Iconic toy retailer Hamleys, which was founded in London UK in 1760, will be entering the Canadian market by opening stores as part of global expansion. That’s according to news reports from India stating that Reliance Retail, which acquired Hamleys several months ago, plans to open Hamleys stores in the United States as well as in Canada.
The expansion of Hamleys into Canada could create serious competition for homegrown brands including Mastermind Toys, as well as Toys ‘R’ Us which itself is launching new concept stores in the Canadian market after the bankruptcy last year of its US counterpart. Hamleys could also impact toy sales in multi-brand retailers offering toys as a category.
Hamleys was founded in London in 1760 and is said to be the world’s oldest toy retailer. Founder William Hamley called the store ‘Noah’s Ark’ and the first store, located on London’s High Holborn, was relocated to its current site on Regent Street in 1881. The seven-floor flagship store boasts more than 50,000 lines of toys and is one of London’s most prominent tourist attractions, with more than five million annual visitors.
The company has changed hands several times. Icelandic investment company Baugur Group acquired Hamleys in 2003 and after Baugur collapsed, Icelandic bank Landsbankinn took over Hamleys. French toy retailer Groupe Legend bought Hamleys for GBP 60 million in 2012 and in 2015, Hong Kong-based footwear and fashion conglomerate C.banner acquired the Hamleys toy chain for GBP 100 million. Hamleys lost money under C.banner’s ownership.
Reliance Retail, which is headquartered in Mumbai, closed on the deal to buy Hamleys from C.banner International on July 18 of this year. Reliance Brands appears to be serious in its efforts to expand its roster of partner brands globally. Reliance acquired Hamleys for a reported GBP 67.96 million in an all-cash deal.
Hamleys currently has 167 stores in 18 countries. Reliance Retail has the master franchise for Hamleys in India and currently operates 88 stores in 29 cities across the country.
Reliance Retail, which was founded in 2006 by billionaire Mukesh Ambani, is the largest retailer in India in terms of revenue. The company’s retail offerings include foods, grocery stores, apparel, footwear, lifestyle, home improvement products, electronic goods, and farm implements and inputs. The company’s revenue is about US $10 billion annually with nearly 4,000 stores spanning 18 million square feet in 750 cities.
Parent company Reliance Industries Limited also focuses on petroleum, natural gas, petrochemicals, telecommunications, media, consumer goods, consumer durables, travel services, entertainment and leisure, health products and even educational products and services. Reliance Industries Limited, which was founded by Mukesh Ambani’s father Dhirubhai Ambani in 1973, has revenue exceeding $90 billion annually.
Reliance Retail has a portfolio of more than 40 international brands with more than 660 store locations. Brands range from major luxury labels to more affordable offerings. For the Indian market, Reliance Retail partnered to distribute luxury brands such as Burberry, Bally, Bottega Veneta, Canali, Zegna, Giorgio Armani, Furla, Hugo Boss, Jimmy Choo, Ferragamo and others. Reliance Retail also partners with brands such as Diesel, G-Star Raw, Michael Kors, Muji, Pottery Barn, Steve Madden, Scotch & Soda and Marks & Spencers for Indian distribution as well.
Billionaire Mukesh Ambani is the founder of Reliance Retail. He’s the richest person in Asia with an estimated net worth exceeding $50 billion, making him the 13th wealthiest person in the world, according to Forbes Magazine. He’s also the wealthiest person in the world outside of North America and Europe, and is the first non-American ever to have been appointed as a Director of Bank of America.
He resides in the Antilia Building in Mumbai, which is the most expensive house in the world and is valued at more than US $2 billion. Architecture firm Hirsch Bedner Associates told Forbes Magazine that the residence cost nearly US $3 billion to build when it was completed in 2010. The 27-storey house is 568 feet tall (with some very high floor-to-ceiling heights) housing 600 staff, a private movie theatre, swimming pool, fitness centre, three helipads and a garage for 160 cars. Antilia House is situated on a 1.12-acre plot on ‘billionaires row’ Altamount Road in the city’s prestigious Cumballa Hill area. Buckingham Palace in London, which is technically not a private residence, is the only home to be valued higher.
We are awaiting further details pertaining to Hamleys Canadian expansion. Given its ownership, Hamleys North American expansion could be aggressive and could consist of standalone stores as well as shop-in-stores in host retailers. Hamleys’ expansion could be disruptive to toy retailers operating in this country, as well as multi-brand retailers carrying toys as a category. Toys R Us Canada, which is innovating by opening smaller stores while embracing experiential retail, is attempting to gain market share after the bankruptcy of its US parent company. Education-focused Mastermind Toys may be more insulated from competition from Hamleys, given the unique products offered in Mastermind stores.
Retailers such as Walmart and even Loblaw-owned Superstore feature toy departments and depending on the extensiveness of Hamleys’ expansion, both could be impacted. As well, New York City-based FAO Schwarz partnered with Canadian retailer Hudson’s Bay to open shop-in-stores last year, though its product selection in Hudson’s Bay appears to be limited as of late. FAO Swartz partnered with Hudson Group in the spring of 2018 to open FAO Swartz-branded airport shops and the brand hasn’t made its way into Canada’s urban centres other than through its Hudson’s Bay partnership.
We’ll follow up on this story with further details on Hamleys’ Canadian expansion when we receive more details.