Iconic toy retailer Hamleys has parted company with two senior directors as part of a restructure of its head office, which could also result in a third of staff being axed.

Chief executive Gudjon Reynisson said the change will “reduce central costs necessary to improve Hamleys’ operational model”.

Reynisson, who was parachuted into the retailer by its former and now-defunct owner Baugur a year ago, has been conducting a “full business strategy review”, which is expected to be completed today.

The review has already resulted in chief operating officer Paul Currie – who was widely regarded as Hamleys’ second in command – and director of buying and merchandising Diane Lee leaving the retailer. Hamleys is in consultation with its other head office staff, which could mean 18 further redundancies out of a staff of 60.

Reynisson said: “We are clearly in the midst of a tough economic climate and we need to improve our operational model to continue to be successful. The new structure will be flatter, simpler and more flexible, making us well placed to cope with any further deterioration in economic conditions and leaving us in a strong position to gain when the upside comes.”

However, he said that trade has been strong recently, and like-for-likes have climbed 5 per cent since the beginning of April.

Retail Knowledge Bank senior partner Robert Clark said although Hamleys is operating in a “difficult marketplace” it has failed to grasp opportunities to extend the brand.

Clark said Hamleys’ track record of restructuring management has “not been too encouraging. It needs a Ben Gordon to do a Mothercare on it. It needs some stability”.

Hamleys appointed Landsbanki director of risk and portfolio Sally Ingleson to its board last month. Landsbanki owns a 64 per cent stake in Hamleys following the collapse of Baugur’s UK arm in February (RW Online, February 4).

At the time a Landsbanki spokesman said the appointment was “confirmation of the confidence we have in the long-term value of Hamleys”.

Reynisson said: “Paul Currie has agreed to step down after four and a half years. Paul has played a pivotal role in developing the business and played a significant part in supporting the major changes that occurred during the tenure of three chief executives. At all times he played a major role in developing and shaping strategy followed by its implementation. His contribution and retail professionalism has been an invaluable part of the business.

“As a part of a restructure to better fit the current business environment and growth plans, which Paul has been actively involved in shaping, he felt that the Directorate could not justify members that had common skills and capabilities. It is therefore with regret that Paul Currie will be leaving the business.“