Toy retailer Hamleys has kick-started its international expansion after signing a franchise agreement to open in the Balkans. Hamleys is targeting nine markets in the Balkans, and this month will open franchise shops in the Middle East and India.

Hamleys has just two international stores at present, in Dubai and Jordan. It had laid out plans to expand globally last year but suffered a setback after talks with a franchise partner in Russia collapsed.

However, Hamleys has now partnered with franchisee Delta Sport to open in central Belgrade in Serbia this October. The retailer is also mulling shops in Romania, Bulgaria, Slovenia, Croatia, Bosnia, Montenegro, Albania and Macedonia.

Hamleys chief executive Gudjon Reynisson said: “The Balkans is an exciting market for Hamleys. The new generation of governments have laid the foundations for robust market economies, growing domestic demand and improved living standards. It is an extremely good prospect but we are taking it one step at a time. We’ve not decided how many stores will be opened.”

Hamleys will open its second shop in Dubai on March 16 and its first Indian shop in Mumbai on March 26.

The Hamleys Belgrade store will be “very similar” to the 20,000 sq ft Hamleys shop in Glasgow’s St Enoch centre, according to Reynisson.

Delta Sport, which is headquartered in Belgrade, has opened stores in the region for Nike as well as Inditex fashion brands Zara, Pull and Bear, Massimo Dutti and Bershka.

Planet Retail global research director Bryan Roberts said: “The Balkans is an interesting market that other foreign retailers are looking at.

“The spending power in the region is much lower than in Western Europe but it is growing. Hamleys is a nice aspirational brand so people will be willing to spend money with it. There is a lack of competition from other toy retailers so it is a logical step for Hamleys.”

Separately, Hamleys’ ownership structure has changed. The 34% stake owned by collapsed Icelandic investment firm Fons has been acquired by Pillar, a holding company of Banque Havilland - the renamed Kaupthing Luxembourg, which collapsed and was acquired by British investment firm Blackfish Capital.

Icelandic bank Landsbanki remains the majority shareholder, with a 66% stake.

Reynisson said: “Pillar, like Landsbanki, is extremely supportive of our plans. Hamleys is a very self-sufficient brand that doesn’t need any injection of cash from its shareholders.” He added that the past 12 months had been “a good year” for Hamleys in terms of trading.

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