplicity and genius of its core building block.

"Kinesthetically, touch-wise, I think there's something really wonderful about putting a LEGO brick together," he said.

Yes, Lego sales for the first half of 2017 dropped by 5 percent but they fell from $2.5 billion to a still-robust $2.36 billion in just six months, still easily beating both Hasbro and Mattel.

"Both of those companies have multiple brands," Gottlieb said.

Lego sells consumers only one brand it has recently used to open theme parks and build into a growing series of Hollywood blockbusters outpacing those other toy giants perhaps by appealing to the simplest desires of their young customers.

"They love to build. I think they like to tear down," Gottlieb said. "I think these are two just really basic impulses."

And few video games satisfy that need. Although Gottlieb expected Lego to continue to diversify into various on-screen ventures going forward in the "smaller and simpler organization" the company has promised.