Iconic British toy retailer Hamleys has been sold to Indian billionaire Mukesh Ambani for £68m, marking the third time it has changed ownership in the past seven years.
The tycoon’s Reliance Industries purchased the 260-year old toy chain, best known for its flagship store on London’s Regent Street, from Hong Kong-listed shoe retailer C Banner International.
Mr Ambani, who is ranked India’s richest man by Forbes, with a net worth of more than $50.7bn, already operates Hamleys’ franchise in India. He has swooped in for the main business, which has 167 stores across 18 countries, as it struggles with the consumer downturn in the UK.
The price tag for Hamleys is considerably lower than the £100m C Banner paid to acquire the retailer in a cash deal in 2015. C Banner had already written down the value of the investment by $49m this year, after lowering growth predictions in a weak UK retail market.
Reliance on Thursday disclosed that Hamleys made a post-tax profit of £2.4m in 2018, having swung to an £11.2m loss a year earlier, when it restructured parts of its business amid a high street spending downturn. The toy chain parted company with its chief executive this year, months after its finance director also left.
Hamleys’ sales fell to £63m in 2018 from £66m the year before.
Mr Ambani — Reliance’s chairman — is chasing growth in retail and digital services, to capitalise on the huge reach of Jio, his $30bn telecom venture. Launched in 2016, Jio had signed up 297m mobile customers by the end of February.
“The worldwide acquisition of the iconic Hamleys brand and business places Reliance into the frontline of global retail,” said Darshan Mehta, chief executive of Reliance Brands, a wholly owned subsidiary of Reliance Industries.
Hamleys, which was founded in 1760 by William Hamley as a single store called Noah’s Ark, has passed through several international owners since it was acquired by Iceland’s Baugur group in 2003. After Baugur collapsed during the financial crisis, its stake was taken over by Landsbanki, the Icelandic bank that was nationalised during the 2008 financial crisis.
French toy retailer Groupe Ludendo snapped up Hamleys for £60m in 2012, selling it to C Banner in 2015.
Speculation had been growing for several months about a sale of Hamleys. Beyond its wholly owned stores — 27 in the UK and three in China — the chain has 128 franchised outlets, of which 71 are run in India by Reliance in a partnership launched in 2008.
The purchase of Hamleys follows a string of buyouts of Indian start-ups for Reliance in recent months, ranging from food delivery service Grab a Grub to Reverie, which helps companies provide digital services in Indian languages. In January, Mr Ambani announced a major ecommerce venture, although the details and timing of the launch remain secret.
While Mr Ambani’s subsidiary, Reliance Retail, is already the biggest company by sales in India’s highly fragmented retail market, analysts say he is pushing to make consumer-facing businesses a far larger part of his $120bn-market-capitalisation group, which has long generated most of its revenue from oil refining and petrochemicals.
Shares in Reliance rose 1.2 per cent on Friday morning.
Mr Mehta said: “Over the last few years, we have built a very significant and profitable business in toy retailing under the Hamleys brand in India.
Additional reporting by Naomi Rovnick in London