Toy store Hamleys fell into the red today as it revealed a sharp fall in sales to domestic and overseas shoppers since the terrorist attacks in the US.
The retailer has seen business tumble at its flagship Regent Street store as customers stay away from London in the aftermath of the 11 September atrocities.
However, Hamleys’ chairman Simon Burke said despite the setback the toy chain would continue to develop its business through Hamleys Direct and Bear Factory – the regional brand that has taken over from Toystack.
Of the 16 Toystack stores trading earlier this year, 11 have now been rebranded Bear Factory, with the rest either closed or sold.
Seven more Bear Factory stores have opened including three in recent weeks, at Meadowhall in Sheffield, the Metro Centre and Eldon Square in Newcastle.
Sales to overseas shoppers, identified from analysis of credit card spend and country of card issue, fell 26% in the eight weeks following the attacks.
This compares to a decline of just 3% on last year’s levels in the previous 10 weeks and the fall in trade with UK customers has been just as dramatic. Sales to domestic shoppers rose just 2% in the eight weeks after the attacks compared to growth of 23% in the previous 10-week period.
Overall, the Regent Street store has seen sales swing from growth of 13% to a fall of 5%, wiping £170,000 off group profits in the second half of September.
Hamleys still reported an operating profit of £600,000 in the first half to 29 September before one-off costs, compared with £400,000 a year ago. Overall turnover, including the group’s catalogue arm Hamleys Direct and its regional stores, rose 6% to £17.5m.
But taking into account higher rent at Regent Street and restructuring costs at its loss-making Toystack chain, Hamleys fell into the red. The retailer made a pre-tax loss of £890,000 compared to a profit of £9,000 in the same period last year.
Burke said: “We remain confident that this strategy will deliver recovery and growth in the years to come.”
Hamleys is maintaining its interim dividend payout to shareholders at 2.2p per share, an amount due to be paid in January. The 241-year-old group’s shares slipped after the results and were down 2.5p at 111.5p by lunchtime.
A year ago, Hamleys revealed that it was considering a sale of the business but it eventually called off the talks in February. Despite interest from several parties the retailer said the approaches were not “sufficiently firm” or at a high enough price.
EGi News 13/11/01
