The Lego Group posted record first-half revenue as a deliberate combination of brand partnerships, product breadth and a near-consumer manufacturing footprint helped it outpace the wider toy market. Company executives and industry observers say the strategy married fast-moving marketing tie-ups with operational choices — more localised production, a heavy cadence of new sets, and sharper direct-to-consumer channels — creating a potent mix that sustained demand across age groups and geographies. The bigger question for the industry is whether the recipe is transferable beyond a deeply branded, premium-priced business built over decades.

Brand collaborations and relentless product flow

Lego’s top-line strength in the first half of the year was driven in part by a record rollout of new sets and a string of high-profile licensing deals that broadened the company’s emotional and demographic reach. By introducing hundreds of new items across wide-ranging themes — from family-friendly preschool lines to adult collector pieces — and pairing core properties with pop-culture licences, Lego generated multiple buying occasions and maintained shelf visibility in a competitive retail landscape.

Those brand tie-ups do more than add novelty; they accelerate discovery and cross-sell. Collaborations with major entertainment and sports franchises tapped into existing fan communities, while new partnerships aimed to attract older children and adult hobbyists. The licensing approach also created a steady stream of marketing content and retail moments throughout the half-year, helping Lego avoid the lumpy seasonality common in the toy trade. For a company whose product is modular by nature, these partnerships multiply combinable play patterns and raise perceived value, letting Lego command higher price points and retain margins even as volumes climb.

Closer manufacturing, faster supply and margin protection

A second pillar of Lego’s approach was its manufacturing and logistics strategy. The company has continued to expand production capacity closer to major markets — investing in facilities and regional distribution centres — to shorten lead times and reduce exposure to tariff and shipping volatility. That meant Lego could replenish top sellers quickly, keep promotional reliance low, and preserve pricing discipline in markets where costs have been under pressure.

Localised capacity also supports bespoke assortments for different regions, something Lego uses to align product launches with local cultural moments and retailer demand rhythms. The result is a smoother supply chain and fewer out-of-stocks, which in turn maintains shopping momentum and protects market share. For a brand that relies on frequent newness, the combination of rapid product launches and a manufacturing footprint near consumption centres helps convert marketing buzz into sales with minimal delay.

Direct channels, premium positioning and consumer loyalty

Lego’s direct-to-consumer channels — including branded online stores, owned retail locations and fan events — amplified the impact of its product and partnership strategy. These channels allowed Lego to capture higher-margin sales, test new concepts quickly, and gather richer customer data that informed product development and marketing. Events and experiential activations tied to major licences further deepened emotional engagement, turning one-off purchases into repeat buyers and collectors.

At the same time, Lego’s premium positioning insulated it against some of the pricing pressures seen elsewhere in the toy market. Rather than competing solely on price, the company emphasised craftsmanship, collectability and cross-generational appeal. That positioning made trading down less attractive for many consumers and allowed Lego to maintain price integrity even as competitors leaned on discounting.

Is Lego’s strategy replicable across the toy industry?

While the elements of Lego’s playbook are visible to others — licensing, frequent new products, near-market manufacturing, and stronger direct channels — replication is easier said than done. Several structural advantages make Lego’s model unusually scalable for the company but harder to copy for many rivals.

First, Lego benefits from decades of brand equity and an exceptional catalog of proprietary themes as well as the leverage to secure marquee licences. That heritage makes tie-ups more valuable and easier to monetise; smaller or younger companies may struggle to command the same attention from licensors, retailers or adult collectors.

Second, scale in design, tooling and bricks matters. Lego produces in high volumes and has invested heavily in flexible manufacturing and tooling that allow rapid new-set introductions at acceptable cost. For competitors without comparable capital or a mass-market collector base, the cost of matching Lego’s pace of innovation and production can be prohibitive.

Third, the company’s premium price positioning and strong margins give it room to invest in customer experiences, sustainability initiatives, and international manufacturing expansion — choices that require both cash and a patient ownership structure. Firms with thinner margins face a trade-off between investing to grow and protecting immediate profitability.

Where imitation is feasible, and where it is not

Some parts of the strategy are more widely adoptable. Building deeper and more creative licensing partnerships — especially with local or regional cultural properties — can be done by many industry players and can yield faster, lower-cost routes to differentiated product lines. Similarly, improving direct channels and omnichannel customer experiences is a general playbook step that many toy companies can pursue to increase margins and gather buyer insights.

Near-market manufacturing is attractive in principle but comes with capital and scale requirements. Smaller players can pursue hybrid models — regional contract manufacturing, strategic inventory placement, or third-party regional distribution — to gain some of the benefits without committing to greenfield factories. Likewise, a disciplined cadence of new SKUs tailored to core audiences is achievable, but the depth and frequency of Lego’s launches are tied to its unique design pipeline and platform approach.

Lessons for the rest of the market

The broader toy industry can learn from Lego’s blend of brand-led demand and supply-side resilience. Key takeaways include prioritising a steady innovation cadence, pairing product launches with high-impact marketing or cultural collaborations, and investing in supply chain flexibility that reduces reliance on a single geography or long lead times.

Industry players should also weigh the returns on premiumisation: elevating product storytelling and quality can protect margins, but this strategy requires authentic differentiation and brand work that many competitors will need time to build. Finally, firms must be pragmatic about which elements to adopt in-house and which to outsource — tooling and large-scale production may remain the preserve of very large manufacturers, while marketing partnerships, digital community-building and selective localisation are more accessible.

Lego’s record first-half performance was not an accident of timing but the product of deliberate alignment between licensing, product cadence, and supply choices. The company converted cultural relevance into sales and used its manufacturing footprint to ensure availability and margin protection. For the wider industry, the formula contains both inspiration and caution: many of the mechanisms are portable, but the scale, brand muscle and capital intensity that make them powerful for Lego are not universal.

Executives across the sector are likely to pick the low-hanging fruit — smarter licensing, better direct channels, and regional distribution — while watching whether larger investments in near-market production make sense for their business models. For companies with the right brand equity and balance sheet, following Lego’s path could pay off. For many others, a selective, scaled-down application of Lego’s tactics will be the most realistic way to chase growth without overextending resources.

(Adapted from TheGuardian.com)