(Bloomberg) -- Hamleys of London Ltd. plans to refurbish its landmark London shop selling everything from yoyos to model airplanes despite a crisis in toy retailing that’s been deepened by Covid-19.
The expansion plan, which could include opening new stores, is a boost for a company that’s had four owners in 15 years and operates in a highly competitive business where sales are increasingly moving online. Other British retailers are cutting more than 35,000 jobs, closing stores and investing in digital strategies in a bid to recover from a pandemic that has changed how people work and shop.
Far from being foolhardy, the expansion is a sign of confidence in the brand and strategy, said Sumeet Yadav, chief executive officer for global retail business at Reliance Brands. The subsidiary of Indian billionaire Mukesh Ambani’s Reliance Industries Ltd. bought the storied brand a year ago for about 70 million pounds ($92 million), just months before the outbreak of Covid-19.
“It has been quite an eventful journey,” Yadav said in an interview, but “we are not holding back making long-term investments.”
Hamleys was opened in 1760 by William Hamley. In recent years it has struggled and previous owners, including Ludendo Groupe of France and C.Banner International Holdings Ltd. of China, failed to drive sales or a global expansion.
Reliance Brands believes it has the best shot of succeeding as it has run the Hamleys franchise in India for the past decade and has a close affinity with the brand. However, it has already lost one CEO at the toy retailer -- David Smith, formerly of department-store chain Debenhams Plc -- who is leaving after only seven months.
Reliance declined to comment on his departure and Smith could not be reached.
Hamleys, which has 179 stores in 16 countries, has also not turned a profit for some time. Its most recent accounts, for 2019, show a loss of nearly 10 million pounds ($13 million) on revenue of about 48 million pounds.
The retailer is in the final stages of designs for a refurbishment of the seven-floor store on London’s Regent Street. It also wants to open pop-up concessions and stores in Manchester, Liverpool and Newcastle, England, and expand into Western Europe, Australia, the U.S. and Canada.
Covid has created some in-store challenges, including restrictions on interactive toy demonstrations. The website will be relaunched by the end of 2020, building on digital sales that Yadav said are “through the roof.”
Yadav declined to say how much Reliance is investing, describing the sum as significant and worthy of a brand that is 260 years old. “The Hamleys experience cannot be diluted,” he said.
©2020 Bloomberg L.P.
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