Hi! For those who don’t know me(which is probably almost all of you, possibly even myself) I’ve been dabbling in collectibles for about two years. I have had a fair amount of success in gig posters and licensed movie posters(think Mondo, etc.) and limited edition vinyl records. In the last six months I’ve been really trying to get a foot in the door of the LEGO world. First, I love LEGO bricks. Second, I’m familiar with my post office, eBay and PayPal, and have a ready account to sell with. Third, I want to collect some LEGO sets for my future children (the wife is pregnant with a baby girl) to build, but also make some money with.
One of the first things any new LEGO investor probably hears is “buy what you love.” If that were the case, I would only have a lot of STAR WARS, Lord of the Rings/Hobbit and cool Modulars. Yes, if things went really badly, I could happily build these sets(although how many Bag Ends does any one man need in his Lord of the Rings/Hobbit MOC?) but it would be a little limiting. Since I found out I am going to be the proud new father of a baby girl, I started looking at Friends. And then I went further, back to Belville, which was one of the earlier girl LEGO themes that preceded Friends. I was drawn to the 7582 Royal Summer Palace and the 7586 Sunshine Home, a couple of the bigger sets from that line that have long since been retired. Not many are for sale, in terms of numbers, but the CAGR(Compound Annual Growth Rate) and ROI(Return on Investment) from retail are solid, at 17%/158% and 11%/71% respectively . I would gladly go back in time several years and scoop up a few of these sets for investment purposes. So...does that mean, despite my personal lack of enthusiasm for Friends LEGO theme, that it will be a solid investment? Let's take a look...
The current numbers suggest, yes, yes, a million times yes! The first wave of sets from January of 2012 are getting pretty hard to find and are already showing some nice gains. Here is a list of the Top 15 Friends sets based on CAGR. I call them the Friend's Fabulous Fifteen:
|Image||Set #||Set Name||Pieces||MSRP(US$)||Current Price||CAGR(%)|
|3186||Emma's Horse Trailer||218||24.99||44.12||76.55|
|3942||Heartlake Dog Show||183||19.99||33.21||66.13|
|3930||Stephanie's Outdoor Bakery||45||5.99||9.64||60.43|
|3931||Emma's Splash Pool||43||5.99||9.09||51.75|
|3065||Olivia's Tree House||191||19.99||29.45||47.32|
|3936||Emma's Fashion Studio||79||9.99||14.7||47.25|
|3183||Stephanies's Cool Convertible||130||14.99||44.12||38.29|
There are a few others that have shown really nice gains from this first wave that could become quite sought after in the secondary market for those investors coming late to the game as well as for children who desire(and plead with their parents) to get sets that are unavailable at retail. The nice thing about these smallish sets is that even at double, triple or even quadruple the initial retail price, they still remain affordable to most parents with kids who want to rip open these sets and play with them. My child doesn’t play with Friends LEGO sets(yet) – she is just an embryo, people! – but I think that if a birthday or Christmas were on the horizon and my daughter had sets A, B and C that I would shell out $30 for Emma’s Fashion Studio (reg. Price $9.99) to complete her collection.
Because most of the sets are small to medium size, I don’t think there are going to be massive monetary gains, even if there are solid CAGR gains. That will keep a lot of investors away. Also, they don’t appeal to (most?) men, perhaps not the majority of AFOLs and not to the majority of young boys, but I think that leaves an opening for the savvy investor who is happy to make a little money here and there. If you can track down the early 2012 sets at retail or the mid-2012 sets at a discount(recent sales have seen some of these sets at quite attractive prices), I would say throw caution to the wind, ignore the advisers who only want you to invest in what you love and instead invest in a hot product with a matching cartoon and solid CAGRs!
Brickpicker Alias: Veegs
Investment to Date: About $5,500
Sales to Date: $0
Wife (Currently Pregnant) Anger Level: xx/10: 6.5
Most Recent Acquisition: 2 Vampyre Castles @$73.50 each
There has been much discussion on the BrickPicker forums after the recent LEGO Press Release in which illustrated another banner year for The LEGO group. Let's take a look at a portion of that press release....
LEGO Friends significantly exceeded expectations
The best-selling product lines in 2012 were LEGO City and LEGO STAR WARS™, followed by LEGO Ninjago (launched in 2011). The new product line, LEGO Friends, delivered a strategic milestone in 2012, selling much better than expected and becoming the fourth best-selling product line. Even though the LEGO Group more than doubled its production of LEGO Friends versus expectations, it was not possible to deliver all of the products demanded.
The red highlighted sentence illustrates an amazing point. LEGO doubled production of the Friends-themed sets, yet still couldn't meet demand. Wow! When is the last time you have heard of a LEGO theme being so popular that the LEGO factories couldn't keep pace with demand? I really don't know, but nevertheless, it is a fact that every savvy LEGO investor and reseller needs to pay attention to.
You would think every LEGO investor and reseller would be rushing out to buy some of those Fabulous Fifteen Friend's sets posted by Veegs. Well, not so fast. There is a large portion of experienced LEGO investors that don't want to touch these LEGO sets with a 10-foot pole. I wonder why? The Friends theme is near the top of the Theme CAGR List, at #2 behind the Monster Fighters. There is a large variety of sets, both large and small, cost effective and expensive and most are well thought out and creative LEGO sets, even though they are designed for little girls. Is that the issue? Quite Possibly. Little girl LEGO sets don't appear to get enough love from the majority male LEGO population. And in the defense of the male population, I can see why. Most LEGO investors are LEGO fans and collectors first and will base their investments on sets they like and would build. Their philosophy is that if the LEGO investment market ever implodes, they can feel better about their investment choice and build the sets. Count me in on this philosophy. But does this philosophy have any legs to stand on, or is it some sort of ridiculous antiquated behavior based on zero common sense?
The more I deal with LEGO investing, the more I realize that emotion has to be removed from the equation if you truly want to pick the best sets for strong growth. For the longest time I have subscribed to the “I only buy sets that I would want to build” theory and it has worked well for me over the years. But I have started to expand my LEGO investment choices to include sets I will never build. Why? To make money of course. I have ignored LEGO themes in the past as investments because I had no real interest in the sets. Take Harry Potter sets for instance. I could have bought Harry Potter sets years ago, instead I bought hundreds of STAR WARS sets, yet never considered Harry Potter sets as a potential investment...and lost out on some nice gains. I never saw one Harry Potter movie and could really care less, but recently, I started buying the Harry Potter sets because I changed my philosophy and I knew they would appreciate well after EOL. Although the Harry Potter sets are creative and accurate LEGO sets, I realize that I will never build one but I still value them as investments. This is how I view Friends sets.
Friends themed sets are wonderful. They are colorful, creative, fun, cute and contain many small features that go unnoticed by many, but can be appreciated by every LEGO fan out there. Obviously a huge hit with girls and rightfully so, these sets are having a hard time gaining respect from male LEGO investors. I really like these sets, but as with the Harry Potter sets, I won't buy any Friends sets to build. And I'm OK with that. I'm not buying Friends sets to build, I am buying them at a discount to sell later at a profit. It's as simple as that. I like making money and Friends sets are one of the LEGO themes that can make you a lot of money if invested in properly. I can't really give you any specific Friends sets that will do well after EOL, because they all seem to do well...even before EOL. If I would suggest some Friends-themed sets to potential investors, the larger sets like the 3185 Summer Riding Camp and 3315 Olivia's House would be two I would key on. But many sets, including many polybags and smaller boxed sets, have exploded in growth.
So all in all, I would suggest even “un”Friendly fans and investors dabble a little in the pink and purple LEGO sets. I know, many of you naysayers are predicting these are just one hit wonders, that in a couple of years, these sets and/or the entire theme will be permanently retired or unpopular. Many male LEGO investors will say that girls just won't get into collecting LEGO sets like boys do and I will counter with Barbie Doll collecting as an example of how women are possibly better collectors than men. The Barbie Doll collectible's market is years ahead of the LEGO collectible's market in time, sales and money. Some Barbie Dolls sell for $20,000.00+++!!! Women make for serious doll collectors and I can see it translating over to the LEGO Friends theme. There will be little girls that want all the Friends sets, even after they are retired. Just like boys who couldn't afford that 10179 Millennium Falcon in 2007 but can buy it now as an adult with extra discretionary income, there will be women who wanted to buy Olivia's House or the Summer Riding Camp as a child and couldn't afford it, but can buy it in the future when money is readily available.
Also, don't discount the “spoiled child” scenario. Imagine a child who wants every LEGO set and their enabling parents (I speak for myself here...) who will give their kids whatever they want to keep them quiet or see a smile. Any way you slice it, there are some solid reasons to buy Friends LEGO sets as investments, even if investing in Friends sets goes against some tried and true LEGO investment principles. You might not want to build the Friends LEGO sets in the physical sense, but with their current returns on investment and bright future in my opinion, you might want to build up your Brickfolio with the pink and purple sets..