Toy retailer Hamleys is set to have its fourth owner in 15 years since it was taken private by an Icelandic investor.
According to multiple Indian news media reports, Reliance Retail is in the final stages of negotiations with China’s C.Banner International, which has been trying to find a buyer since last October, after three years of ownership.
C.Banner bought the business in 2015 for US$130 million, but has struggled to produce a profit. The company reportedly lost $15.6 million in 2017 on sales down 2.5 per cent to $86.5 million.
Sources in India are speculating Reliance Retail will pay between $36 and $50 million, representing a substantial loss for C.Banner on exiting the brand.
Reliance Retail, a subsidiary of the giant Indian conglomerate Reliance Industries, is in acquisition mode as it tries to expand its business by 30 per cent annually for a decade, an ambition on a scale probably only realisable in India right now. As at the end of last year it operated 9907 stores across 6400 Indian cities with a combined retail area of more than 21 million sqft. Its retail licenses and partnerships include Marks & Spencer, Diesel, Steve Madden and Kenneth Cole.
“Due diligence for the [Hamley’s] deal is at an advanced stage,” a source told Money Control, itself a subsidiary of Reliance Industries. “Reliance Retail is aggressively pursuing the deal.”
Reliance Retail is already the Indian licensee of Hamley’s and operates 50 stores under the banner, representing the toy brand’s largest market by store numbers. There are plans to open 150 more.
Toy retailer Hamley’s was founded in 1760 as Noah’s Ark. It has about 129 stores globally, including a Regent Street, London flagship and stores in China, Germany, Russia, South Africa and the Middle East. A foray into Vietnam in 2015 ended in failure, however the company still sells toys online there.
Money Control was told that if the acquisition proceeds, it will help boost Reliance Retail’s portfolio. “Reliance can scale up Hamley’s business with its capabilities in supply chain management and strong distribution network.”