On Thursday, May 9, India’s richest man forged a multimillion dollar deal deal to buy the United Kingdom’s most iconic toy store, Hamleys. Chairman of Reliance Industries Mukesh Ambani has bought Hamleys from C.banner International Holdings, a company in Hong Kong, for $88.5 million or Rs 620 crore, paid entirely in cash.
Reliance Brands Ltd., a subsidiary of Reliance Industries, has acquired Hamleys for a little lesser than the $100 million that C.banner International bought it for from France’s Groupe Ludendo. The Chinese Group also recently backtracked on buying a 51% stake in House of Fraser, a luxury clothing brand, reports NDTV.
Bringing Hamleys into Ambani’s industries has put Reliance on the global map for the first time, as an overseas retailer. Ambani has now gained full control of the British toy store, after already owning the rights to its 88 franchise outlets in India.
History of Hamleys, the world’s oldest toy store
Hamleys is a 250-year-old toy store first founded by William Hamley in 1760, making it the world’s oldest toy store.
Hamley first opened his store in Holborn, named it Noah’s Ark, and stocked it with its trademark tin British soldiers, rag dolls, and wooden horses. After his wild success, Hamley found the store a new home on one of the busiest streets in London in 1881.
Now, Hamleys’ flagship store sits seven stories high on 188-196 Regent Street, London.
Hamleys was an already established landmark in London before Queen Victoria came to power in 1837. The store even survived the Great Depression of the 1920s and bombings of Regent Street in World War II.
Queen Mary and Queen Elizabeth II have both awarded Hamleys the Royal Warrant, an appointment to businesses that have supplied directly to British royalty, in 1938 and 1955 respectively. The Westminster Council has also awarded the toy store a green plaque, an honour given to famous heritage buildings.
Baugur Group, an Icelandic company, bought Hamleys in 2003 and sold it to Groupe Ludendo in 2013 for 78.4 million.
In 2017, Hamley begun reporting losses in the millions, but after closing down non-profitable stores across the UK, Ireland, Iceland, and other countries, the store turned a £2.4m in 2018.
Hamleys is currently operational in 21 different countries with 167 stores, most of which are in India.
Why Mukesh Ambani is buying Hamleys
In 2008, Tata Motors acquired Jaguar Land rover and became an international brand. Reliance Industries is also pursuing a similar business trajectory.
After Ambani cemented his domination of India’s digital networks with Reliance Jio, he has now turned his sights to retail. Hence, for Ambani, one of the most obvious advantages of this deal is becoming strong competition for other global retailers like Amazon and Walmart.
Amazon and Walmart have taken a massive hit after India instituted a new e-commerce policy, so this is an opportune time for Reliance to dominate the retail space. Reliance’s revenue from its 88 retail stores in 29 cities has also doubled last year to Rs 36,000 crore.
Another advantage of this sale for Ambani is that it has helped diversify Reliance’s revenue streams and reduced the dependency on its petrochemicals and energy industries that are already in oscillation because of the fluctuation of global oil prices.
Unstable fuel prices have even brought down giants like Jet Airways, so mixing revenue streams is a smart decision for Reliance.
Reliance Brands Chief Executive Darshan Mehta said, “The worldwide acquisition of the iconic Hamleys brand and business places Reliance into the frontline of global retail”.
Rhea Arora is a Staff Writer at Qrius.