“We are now mulling how we can roll out stores"
Mukesh Ambani is seeking to revive iconic toy retailer Hamleys by looking to India.
According to Darshan Mehta, chief executive officer of Ambani’s Reliance Brands, Hamleys plans to quadruple its stores in India to more than 500 in three years.
Ambani acquired Hamleys in 2019 to strengthen his retail footprint as part of the ongoing transformation of Reliance Industries Ltd into a consumer and technology giant.
Ambani’s wealth could revive Hamleys, whose global toy share sales was estimated at 0.6% in 2020 by Euromonitor International.
Hamleys is looking into what it sees as an inadequately serviced section of India’s almost 1.4 billion people, of which about 27% are children under 14.
The country accounts for just 1% of the $90 billion global toy industry.
Mr Mehta said: “There is a lot of headroom and India is no way near saturation.
“We are now mulling how we can roll out stores in newer geographies and new formats.”
Hamleys’ stores are known for the carnival-like experience. In India, such an environment could attract more customers.
Marc Alonso, a London-based senior research analyst at Euromonitor, said in Asia, Hamleys is seen as “high class and it’s on par with Harrods in some ways”.
He added: “So it’s attracting that customer base, which is why in some places like India and China, it has been seeing some good sales growth in the past few years.”
While the Covid-19 pandemic has affected India’s economy, Mr Mehta sees the toy industry as “recession-proof” because many families choose their children’s happiness over anything else.
With Covid-19 accelerating the group’s digital strategy, Mr Mehta expects 30% of Hamleys’ sales to come from online orders.
In 2019, Mukesh Ambani purchased Hamleys for around $89 million.
That same year, Hamleys showed a loss of almost $12.4 million.
The onset of the pandemic just months after Reliance took control compounded Hamleys’ financial distress in the UK where it runs 21 outlets.
Like most shops in London during the pandemic, its grand seven-story Regent Street flagship store that opened in 1881 remained closed for much of the past year.
With non-essential shops reopening in the UK, Mr Mehta believes that UK operations will “come out very strongly”.
Covid-19 has limited Hamleys’ India target to 50 new stores in 2021.
Hamleys is looking at stores in the United States, depending on travel restrictions. It will also look at tourist hotspots in European countries.