Hamleys Toy Story has happy ending as the Regent Street boom continues

Hamleys made a profit of £100,000 this year, after losing £4.1 million in 2009 as recession-hit Britons reined in their spending.

Overall toy sales were up five per cent in the financial year to March.

The company put the improved performance down to "excellent growth" at its flagship store in Regent Street.

Chief financial officer Alasdair Dunn said staff had worked on enhancing the entertainment available to shoppers coming to Hamleys.

"We focused on injecting more magic and atmosphere with theatrical demonstrations and performers," he said.

"At some stores you just take the boxes off the shelves but Hamleys is more of an experience rather than a shopping trip. When things are difficult it's important to concentrate on the things you do well."

The store has held tropical-themed events for families throughout the summer holidays.

Mr Dunn said sales had been helped by the rebirth of Regent Street as a top-class shopping destination with the arrival of the first UK branches of American clothing stores Anthropologie and Banana Republic. The new Ferrari shop and the Apple store — the most profitable shop in London — are among the global brands drawing shoppers to the area, particularly overseas customers with greater spending power thanks to the weak pound.

Mr Dunn said: "The addition of quality retailers unique to the West End has certainly helped."

Hamleys says its success has left it "confident that the business is now positioned for the next phase of its development". The store has already opened franchises in Dubai, Jordan, Denmark and India and has further expansion planned in the Middle East and Balkans.

It predicts that Buzz Lightyear will be its biggest selling toy this Christmas.

HAMLEYS' TOP 10 FOR CHRISTMAS

Jet Pack Buzz Lightyear - £50
Ferrari F1 Electric Ride-On - £460
Stinky The Garbage Truck - £82
PaperJamz Guitar - £32
Vtech Kidizoom Video Camera - £75
Barbie Video Girl - £75
Ben10 Ultimate Alien Disc Ultimatrix - £23
Kung Zhu Hamsters - £13
Dave the Funky Monkey - £25
Beyblade Metal Fusion Super Vortex Battle Set - £32