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Why Asia’s Richest Man is Buying the World’s Oldest Toy Store

May 10, 2019, 9:57 AM UTC
Hamleys Unveils A Whole New World With It's Christmas Windows Display
LONDON, ENGLAND - NOVEMBER 02: Hamleys Unveils A Whole New World With It's Christmas Windows Display at Hamleys Regents Street on November 2, 2018 in London, England. (Photo by David M. Benett/Dave Benett/Getty Images for Hamleys)
David M. Benett Dave Benett/Getty Images for Ham

Mukesh Ambani, Asia’s richest man, sealed another deal to expand his retail footprint and add heft in a battle with Inc. and Walmart Inc. in India.

Reliance Brands Ltd. agreed to purchase the 259-year-old British toy-store chain Hamleys from C.Banner International Holdings Ltd. for almost 68 million pounds ($88.5 million) in cash, the unit of Ambani’s Reliance Industries Ltd. said in a statement late Thursday. The transaction would “catapult Reliance Brands to be a dominant player in the global toy retail industry,” it said.

Reliance’s shares rose as much as 1.6% on Friday in Mumbai trading, rebounding after four straight sessions of decline.

The acquisition is the latest in a string of purchases in Ambani’s push into the consumer business, which he says will contribute nearly as much as to the conglomerate’s total earnings as its core energy business by the end of 2028. Adding Hamleys would give Reliance 167 stores across 18 countries. The company is already a master franchisee of the toy store in India, where it operates 88 outlets.

Hamleys, which was founded in 1760 and opened its flagship store on London’s Regent Street in 1881, has been something of an international hot potato in recent years. Iceland’s Landsbanki Islands Hf. sold it to France’s Ludendo Groupe in 2012, and C.Banner paid 100 million pounds for it in 2015.

Though the Regent Street store is a beloved tourist attraction, the chain has suffered from the malaise that claimed Toys “R” Us Inc.’s U.K. unit in 2018 and afflicts shopping streets around the world. Two of the 10 Hamleys stores in South Africa closed this year when their franchisee filed for bankruptcy protection.

For Hong Kong-listed C.Banner, the sale would mark a retreat from the U.K. after the Chinese company last year dropped plans to purchase a majority stake in House of Fraser, a struggling department-store chain that was rescued by Sports Direct International Plc.

Ambani is stitching together a network of partners through stake purchases or outright acquisitions in the race with Amazon and Walmart for a slice of India’s growing online shopping market, which Morgan Stanley estimates will be valued at $200 billion by 2028.