(Article was originally published on September 1st)
Magasins de jouets sans frontières? Do you remember the TV game show It’s A Knockout or the Peter Gabriel song Jeux Sans Frontières?
Now it’s toy shops’ turn to expand beyond traditional frontiers. The great British retail toy institution that is Hamleys is just about to become French-owned if it is acquired by Groupe Ludendo at the end of August – just after we were going to press – thus ending a period of Icelandic tenure.
The synergy between Ludendo and Hamleys is clear to see. Both operate internationally and the economies of tapping in to a network of stores is obvious. Ludendo is in France, Belgium, Switzerland and Spain, plus the Middle East, while Hamleys operates in Denmark, Ireland, Cyprus, India and the Middle East. Mainland Europe must surely be one of the targets under consideration. Rome, Paris, Madrid and Moscow spring to mind.
Ludendo started as a single toy store in a northern Parisian suburb in 1977. Its brands include La Grande Récré and Starjouet. In 2006, the company bought the troubled Swiss toy retailer Franz Carl Weber. Hamleys was bought in June 2003 by Icelandic retailer Baugur for £58.7m. However, Baugur collapsed and its stake was taken over by Landsbanki, which was nationalised in 2008. Hamleys is currently controlled by Landsbanki, but the UK retailer is being supervised by a committee, which includes British retailers, and is charged with selling off a number of the bank’s assets. The committee plans to return any sale proceeds to Landsbanki’s creditors.
Ironically, it’s already auctioned off food retailer Iceland.
I think the impression that Hamleys is an important player in UK toy retailing is very much a case of smoke and mirrors. Its legendary status as a dream toy shop for kids obscures the facts.
Yes, it can be a useful shop window to launch product because Regent Street is a prominent, highly visible location, but the fact that Hamleys made its first profit since 2006 last year means it is hardly a shining retail light. It’s a great venue to grab press attention, but don’t expect big sales numbers.
Overseas expansion to take the brand to prestigious locations is the obvious option. I am assuming Ludendo already realises this and has planned accordingly.
Previous owners have talked about upscale locations.
Hopefully, this time there will be no laughable attempts to open in places like Luton and Harrow, as previous management once did. Younger readers may be shocked to be reminded that carpet retailer Harris Queensway once bought Hamleys and attempted to convert some of its own locations into Hamleys stores. Needless to say, it was an epic fail. There were other attempts to take Hamleys into heritage towns like Bath and York, but it was all in vain.
Premium toys and discount carpets, it seems, do not share a demographic Venn diagram.
Jon Salisbury has written about the toy business since 1985, editing magazines and running toy media events in New York and London. He can be contacted at email@example.com or @JonSalisburywww.wotkidzwant.com.