Hamleys' sales slide as US tourists stay home

Hamleys, the toy retailer, yesterday warned of a sharp fall in sales since the terrorist attacks of 11 September, saying tourist traffic in central London had all but disappeared.

The company, whose flagship store is on London's Regent Street, said the number of American visitors was close to zero.

Simon Burke, Hamley's chief executive, said: "I haven't heard an American accent in our Regent Street store for weeks. Sales fell sharply after September and have stayed depressed since."

In the 10 weeks to 10 September like-for-like sales at Hamleys' Regent Street store were up 13 per cent, boosted by a 23 per cent increase in sales to domestic customers. But in the eight weeks after 11 September sales at the store fell by 5 per cent, with sales to overseas visitors plunging 26 per cent.

Hamleys said the outlook for the year depended entirely on Christmas which accounts for 50 per cent of group profits.

Analysts have cut their full-year profit forecast from £3.75m to £2.5m.

Hamleys' woes fuelled fears that other major retailers such as Harrods and Harvey Nichols must be struggling in tourist haunts like Knightsbridge.

Sales at Harrods are said to be down by 40-50 per cent since the terror attacks.

At Hamleys Mr Burke said the group was well prepared for Christmas. Asked to name the hot sellers he said. "It's Harry Potter, Harry Potter and Harry Potter. The lego Hogwarts Castle is the subject of panic buying and we're having distressed parents on the phone."

A £99 radio-controlled hovercraft is also selling well, Mr Burke said.

The comments came as Hamleys reported an £890,000 loss for the six months to 29 September compared to a £9,000 profit the year before. This was largely due to operating losses and asset writedowns at the group's Toystack chain, which has been converted to a new concept called The Bear Factory that sells custom-made teddy bears.

The main Regent Street chain saw profits dip slightly to £2.7m from £2.9m.

Hamleys shares closed down 2.5p to 111.5p.