Mukesh Ambani finds the answer to his latest retail puzzle



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It is another day, another cunning move of the stables of Mukesh Ambani, India's richest man. According to reports released yesterday, Reliance Retail is in talks to buy Hamleys, the legendary British toy store with a centuries-old history of its current Chinese owner.

According to internal sources, the negotiations are already in the final phase with C Banner International, the Chinese company that owns the famous toy retailer.

Moneycontrol, which first broke the news, revealed that Reliance Retail is aggressively pursuing the deal and that due diligence for it is already in an advanced stage.

Hamleys – the company that has its origins in the oldest toy store in the world – is already the largest toy retailer in India. Analysts are unanimous in saying that a definitive takeover of the iconic brand will likely give Ambani a snapshot in retail – an ideal launch pad for its ambitious e-commerce venture later this year, something experts say may reshape Indian retailers .

Reliance Brands – Reliance Retail's label operator – is Hamleys' largest franchisee in India from now on. It operates the largest number of foreign brands in the country.

Ambani's new weapon
Hamleys could be one of Mukesh Ambani's main weapons as he prepares to push India to exhaustion through its incursion into e-commerce – a market that will sell everything from fashion to toys and food, analysts said.

If the deal is completed, Reliance Retail is likely to increase Hamleys' presence in India – something that could help Ambani strengthen its position in the retail industry. Equally important, Hamleys will give Reliance Retail a global presence that the company does not currently have.

Despite its huge sales network in India, Reliance Retail has so far no presence abroad.

From C Banner to Ambani

Reliance Retail has a long history of bringing renowned foreign brands to India, whether through joint ventures or through licensing / franchise pacts. As listed by a BS history, it has a 50-50 joint venture with Marks & Spencer in India and a similar venture with UK Vision in Vision Care.

In addition to these, Reliance Retail has trademark licensing agreements with many famous global companies, such as international famous brands Kenneth Cole, Salvatore Ferragamo, Steve Madden and the European brand of Replay denim.

Other well-known ventures include those with Quicksilver, Superdry, Villeroy & Boch, etc., among others.

Lately, Reliance has gone beyond its core business domains – petrochemicals and refineries – and emerged as a formidable competitor in retail and telecommunications.

Hamleys: A Toy Story
Hamleys, which had its origins in a London store founded in 1760, opened its first store in 1881. The company's website says, "When Queen Victoria came to the throne in 1837, Hamleys was already a landmark in London."

Currently, it has about 130 stores spread across Asia, Europe and Africa. Up to 87 of these establishments are in India with Reliance, and an agreement is in place to start 20 more stores here.

The iconic chain of stores has changed hands three times in the last decade and a half. If this acquisition happens, Reliance will be its fourth owner since 2003. Its current Chinese owners bought the company in 2015 for just over $ 150 million. It has seen consistent drop in sales and fall in appreciation after the rise of online merchants.

The company was taken off the list of London stock markets in 2003 by then-owner Baugur Group of Iceland, which bought it for almost $ 69 million. It was then sold to Groupe Ludendo of France for $ 78.4 million. After this acquisition backfired on the company, it was sold to its current Chinese owners.

According to several reports, the Chinese company some time ago tried to unload Hamleys after incurring a heavy loss after another.

Hamleys last reported its winnings in 2017, showing a £ 12 million loss. It was a nearly 500 percent drop that the company blamed Brexit, uncertain macros and terrorist attacks.

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