Lego to open stores in Israel: “We’ll offer competitive prices”
Lego to open stores in Israel: “We’ll offer competitive prices”
Eran Tor, who is known for opening iDigital and Nintendo stores in Israel, will help open Israeli stores of the widely-popular brand. “Prices will be accessible,” he promises
LEGO is opening stores in Israel. Calcalist has learned that the first store will open this summer in Tel Aviv. The Danish giant plans on opening stores across the country, especially in malls. Store sizes will range from 150 to 250 square meters, and it is estimated that NIS 3 million will be invested in each store.
Ilanit, an Israeli company will import the toys to Israel, but the concession to open stores in Israel has been granted to entrepreneur, Eran Tor, who established the iDigital store chain and Nintendo gaming store in Tel Aviv. Previously, Tor served as the CEO of Reckitt Benckiser PLC, and held various positions with Unilever, in Israel, and around the world.
LEGO stores are designed and managed by LEGO-UK. “I work directly with the supplier abroad. “I am part of the stores’ branch, which is separate from the main LEGO branch,” Tor told Calcalist. “It took me 10 years to convince Nintendo to open a store in Israel. With LEGO, it took me eight years to convince them, and they saw opportunity and potential in the Israeli market.” According to Tor, "Israeli consumers love the LEGO brand, but it isn’t capitalizing on its full potential here in Israel. We don’t have the same experience here that exists elsewhere in the world, and together with the company we’ve decided to launch the stores here in Israel."
The LEGO group operates 678 stores worldwide, as well as LEGO.com, the company’s online digital platform. During the pandemic, the brand’s sales grew, and the company made a strategic decision to increase its global store presence and enter new markets in new countries.
“Less expensive than existing prices”
LEGO is one of the world’s most popular brands, and is sold in Israel at a dramatically high price compared to its prices elsewhere. This has made purchasing the product in Israel an impractical choice for families with young children, leading to more Israelis buying LEGO toys overseas - whether on international websites or abroad. There is also an issue of parallel importing. Today, anyone can purchase LEGO on several online platforms, and also at some toy store chains, which don’t purchase their toys from Israel’s official importer.
LEGO is an expensive brand. How will you compete with parallel importing?
Tor: “We’ll solve this problem by making the prices drastically more accessible, and the stores will offer an experience that LEGO consumers in Israel don’t currently enjoy. Prices will be as they should be. We are opening official LEGO stores, and the prices will be much lower than the prices at which LEGO is currently being sold in Israel.”
The government is advancing an import reform that will further boost personal imports from overseas. What is your opinion?
“Israel is an expensive country, and I’m not the person who can structurally change the Israeli market, customs, taxes, or the logistical costs of transporting items from around the world to Israel. I intend to change what I can, and will change the experience, making sure that Israeli consumers won’t need to buy LEGO in London. We want to make the brand far more accessible here than it has ever been, and offer a selection that doesn’t exist in Israel, at a drastic price reduction. Will Iit be less expensive than in London or Paris? Sometimes, but with higher exchange rates you never know. I believe that LEGO is an exceptional company. We intend to be as competitive as possible.”
Isn’t opening stores, specifically after the Covid-crisis, problematic?
“If I didn’t think this was a significant business opportunity to compete with Israeli offerings, I wouldn’t be pursuing this move. There is massive potential to grow and strengthen the brand in Israel through physical stores, and we plan on executing this quickly and are determined.”
Now, for adults too
Since the pandemic’s outbreak, LEGO has seen substantial growth in sales and demand. According to Tor: “This demand is not something that can be met over time. We are speaking of record demand numbers, and today, nearly 30% of LEGO consumers are adults, men and women. Some 30%-40% of this variety can only be found in official LEGO stores. During the pandemic, products on shelves and online sold out within 24-hour periods. This growth in sales was not caused by children's’ needs, but also adults who desired to play with LEGO. They had more time on their hands. And today, a respectable portion of LEGO’s customers are adults.”
In addition, Tor also stated that “only between 10% and 20% of LEGO’s products are offered in Israel. The full variety of products does not exist in Israel. Part of curating an important shopping experience is to give customers a full selection of products, and our stores will also carry limited-edition series that won’t be sold in the other stores and chains in Israel.”
