Hamleys breaks into profit

An extensive refit at the Regent Street store disrupted trade

The UK toy retailer Hamleys has broken into profit, albeit only just.

Pre-tax profit stood at £9,000 for the 26 weeks to 23 September against a loss of £2.6m in the corresponding period last year.

"The most important thing now is that we are back in profit after a pretty horrendous year last year," chairman Simon Burke said.

In its results statement, the retailer had earlier said: "The background is one of continuing refit work in the Regent Street store throughout the period, a depressed toy market and a fall in tourist numbers.

"As a result, like-for-like sales were unchanged across the group and the recovery in profits was achieved by a combination of improved margins and reduced operating costs."

Christmas challenge

Hamleys said its new internet retail and direct-to-the-home selling business Hamleys Direct had made "an encouraging start".

It incurred a "modest" loss of £50,000 in the period in line with expectations.

The refit of the flagship Regent Street store was "substantially completed" in September.

Hamleys said that since then it had seen "encouraging trends in... average spend levels".

Hamleys toys of the month

Soldier skittles

Bagpuss pyjama case

Subaru Imprezza model car

However, it said the retailing climate remained difficult.

"Against this background, achieving a strong Christmas result is a significant challenge.

"The Hamleys business is continuing to trade steadily and we remain confident in the recovery of the group's performance."

Failed sale talks

Mr Burke said he thought retailing generally had been slow to recover from September's fuel crisis.

"The fuel crisis affected our out-of-town operations but more generally, something like this does have an impact on spending, it's about confidence."

Hamleys has stores in:

Regent Street

Covent Garden

Heathrow, Terminals 2 and 4

Schipol Airport, Amsterdam

In July, the store said talks to sell the company to a private bidder had failed.

That offer was thought to value the company at 170 pence a share, or £36m.

In early trading on Wednesday, Hamleys shares stood at 132p, up 1p from Tuesday's close.

An interim dividend of 2.2 pence a share was declared, in line with last year.