The owner of the world’s oldest toy store Hamleys has revealed plans to quadruple its store network in India, where 27 per cent of the nation’s population is aged under 14.
Mukesh Ambani bought the loss-making 261-year-old toy retailer in 2019 as part of a broadening of his business base into retail. Now he plans to expand the chain to 500 stores within five years.
The company is also banking on the sustained adoption of digital commerce by Indians, who have moved online during the Covid-19 pandemic. Darshan Mehta, CEO of Reliance Brands, under which Hamleys now sits, predicts 30 per cent of the chain’s sales will be online in five years – up from 20 per cent now – and another 20 per cent from direct selling over the phone or via WhatsApp.
With such a young population, India represents a huge opportunity for toy retailing, Mehta said in an interview with Bloomberg. India accounts for 17.7 per cent of the world’s population and will soon overtake China as the most populous state. Yet the country has just 1 per cent of the US$90 billion global toy market.
“There is a lot of headroom and India is no way near saturation,” said Mehta. “We are now mulling how we can roll out stores in newer geographies and new formats.”
The company is also looking to expand into Europe, South Africa and China, although past forays by previous owners, including to Vietnam in 2015, have failed.
Reliance paid just $89 million for the Hamleys business which has 21 stores in the UK and has had mixed success offshore. Data from 2019 shows sales of just $66 million and a loss of $12 million.
The previous owner of the company was Hong Kong-listed Chinese private enterprise C.Banner International Holdings, a ‘strategic partner’ of another Chinese entity Sanpower, which bought troubled British department store House of Fraser in 2014. C.Banner bought Hamleys from French company Ludendo, which in turn rescued it from a collapsed Icelandic bank three years earlier for $83 million.
Founded in 1760 as Noah’s Ark, Hamleys opened its Regent St flagship store in London’s West End in 1881.