Using Reliance Retail’s store strength will help ramp up sales of Hamleys at a time when organised toy majors are using both online and offline channels to improve sales.
operates 10,644 stores across 6,700 plus towns and cities in India and has store expansion plans for tier-III and -IV markets. The retail business is one of Reliance Industries’ fastest-growing ventures in terms of revenue and profit.
The acquisition of Hamleys by Reliance Brands happened when the toy chain's global business operations were under pressure. Reliance Brands is the fourth owner of the loss-making chain in 15 years, where past buyers have been unable to improve the financial health of the company.
But Jain is confident Hamleys will grow. “It just requires an anchor parent,” he said.
“When we took up the India business, it was nowhere to be seen. We have been able to take Hamleys to a new level. India is now the largest contributor to its (Hamleys) overall business. We understand the softer aspects of what to drive and how to push it.”
India, Jain said, would continue to be an important market for Hamleys. “India was always the focus, the sheer consumption and opulation...Europe has its own geo-political issues like Brexit,” he said.
The Indian toy market, according to experts, is pegged at Rs 10,000 crore, and is expected to double in five to 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 Brands hopes to take the 88-store network of Hamleys to around 200 in the next two to three years in India. Jain, however, did not elaborate on store rationalisation plans for Hamleys in markets such as Europe, where the latter hasn’t been doing too well.