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Reliance Retail to bring in 250-year-old Hamleys

Posted by retailigence on August 30, 2008

Reliance Retail has clinched a deal with the world’s largest toy shop, Hamleys. India’s largest private conglomerate will be the partner in one of the biggest international expansions by the 250-year-old Hamleys till date. Sources said Hamleys and Reliance have struck a franchise deal to open large format stores. ET first reported on the discussions between the two players on March 21. Reliance Retail is believed to have pipped the Wadias and Kishore Biyani’s Future Group in snapping up the deal.

The Mukesh Ambani-led Reliance and the Icelandic investor Baugur Group-controlled Hamleys are expected to make a joint announcement shortly. Reliance had also explored an arrangement with the US chain Toys ‘R Us before deciding to strike a deal with Hamleys.

Hamleys’ foray into a potentially big market like India could be interesting. The seven-storey Hamleys store on London’s Regent Street is one of the top tourist draws. Despite its cult appeal globally, Hamleys has largely restricted itself to the UK market. It is believed that Reliance plans to open four standalone Hamleys stores in the first 24 months, which is a significant expansion move for the marque UK brand. Baugur is also working on expanding Hamleys to Middle-East, Russia, Turkey and China. Hamleys operates a standalone store in Jordan’s capital Amman. While the local stores may not be as big as the London flagship, it will surely be unlike anything seen before in India’s toy retailing space. The Indian stores will be around 25,000 sqft and will be opening doors in metros like Delhi, Mumbai and Bangalore initially. With Hamleys selling toys of several brands besides its own, Reliance had little elbow room to work on an equity structure. Indian regulations don’t allow foreign players to hold stakes in Indian companies that sell multiple brands. It, however, allows foreign retailers to hold up to 51% in a company in India if it sells goods under a single brand only.

The Hamleys deal marks Reliance’s third engagement with a major international brand in recent times. It has unveiled JVs with iconic apparel retailer Marks & Spencer and optical chain Vision Express.

Source: Economic Times


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