Business - Reliance ties up with Toy retailer Hamleys

MUMBAI: Reliance Retail has tied up with the British toy retailer Hamleys Group to set up a nationwide network of exclusive toy stores. Under the exclusive franchise agreement, Reliance Retail will invest for setting up the network while Hamleys will bring in its expertise on designing stores, training staff and developing its private labels. Reliance Retail will pay royalty to the British company for 20 years.

Reliance Lifestyle Holdings president and CEO Bijou Kurien said they would set up 20 stores in seven years. This includes two flagship stores of nearly 25,000 sq ft, one each in Mumbai and New Delhi. The first store will be in place by April 2009. The regional stores will come up in Bangalore, Hyderabad, Pune, Chennai and Kolkata. ET had reported on March 21 that Reliance Retail would partner Hamleys to set up exclusive toy stores in the country.

Reliance Retail targets sales of Rs 900 crore from this business. The Rs 2,500-crore Indian toy industry is dominated by unorganised players and is growing at 25% per annum. Almost 20% of the market share belongs to the organised players like Mattel and Funskool, and other modern retailers. Reliance is targeting a growth of 20% from its toy stores by launching a range of Hamleys products costing Rs 400 and onwards.

Mr Kurien said the partnership with Hamleys is expected to help Reliance Retail develop the toy market in India. “This is a nascent market. But it has huge growth potential,” he added. Reliance Retail will replicate the experimental elements of seven-storied flagship store of Hamleys in Regent Street, London, in some of its stores.

Hamleys Group trading director Paul A Currie said the company is looking at India as a possible destination of its product sourcing. “At present we are reviewing our supply chain and our initial investigation shows that there is an opportunity in India. We will not compromise in terms of quality as our products should conform to European Union quality,” he said. Hamleys sources its toys mostly from far-eastern countries.