Canada is facing a Lego shortage. Global demand is outrunning supply.
Monday September 29, 2014
As the Denmark-based toy manufacturer Lego expands into the Chinese market, buoyed by unprecedented profits in the wake of The Lego Movie, Canadian toy stores are disappointed to find there may not be enough Lego to go around this winter.
Guy Bagley, co-owner of The Swag Sisters Toy Store in Toronto, was shocked to discover he’d been cut off without notice when he checked online to confirm a birthday order. “At that point, I found out the five orders we had in the system were all gone,” Bagley says. “They were in the ‘completed’ file, and beside them they said ‘cancelled’. I just about had a heart attack.”
Bagley immediately contacted his sales rep. “She explained that, although Lego was expecting a halo effect from The Lego Movie, they hadn’t expected it to be as big as it was, so they oversold production, and because of it, they were cancelling all the Canadian independent toy store orders.”
Lori Parker, co-owner of Treasure Island Toys Limited, another independent Toronto shop, had the same experience when she discovered her October order, “about 15% to 20% of our order for the year,” had been cancelled.
“We were told that the Canadian market was not receiving any more. We were told that it was because there has been an increased demand since the movie, and they weren’t able to meet that demand,” says Parker. “I’ve never experienced this situation where our entire order was cancelled; we’ve had parts of the order cancelled, but not the entire thing.”
Nicholas Mason, co-owner of Castle Toys in Calgary, says his city is “Lego-crazy”; it was chosen last May to host the first-ever edition of the company’s “Lego KidsFest” series outside the U.S. Nonetheless, he’s had the same experience as the Toronto retailers. “We were to receive our largest shipment a few weeks back. It was supposed to be delivered on the following day, and I actually went into our business-to-business web portal and found out our order was cancelled,” he says.
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“I immediately contacted our rep, and they didn’t have much to say. It’s been an extremely trying time for us. It’s caused us a lot a lot of problems. I had been waiting for this delivery for months. It’s probably one of our largest orders; this is what I call my Christmas order.”
Some independent retailers are still confident they will receive most of their orders intact. “Near the end of the year, there are often items that just don’t show up. I think what we’re going to see this year is that perhaps that window where they start running out of things and aren’t able to ship might shift a little bit earlier in the year,” says Jim Cordingley, President of Kite and Kaboodle in Winnipeg.
We have a lot of faith in the product; we’re happy to be selling it,” he says. “The last couple of orders had less things shipped on them than normal, but it doesn’t mean that they won’t show up later in the year. Like any product, it’s about managing the inventory.”
Meanwhile, for Mastermind Toys, a 31-store Canadian chain that’s expanding to 36 outlets by early November, it’s business as usual, says head of purchasing Ryan Carr.
“We have a very close and strategic relationship with Lego. As far as our plans for the year go, we’re feeling quite confident,” he says. “They’ve had some instances where different areas of their line have been short, but that’s sort of the nature of the beast. In the case of this particular year, the success of Lego has been really broadly based; it’s the whole line that’s doing so well. We’re confident that the supply will meet our demand.”
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Lego Canada and U.S. spokespeople have offered no comment on this story. Mason reports that since he found out about his cancelled order, “Lego Canada did supply us with a product list of what is available.” From the massive Lego catalogue, he says, “there are 37 items that Canadian Lego retailers or small independent stores will be able to order right now.”
Bagley, who estimates that the cancellations represent 40% to 50% of his annual Lego orders, says “we brought Lego in because we found enough people walking in the front door and asking us if we had Lego, and if we said no, they turned around and walked right out of the shop. We brought it in because it has a huge pull; it’s a great product.
“I think LEGO is now starting to reach out and let people know what’s going on, but originally they hadn’t,” he says. “I guess that’s the most frustrating thing about it.”