Hamleys opens Europe's largest toy store in Moscow

Europe's largest toy store opened in Moscow this week as Hamleys ploughed on with expansion plans in Russia despite the collapse of the rouble and the economic crisis in the country.

The 7,000-square-metre shop is the centrepiece of Hamleys' international expansion strategy that will see overseas revenue overtake UK sales this year for the first time in its 255-year history.

Gudjon Reynisson, chief executive, said the toy retailer was committed to expansion in Russia, despite the economic downturn and the impact of the falling value of the rouble when profits are converted back to sterling.

"I wouldn't say that profits have been wiped out but of course the currency difference influences our numbers," he said. The Hamleys brand had been "remarkably resilient" in Russia and sales had continued to grow year-on-year despite the turmoil, he added.

Hamleys now has 40 franchised stores overseas, primarily in India, northern Europe, Russia and the Middle East. Mr Reynisson said Hamleys had plans to "ramp up the growth significantly" by opening a further 20-25 stores in 2015 and expanding into new territories such as South Africa and Vietnam.

The Moscow store is set to become the largest in the world if Toys R Us vacates its flagship store in New York after the lease expires in 2016.

While Hamleys has opted to try and weather the storm with its franchise partner in Russia, its third-largest international market in terms of sales, other retailers have decided to pull out or slow their expansion.

In November, New Look, the fashion retailer, said it was exiting both Russia and Ukraine due to the political uncertainty in the region.

Car manufacturer General Motors has pulled product lines and closed a factory near St Petersburg in response to the downturn, while Peugeot and Mitsubishi have suspended production at a jointly owned factory near Moscow.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation