Reliance Industries buys British toy retailer Hamleys for about Rs 620 cr

Catapults Reliance Brands to a dominant position in global toy retail industry

Mukesh Ambani-led Reliance Industries (RIL) will acquire British toy retailer Hamleys for a cash consideration of £67.96 million (about Rs 620 crore), the company said in a statement on Thursday.

“Reliance Brands, a subsidiary of RIL, and C. banner International Holdings, a Hong-Kong listed company, today signed a definitive agreement for Reliance Brands to acquire 100 per cent shares of Hamleys Global Holdings, the owner of the Hamleys brand, from C. banner International,” the company said in its statement to the BSE. At present, RIL has the master franchise in India for Hamleys and operates 88 stores across 29 cities. “The worldwide acquisition of the iconic Hamleys brand places Reliance into the frontline of global retail,” said Darshan Mehta, president and chief executive officer, Reliance Brands. Globally, Hamleys has 167 stores across 18 countries.

RIL’s retail business, which had no international presence, will mark the company’s entry into global retailing after Hamleys’ acquisition. The Indian toy market alone, according to industry experts, is estimated Rs 10,000 crore, expected to double in five-seven years. Growth will be led by higher disposable incomes, presence of a large number of children (around 444 million Indians are below the age of 18 years) and the trend of nuclear families. Key players include Funskool, Lego, Mattel and Hasbro. Reliance, say experts, will have an advantage with Hamleys’ 88-store network in the country. This number is expected to be taken to around 200 stores in the next two to three years.

Hamleys’ global business operations have been under pressure and loss-making. In 2015, C. banner International had paid $153 million for Hamleys, and since then the toy retailer has witnessed declining sales and valuations amid intense competition from online stores. Hamleys was put on the block in October last year. Once the deal is complete, RIL will be the fourth owner of the iconic chain in the past 15 years.

The past 12 months have seen a significant number of sale and purchase deals for RIL. In the current financial year, this is third deal activity that the company has reported. In April, the company sold a significant stake in six companies, which own its very large ethane carriers, for an undisclosed amount and invested around Rs 700 crore in artificial intelligence start-up Haptik.