Reliance takes over UK toy store Hamleys

June 13, 2019

The deal team that worked on Reliance Brands’ acquisition of iconic British toy maker Hamleys had to carry out due diligence in multiple jurisdictions the company was present to make the deal go through.

“This was a truly cross-border deal with an Indian purchaser, Chinese seller (listed in Hong Kong and incorporated in Bermuda) and an English target business with an international franchise model,” said Slaughter & May corporate partner Nilufer von Bismarck. The firm advised Reliance on the English law aspects of the acquisition covering areas such as real estate, intellectual property, competition, tax, employment and corporate law.

“This was a multi-jurisdictional deal with the target having operations and franchise relationships in several countries,” Khaitan & Co partner Rahul Dutt, who advised Reliance on Indian law aspects, told India Business Law Journal. “[The acquisition] involved due diligence of the intellectual property rights, real estate, contractual relationships of the target, as well as compliances in such countries. Structuring the acquisition and tax advice also played a vital role.”

Hamleys has a presence in 18 countries through 167 stores. Hong Kong-listed conglomerate C Banner International, which owns Hamleys, sold 100% of the shares to Reliance for US$84 million in an all-cash deal. The acquisition is expected to complete later this year.

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“While we might remember synchronizing the different time zones as the most difficult aspect of the process, we were also required, as lead transaction counsel, to ensure that the differing legal and cultural expectations of an English law transaction were properly managed,” said Bismarck.

Besides Bismarck, the Slaughter & May team included partners Sara Luder, Cathy Connolly, Phil Linnard, Jane Edwarde and Claire Jeffs.

Khaitan & Co’s role involved reviewing, preparing, negotiating and assisting the client in finalization of transaction documents. The firm was also represented on the deal by partner Akshay Bhargav, principal associate Vinita Choudhury, senior associate Shreya Dua and associate Krishna Shah.

“Besides discussions with the counterparty and their advisors to bring the deal to fruition, the management discussions were particularly stimulating not only on the deal aspects but in relation to managing global operations post-closing,” said Khaitan’s Bhargav.

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Both firms also took note of the prestige associated with Hamleys. “Interest was certainly piqued by the target being everyone’s favourite toy store,” said Bismarck. “It’s no secret that the British high street is going through a period of uncertainty at the moment, so it was rewarding to help Reliance to navigate this challenging environment.”

Hamleys was founded in 1760 and is the world’s oldest toy store. Reliance has the master franchise for Hamleys in India and operates 88 stores in 29 cities. Reliance Brands is the private equity firm of Reliance Retail and Reliance Industries

Source: Vantage Asia

Hamleys Has a New Owner, But Will the Iconic UK Toy Store Come to the U.S.?

May 19, 2019

Last fall, not long after FAO Schwarz returned to New York City with a new flagship store, the toy industry was buzzing with news that another icon might be plotting an outpost in the Big Apple —  Hamleys.

A UK staple with a lineage that dates back to 1760 when William Hamley opened “Noah’s Ark” — the retailer was said to be nearing a deal to open a two-story U.S. flagship at 2 Herald Square. At the time, sources said that the deal was expected to close early this year, with a target opening in 2020. Now, Hamleys has a new owner.

Related: Retail Franchise UK – Should You Buy UK Retail Franchises?

Earlier this month, Mukesh Ambani’s Reliance Brands Ltd. acquired Hamleys Global Holdings Ltd., which operates 167 stores across 18 countries. In India, Reliance has held the master franchise license for the retailer, operating 88 stores in 29 cities.

“Over the last few years, we have built a very significant and profitable business in toy retailing under the Hamleys brand in India,” says Darshan Mehta, president and CEO of Reliance Brands. “The 250-year-old English toy retailer pioneered the concept of experimental retailing, decades before the concept of creating unique experiences in brick and mortar retailing became the new norm. The worldwide acquisition of the iconic Hamleys brand and business places Reliance into the frontline of global retail. Personally, it is a long-cherished dream come true.”

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As Reliance takes charge with ambitions of becoming a global player in toy retailing, it remains to be seen if Hamleys’ Herald Square project will move forward. The company already has a North American presence with several stores in Mexico. Will the U.S. and Canada be next?

Posted by James Zahn

Source: ToyBook

Hamleys reaches endgame under ownership of China’s C.banner

October 21, 2018

The Chinese owner of Hamleys, the world’s most famous toy retailer,‎ has begun exploring a sale of the company just days after reporting multimillion-pound losses.

Sky News has learnt that C.banner International, which is listed on the Hong Kong Stock Exchange, has launched a strategic review of Hamleys, which it bought three years ago.

The review, which was prompted by several expressions of interest in a takeover from unnamed parties, is at a preliminary stage and might not lead to a formal sale process, according to a City source.

News of C.banner’s‎ decision to explore options for Hamleys throws the future ownership of the toy retailing giant into doubt just before its crucial Christmas trading period gets under way.

Vermilion Partners, a corporate finance firm with offices in Beijing, Shanghai and London, has been appointed to handle discussions with potential bidders.

The firm is an affiliate of Natixis (LSE: 0IHK.L – news) , the French bank.

The strategic review paves the way for Hamleys’ fourth change of ownership in 15 years following a succession of largely failed attempts by a range of international shareholders to expand the renowned brand globally.

It also marks C.banner’s potential retreat from the British retail sector, just months after it abandoned plans to buy a controlling stake in House of Fraser, the department store chain subsequently acquired by Sports Direct International (Other OTC: SDIPF – news) through a pre-pack administration.

Mike Ashley, Sports Direct’s chief executive, and private equity firms are likely to be among those who examine bids for Hamleys, retail analysts said this weekend.

Related: Hamleys boss eyes return to profit as toy shop books £12m loss

The value of Hamleys, which comprises 129 stores globally, was unclear this weekend.

One hundred of those shops are operated under franchise.

Founded ‎in 1760, Hamleys is one of the most famous retailing names in the world, having occupied its current site on London’s Regent Street since 1881.

It was launched as Noah’s Ark by William Hamley, who stocked his store with items such as tin soldiers, wooden horses and rag dolls.

In 2003, the company was taken off the London stock market by Baugur Group, the Icelandic‎ investor which snapped up a string of big high street names in the decade before the financial crisis.

Baugur paid £47.4m for Hamleys, which was then sold in 2012 for £60m to Groupe Ludendo, a French company, by the winding-up committee of the failed Icelandic bank Landsbanki.

Groupe Ludendo hailed its takeover as a “platform to accelerate our international development”, but the move failed to pay significant dividends, leading to C.banner’s purchase three years later.

The Chinese takeover was timed to coincide with a state visit to the UK by the country’s president, Xi Jinping, and was described by both countries as a ‎sign of deepening economic ties.

Since then, Hamleys has opened a 115,000 sq ft store in Beijing in a ceremony overseen by Britain’s ambassador to China.

The retailer now has a presence in countries including Germany, India, Russia and Ukraine.

Its international growth has not translated into a stellar financial performance, however.

This week, Hamleys Global Holdings, its ultimate parent company, reported a pre-tax loss of £12m for 2017, citing “market pressures including currency effects”.

The accounts added that trading was on an improving trajectory, with 2.7% UK like-for-like sales growth in the first eight months of 2018.

They also said that Hamleys was “on track to return to net profitability in the next 12 months”.

Three more UK travel stores were scheduled to open this year, and two in Japan in December under the Hamleys World format.

Ralph Cunningham, the company’s chief executive, said in the accounts that he was “encouraged by our current trading performance”.

He added: “While our international franchise business experiences good growth, last year was one of the most challenging years in UK retail history.

“Hamleys was not immune to the impact of Brexit uncertainty, macroeconomic pressures‎, a general erosion in UK consumer confidence and falling customer footfall due to the threat of terrorism.”

Mr Cunningham is a well-regarded figure who has brought stability to the business, according to insiders.

The toy retailer also said this week that Alex Jablonowski, its finance director, was leaving the company and was being replaced by Yong Shen, a former executive at House of Fraser.

A potential sale of Hamleys would come at the end of a torrid year for Britain’s retail industry, with dozens of collapses and corporate restructurings involving names such as Carpetright (Other OTC: CGHXF – news) , Maplin, Mothercare (Other OTC: MHCRF – news) , Poundworld and Toys R Us.

A C.banner spokeswoman in Hong Kong declined to comment, while Hamleys also said it would not comment.

Source: Yahoo News UK

Hamleys boss eyes return to profit as toy shop books £12m loss

October 12, 2018

The boss of Hamleys has insisted the iconic toyshop is on track to become profitable again after the tough UK market left it nursing a £12m loss.

Chief executive Ralph Cunningham said a drop in consumer confidence, coupled with Brexit uncertainty and the fallout from terror attacks in London had created “one of the most challenging years in UK retail history”.

Despite the pressure, he said efforts to cut costs and invest in its international franchise stores meant profitability had “improved significantly” during the current financial year.

Hamleys recorded a loss before tax of £11.9m for the year to December, down from a £2.6m profit in 2016. The fall was partly caused by one-off costs linked to a restructuring and store closures.

Mr Cunningham said the 258-year-old retailer had “more to do”, but he was encouraged by its performance in first eight months of 2018.

He said: “Hamleys was not immune to the impact of Brexit uncertainty, macro-economic pressures, a general erosion in UK consumer confidence and falling customer footfall due to the threat of terrorism.

Related: Hamleys reaches endgame under ownership of China’s C.banner

“However, 2017 is now behind us, and our transformation plan is well on course to return the business to profitability. We have made substantial improvements to strengthen and consolidate the business, with an unwavering focus on improving profit, cash and sales.”

Revenues edged 3pc lower to £66m for the year to December, as it axed a number of loss-making stores.

The changes saw it exit markets in Ireland, Denmark, Sweden and Norway, but increase its international footprint by opening an extra 26 franchise stores. It has more than 130 stores worldwide, including 50 franchise sites in India.

Mr Cunningham said UK like-for-like sales, which strip out new stores, had grown by 2.7pc in the eight months since the full-year update.

Hamleys is the oldest toy shop in the world, launching its first store in Holborn, London, in 1760. It was bought by China’s C.Banner for £100m in 2015.

According to its latest accounts, the toyshop was handed a boost after C.Banner waived the interest on a shareholder loan and extended repayment terms by three years to help Hamleys cope with the challenging UK market.

C.Banner was on the brink of rescuing House of Fraser earlier this year before calling time on a £70m lifeline when its share price plunged on the Hong Kong stock exchange.

Maplin, Toy R Us and Poundworld have already collapsed this year, while Mothercare, Carpetright and New Look have closed shops.

Source: Yahoo Finance UK