Reliance Brands has acquired
Hamleys as the Reliance Industries unit is looking to expand its global footprint and aiming to create a strong omnichannel platform, said Darshan Mehta, President and CEO.
"Internationally, the company has been under Chinese ownership who were looking to sell out because it was not part of their strategic focus and the value was good. Hamleys as a name is extremely well known, well accepted and it is more than a 250-year-old name. It made a lot of sense to start looking at global footprint suing all our product supply operations, all that knowledge across the world," said Mehta.
Reliance Brands, a subsidiary of Reliance Industries, on Thursday acquired the iconic British toy-maker Hamleys for around Rs 620 crore in an all-cash deal. It is currently owned by Chinese fashion conglomerate C Banner International, which had acquired it for 100 million pounds in 2015.
Reliance Brands would acquire 100 percent equity shares of Hamleys, RIL had said.
Hamleys, a 259-year-old toy-maker, has struggled to generate profits in recent times. It reported a profit after tax of 2.44 million pounds in 2018 after suffering a loss of 11.24 million pounds in 2017.
However, Mehta said, in India, it is a very profitable business. "Like any retailing, it is the margin management business, it is about being tight in operations so literally every moving part of the retailing business if you are sharp and clever you will, of course, be profitable," he added.
"There are other profitable toy retailers out there in the world both on the brand side and on the retailing side. Some of the big global toy brands are extremely profitable and even on the retailing side so we are quite optimistic," Mehta said.
Reliance Retail, Ambani's flagship retailer, already has a pan-India franchise agreement with Hamleys to merchandise its famous toys. Mehta said they will open close to 100 stores of Hamleys in the next few months.
The critical difference between Hamleys and any other toy brand has been, they actually invented the concept of experiential retailing, Mehta said.
now talks about brick and mortar retailing needs to be very experiential because if you just want to buy a toy you can go online and purchase a toy, buy Hamleys starts creating theatre of toys to demonstrate – when you go to Hamleys store, it is like watching a cartoon – and that is part of their secret sauce. So, we think that is extremely scalable,” Mehta added.
Hamleys started with a single-store shop, Noah's Ark, in 1760. It now has 167 stores across 18 countries. Besides the UK, it has stores in China, Germany, Russia, India, South Africa and West Asia.
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