Reliance Retail in talks to buy loss-making toy store chain Hamleys

Reliance Retail in talks to buy loss-making toy store chain Hamleys
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Mumbai, Apr 17: C Banner International, the owner of toy store chain, Hamleys is exploring selling the centuries-old British toy store chain to Mukesh Ambani’s Reliance Retail Ltd. The loss-making chain is facing intense competition from online stores such as Amazon but Reliance expects to get a global footprint with the acquisition.
The company was on the block since September last year when its Chinese owner, C Banner International decided to exit the company. In 2015, C Banner International had paid $153 million for the company and ever since, Hamleys has been struggling with sales, and the valuation of the company has declined.
When contacted, a Reliance spokesperson said: “As a policy, we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges.”
For Reliance Retail Ltd, an acquisition of Hamleys will give it a global footprint in an industry which is facing stiff competition from both online and offline retailers. Though Reliance Retail has built a big sales network in India which includes fuel sales, it has no footprint overseas. Hamleys reported a loss of $15.6 million in 2017 and revenues of $86.5 million, thanks to market pressures including negative currency effects, as per Moneycontrol, which first reported Ambani’s interest in the company.
Founded in 1760 as a one store shop called Noah’s Ark, Hamleys opened its London flagship store in 1881 and now has 129 outlets across Europe, Asia, the Middle East and Africa. In India, it already has a tie up with Reliance Brands Ltd to open 20 more Hamleys stores.
In 2003, Hamleys was delisted from the London stock market by Baugur Group who had paid $68.8 million for the company. In 2012, it was sold for $78.4 million to Groupe Ludendo, a French company.
Soon after the takeover, Groupe Ludendo hailed its takeover as a platform to accelerate its international development. But its takeover failed to and led to its sale to Chinese firm C Banner International in 2015.
But Hamley’s fortune continued to decline with falling sales and increase losses. Hamleys Global Holdings, its ultimate parent company, said in October 2018 that its sales are improving with 2.7% rise in sales growth in the first eight months of 2018 in the United Kingdom. The company also forecast a that it will return to net profitability in the next 12 months.