Hamleys has been venturing into new territories with China being its next destination where it will be launching its first store measuring 60,000sq ft in Nanjing.
The toy industry may lack buoyancy but India has emerged as the third largest market for Hamleys after UK and West Asia.
Hamleys is already the largest toy retailer in India with 26 stores across 14 cities since its entry six years ago. It now intends doubling its number of stores within the next two years.
Reliance Brands, the master franchise for Hamleys India, is already on the job of launching six new stores this fiscal in tier 2 cities like Bhopal, Coimbatore and Guwahati under different formats including its smaller express stores.
“India is already the largest market in terms of number of stores and is growing much faster at 33 per cent for Hamleys than countries in Western Europe where growth is in single digits today. While we have 88 stores across 23 countries, India is our third largest market after the UK and GCC countries,’’ said Gudjon Reynisson, Chief Executive, Hamleys.
While the majority of its revenues continue to come from the UKwhere it has about 12 stores, Hamleys has been venturing into new territories with China being its next destination where it would be launching its first store measuring 60,000sq ft in Nanjing.
“Last year Chinese fashion conglomerate C.banner acquired Hamleys and now within a few days we shall have our first store measuring 60,000 sq ft in Nanjing,’’ added Reynisson.
In India, Hamleys continues to import the bulk of its toys from China for its private label and sources the rest from distributors like Funskool(for Lego), and has also included popular Indian characters like Chota Bheem at its stores.
Darshan Mehta, CEO, Reliance Brands, said, “ India is possibly the fastest growing market for toy retail. Now we have six new stores under construction mostly in the tier 2 cities and should reach a total count at 32 stores this fiscal. Consumers are going to malls where we are present and we want our stores to be there in even smaller markets like Ludhiana. ’’
Targeting airports and malls, Hamleys would stay away from setting up stand alone stores in high street locations unlike its iconic 134 year old store in London on Regent Street.
But mall rentals have been steep in Mumbai where in places like High Street Phoenix, where Hamleys has a 20,000 sq ft flagship store, is paying rent of almost Rs. 35 lakhs a month.
With an estimated sales turnover of less than Rs. 200 crore, it may take a while for Hamleys to make money. According to data from ROC(Registar of Companies), Hamleys reported a loss of Rs. 5.45 crore in the last fiscal ending March 31st.
“Buying toys is still not a culture or habit in India and there is a dearth of shelf space for toys as a category which has seen a slow down,’’ observes John Baby, CEO, Funskool.
However there may be better days ahead for the toy industry as discretionary spends pick up. “There has been minimal growth in the past two years for the Rs. 3,000 crore toys industry. But now we expect growth to pick up at 12 per cent on the eve of the festival season,’’ said Vivek Jhangiani, President, All India Toy Manufacturer’s association.