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Mumbai- 261-years old UK toy shop is now seeking a new life in the hands of the billionaire Mukesh Ambani. He is looking to India which is about a fifth of the world’s babies are born in order to fuel its revivals.
Almost everyone knows about Hamleys. It is a British retail icon that didn’t make a profit for many years and made plans to quadruple its outlets in India which is more than 500 in the three years in spite of the pandemic, as per Darshan Mehta, chief executive officer of Ambani’s Reliance Brands.
Keeping aside the main growth market, the company added stores from Europe to South Africa and China, which he mentioned in an interview.
In 2019, Mr. Ambani bought Hamleys from US$89 million (S$119 million) in cash for strengthening its retail footprint as part of the ongoing transformation of his oil-and-chemicals conglomerate Reliance Industries into a consumer and technology behemoth. Currently, Hamley’s books for 2019 show a loss amount of £9 million (S$16.6million) on revenue which is around £48 million.
Moreover, the deep pockets of Asia’s richest man are on the verge to help Hamleys to get a new life. Further, its shares of global sales were estimated at 0.6 percent in the last year by Euromonitor International and it soon finds avert the pitfall faced by the rivals like Toys “R”Us.
Mehta said that the country accounts for only 1 percent of the US$90 billion global toy industry which means the potential for growth is quite high.
However, the Hamleys stores are highly famed for the carnival-like experience which is permitting children to race toy cars and enjoy the model train sets as well as play various kinds of games. Countries like India along with the densely packed cities and restricted entertainment options like an environment which might be a hook to find consumers to visit them again. However, product prices are quite appealing to buyers of modest.
In Asia, Hamleys is identified as “high class and it’s on par with Harrods in some ways,” said Marc Alonso, a senior research analyst at Euromonitor.
Also 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.”
During the pandemic hitting parts of India’s economy, Mr. Mehta finds the toy industry as “recession proof” because most of the families select the happiness of kids over everything.
Also, the other chains have wriggled earlier the virus. Toys “R” Us was one of the biggest victims of the US retail apocalypse when it trailed for bankruptcy in 2017, rumpled by debt and clear-felled by competition from online sellers such as Amazon.com. Though the American chain is on a reclamation path now it is under a new owner, a stretched pandemic points to an indeterminate future for retailers.
Fixing online sales is key to dodging the fate of other high-end toy chains, as per Reliance. Being a part of Ambani’s e-commerce and technology reel, his group is structuring Jiomart, a shopping portal, to yield on giants such as Amazon.com and Walmart’s Flipkart in the local market. Reliance Industries has fastened in Facebook and Google as investors to boost those ambitions.
He said, as Covid-19 accelerating the group’s digital strategy, Mr. Mehta believes 30 percent of Hamleys’ sales coming from orders online in five years, versus 20 percent now. Through selling over the phone or WhatsApp it would account for 20 percent in the same period.
Euromonitor’s Mr. Alonso exclaimed that target may be too determined because some consumers may go to other portals that is offering cheaper prices. He mentioned, “You can get the same product much cheaper by going straight to Lego, for example, on their e-commerce site.”
The beginning of the pandemic just months after Reliance took rheostat compounded Hamleys’ financial suffering in the UK, where it runs 21 outlets.
Mr. Mehta considers the UK operations will “come out very strongly” with non-essential stores reviving this week ensuing the easing of curbs. Other coronavirus waves could be temporarily messed up the business globally – like deferred plans for the US, a market it wants to crack.
Covid has restricted Hamleys’ India target to just about 50 new stores this year before the reviling picks up speed.
