Hamleys saw profits divebomb over 500 per cent last year as it blamed Brexit, macroeconomic factors and terrorism for a £12 million loss.
For the year to December 31 2017, the iconic toy retailer saw profits drop from £2.6 million in 2016 to a £12 million loss, while revenues dropped 2.5 per cent to £66.3 million.
Throughout the period Hamleys closed six stores and four franchises and ceased trading entirely across three markets including Sweden, Denmark and Norway.
The reduction in its store estate, which now includes 100 franchise units and 29 stores, was attributed to its falling sales, while it blamed a number of factors including the implementation of its transformation plan to its stark decline in profits.
“While our international franchise business experienced good growth, last year was one of the most challenging years in UK retail history,” chief executive Ralph Cunningham said.
“Hamleys was not immune to the impact of Brexit uncertainty, macroeconomic pressures, a general erosion in UK consumer confidence and falling customer footfall due to the threat of terrorism.
“Our results for 2017 reflect these market pressures and the one-off impacts of the fundamental strategic review of the business undertaken by our new management team in the fourth quarter of 2017.”
Its turnaround plan, which is set to see the retailer focus on its international and travel arms, is understood to be well underway.
Cunningham added: “2017 is now behind us and our transformation plan is well on course to return the business to profitability. We have made substantial improvements to strengthen and consolidate our business, with an unwavering focus on improving profit, cash and sales.”
This strategy is also understood to already be bearing fruit and Hamleys expects to return to “net profitability” in the next year.
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