The real ownership of Hamleys, which has its flagship store on London’s Regent Street, will demonstrate the growing international ambition of Reliance Retail, which has the main goal of expanding at 30 percent every year for the next 10 years.
British toy retailer Hamleys which has been around since the time the East India Company established its strong presence in the country, is on the verge of getting acquired by Indian Businessman Mukesh Ambani backed Reliance Group. If the negotiations with the Chinese owner succeed, the 259-year-old brand will end up in the hands of Reliance Retail, India’s largest retailer, multiple sources involved in the negotiations told Moneycontrol News.
Reliance Retail is owned by Reliance Industries Ltd, India’s largest company in terms of market capitalization. If the deal goes through, Reliance Retail plans to increase the scale of economies and reach of Hamleys in the interior parts of India.
“Due diligence for the deal is at an advanced stage,” said one of the sources cited above, adding, “Reliance Retail is aggressively pursuing the deal.”
Hamleys, which started life as ‘Noah’s Ark in London in 1760, tallies the imperial group of Saudi Arabia among its dedicated clients. As of late, however, it has been battling because of vulnerability over Brexit and mellowing UK customer certainty. It detailed lost 12 million pounds in 2017 and a 2.5 percent decrease in yearly incomes to 66.3 million pounds. In any case, it is as yet a prevailing player in the $11 billion overall toy industry even as opponents like Target, Walmart, Amazon and Kohl’s are raging at its footsteps.
A source said the acquisition, if successful, will help expand Reliance Retail’s portfolio. “Reliance (Retail) can scale up Hamley’s business with its capabilities in supply chain management and strong distribution network.”
Reliance Retail already has a pan-India franchise agreement with Hamleys to merchandise and market its famous toys across its retail outlets. Hamleys has around 129 stores globally, a large majority of which are under the franchise model and outside the United Kingdom, the company is present in Germany, China, Russia, India, the Middle East, Sout Africa and others across the globe.
“Hamleys at present has approximately 50 stores on a pan India level, and the next goal is to accelerate it up to 200 over the next three years,” said another source familiar with the deal.
As per a report by statistical surveying firm IMARC, the Indian toy industry was worth $1.5 billion out of 2018 and has developed 15.9 percent exacerbated yearly, somewhere in the range of 2011 and 2018. IMARC expects the market size to cross $3.3 billion by 2024, driven by a colossal base of the youthful populace, and solid financial development. The report records Funskool, Lego, Mattel and Hasbro as the fundamental players in the Indian toy segment.
Chinese Fashion Giant C. Banner International had obtained Hamleys for £100 million in real for an all-cash deal in 2015. A year ago in October, C Banner needed to leave toy business so there started the way toward selling its stake and began paying special mind to potential purchasers for the obtained toy organization, as indicated by a Sky News report. Corporate account firm Vermillion Partners was enlisted to haggle with bidders, the report said.
If the desired acquisition with Reliance Retail is done then it would be marked the fourth time in the history of Hamleys because it changed hands since it inception and also previously it was acquired by an Icelandic investor in 2003.
Reliance Retail is gearing up big time in retail space and it had entered into stronger partnerships with various iconic international brands such as Diesel, Marks & Spencers, Steve Madden and Kenneth Cole. It reported a turnover of Rs 69,198 crore for the financial year 2017-18.
Hamleys stores would have 5,000 products in the price range of Rs 10-25,000, he said. Hamleys was established by Cornishman William Hamley in London in 1760. As per the market reports it is estimated that the toy market in India is around 2000 crore.