Reliance Retail, UK firm tie up for toys

Plans Rs 125-cr spend each year for next 8 years to set up 20 stores under the Hamleys brand.

Mukesh Ambani-promoted Reliance Retail (RRL) today announced a master franchise agreement with UK's Hamleys, one of the world's largest toy chains, to market the company's products in the country.

RRL will invest Rs 125 crore each year over the next seven to eight years. The company plans to open 20 stores under the Hamleys brand in the next seven years.

SERIOUS BUSIENSS Reliance Retail is set to open 20 stores under Hamleys name in the next seven years This will be the first time that Reliance Retail is going for a franchise agreement It has done equity joint ventures in the past with that of UK's Marks & Spencer, Apple Inc of US, Office Depot and Vornado of US The country's toys and games market is estimated at Rs 2,500 crore and dominated by unorganised retailers

“The company will be opening two stores in Mumbai and New Delhi next year, followed by expansion in other regions,” the company said in a release.

This will be the first time that Reliance Retail is going for a franchise agreement in the lifestyle and luxury space. The company, in the past, has formed equity joint ventures in the past with UK's Marks & Spencer, Apple Inc and Office Depot of the US.

"Hamleys overseas expansion plans are based on the franchise route. They do not opt for joint ventures," said a Reliance Retail spokesperson.

Hamleys will also help in training staff, designing stores and developing private label products to complement the brand. Reliance's nation-wide network is expected to be a major help for Hamley's expansion in the country.

The country's toys and games market, estimated at Rs 2,500 crore, is dominated by unorganised retailers. Mahindra Retail, part of the Mahindra group, has announced a chain of premium lifestyle stores selling apparels, toys and furnishings.

The Mahindra group has licences to distribute children's apparel, toys and furnishings of giants such as Walt Disney, Mattel, Lego and Woolworths' Ladybird. The RPG Group has tied up with Woolworths for the Chad Valley toy brand.

Reliance Retail started its first store in November 2006 and now operates more than 600 stores in 57 cities over a retail area of 3.5 million sq ft.

The retailer runs neighbourhood store Reliance Fresh, consumer durable chain Reliance 

Digital, hypermarket chain Reliance Mart, apparel chain Reliance Trends, footwear chain Reliance Footprint, among others.

Bijou Kurien, president and chief executive officer, Reliance Lifestyle Holdings, a subsidiary of Reliance Retail, said, “Our partnership with Hamleys heralds the beginning of a new era in the evolution of the toy market in India. We hope to bring world class toy stores which will capture the imagination and attention of children in India. We are tremendously excited about this venture and our decision to partner with Hamleys.”

Paul Currie, trading director of Hamleys, said, “It’s going to be a fantastic and exciting stage in our international development and we are sure that our Indian customers will love the magical elements of Hamleys, which guarantees the best of the past, present and future for all children (both young and old).”