Indian tycoon Mukesh Ambani has signalled a major strategy shift by acquiring iconic British toy retail chain Hamleys. The elder Ambani sibling has been preparing for diversification of his petrochemical empire into telecommunications and retail segments. While the launch of Reliance Jio in 2016 marked his foray into the telecom sphere, Reliance Retail marked his entry into the domestic retail segment. Now, the petroleum to telecommunications to retail conglomerate is striking out across the continents with the Reliance Brands acquisition of 100 per cent stake in Hamleys from Chinese company C Banner International Holdings listed in Hong Kong stock exchange.
Though Reliance did not disclose the price, C Banner had bought it for $130.2 million from France's Groupe Ludendo, according to a Reuters report. "The worldwide acquisition of the iconic Hamleys brand and business places Reliance into the frontline of global retail," said Darshan Mehta, chief executive of Reliance Brands.
Reliance Brands already had the license to sell Hamleys products in India and has been running 88 outlets in 29 cities in the country. The deal brings in all the 167 stores of the iconic brand in 18 countries under the Reliance subsidiary's ownership. Founded in 1760, Hamleys resonates with a sense of nostalgia for adults and children alike, with its flagship Regent Street store in Central London recognized around the world, the report says. Hamleys withstood global recessions, and world war bombings and has changed hands several times, the latest being the 2015 sale by Groupe Ludendo.
Hamleys' acquisition will give wings to Reliance Industries strategy for taking on Amazon and Walmart not only in India but around the globe. Walmart has a strong online presence in India through Flipkart, which it acquired in 2017.
Reliance Retail is already the country's biggest bricks-and-mortar retailer in terms of revenue and number of stores. The conglomerate's diversification strategy to reach beyond refining and petrochemicals has begun to bear fruit, with Jio becoming the second biggest mobile telephony company and gaining fast on market leader Vodafone Idea. The price war that Jio unleashed in a bid to build its subscriber base put out of business some of the smaller operators and ignited a consolidation spree.
Reliance's retail business revenue doubled to Rs 35,600 crore in the three months ending on December 31 while earnings before interest and tax tripled to Rs 1,500 crore, according to the company's regulatory filings.