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Toy store chain Hamleys reported a loss last year with the firm blaming factors such as Brexit and the threat of terrorism for the downturn.

The retailer reported a £9.2m loss for the year to 31 December, having made a £1.7m profit the previous year.

Hamleys, which was founded in 1760 and is the world’s oldest toy retailer, said it closed some stores last year and left some low-growth markets.

It added that it had the backing of its Chinese owner, C.Banner.

“In the UK, 2017 was one of the most challenging years in UK retail history, and Hamleys was not immune to the impact of Brexit uncertainty, terrorist attacks, macroeconomic pressures and a general erosion in UK consumer confidence,” the firm said in accounts filed at Companies House.

It said the retail environment in 2017 was “difficult”, with higher costs, rents and rates, and adverse foreign exchange rates.

Hamleys said there had been “softening” consumer confidence and the threat of terrorism had resulted in reduced the number of shop visitors.

It opened four stores in the UK, but closed two.

The company said that the UK retail outlook “remains challenging in 2018” as spending continues to be hit by “unprecedented consumer uncertainty”.

However, it added: “Despite the continuing challenges to the UK market, we are confident that the actions that we have taken will lead to sustained improvements to profitability and like-for-like sales in 2018.”