The first shop stood at No. 231 High Holborn, an address that no longer exists. William Hamley named it Noah's Ark and stocked the toys a Georgian child might recognise: wooden animals, hoops, dolls, tin soldiers. The business passed from father to son. By 1837, when Queen Victoria came to the throne, Hamley's grandsons were running a shop that already counted royalty and the nobility among its customers. The store had become an institution within seventy-seven years of opening. In 1881, a second branch opened at 200 Regent Street in the heart of London's West End. This was the West End that Nash had laid out, the West End of Edwardian shopping arcades, of department stores selling exotic goods from across an empire. A toy shop fit perfectly into that landscape. In 1901, fire destroyed the original High Holborn store. The business relocated to 86 to 87 High Holborn and kept going.

The 1920s were hard on Hamleys. The store entered receivership in 1931, the depths of the Great Depression. The Lines Bros toy company, which was Hamleys' largest creditor and which would later become one of Britain's most important toymakers as Tri-ang, bought the company. They reopened the Regent Street store by the end of that year, deliberately keeping Hamleys operating largely independently from the parent toymaker. Royalty noticed. In 1938, Queen Mary granted Hamleys its first royal warrant. The store would later hold a royal warrant from Elizabeth II continuously from 1955 until her death in 2022, a span of 67 years. The current flagship building at 188 to 196 Regent Street opened in 1981, expanded across seven floors, and remained the largest toy shop in the world as late as 1994.

The late twentieth century saw Hamleys passed between owners with bewildering frequency. The Burton Group acquired it in a 1985 takeover, then sold it the following year to Harris Queensway, a retail group led by Philip Harris. Harris Queensway itself was absorbed into Lowndes Queensway in 1988. In May 1989, Lowndes Queensway sold Hamleys for £22 million to a group led by Duncan Chadwick. The Icelandic Baugur Group bought Hamleys in June 2003. When Baugur collapsed during the 2009 financial crisis, the Icelandic bank Landsbanki took over. In September 2012, the French toy retailer Groupe Ludendo bought Hamleys for a reported £60 million. Three years later it was sold again, this time to the Chinese footwear and fashion conglomerate C.Banner. Finally, in May 2019, the Indian retailer Reliance Retail, part of Reliance Industries, acquired Hamleys for £67.96 million. Through all these changes, the Regent Street doors stayed open.

Hamleys's first overseas store opened in Amman, Jordan, on 18 June 2008, a three-storey building on Mecca Street operated by a local franchisee. Dubai followed in November of that year. The first South Asian store opened in Mumbai on 9 April 2010, a 22,000 square foot space in the financial capital's upmarket shopping district. The Chennai store at Express Avenue Mall installed a London bus that customers can walk up through. By 2018, Hamleys operated in 26 Indian cities. Stores opened in Riyadh in 2012, Moscow in 2012, Kuala Lumpur in 2013, the Philippines in 2014, Singapore and Cape Town in 2015, Prague and Hull in 2016, Warsaw in 2017. A Tirana, Albania store opened in November 2022 across two floors of the Emerald mall. A Rome store opened in 2023. Today there are over 90 franchises worldwide. The UK footprint has shrunk in the same period: from thirty UK stores at the start of 2022 to just eleven by the end of 2023.

The Regent Street flagship has become an experience as much as a shop. The seven floors are themed by department and demographic, with magicians and demonstrators performing live at toy stations, employees in red and white uniforms blowing bubbles and bouncing balls and recruiting passing children into impromptu games. At Christmas, the queues outside stretch down Regent Street, and the famous animatronic Paddington Bear that once stood in the store, which Hamleys had bought the character rights for, was auctioned for the National Society for the Prevention of Cruelty to Children. The website, hamleys.com, was launched in 1999. In 2006 a software glitch briefly let customers claim a 60 per cent discount on any product. The official UK website was critiqued by industry analysts in 2013 for not living up to the brand. Whatever the digital growing pains, the physical store stays the centrepiece: a Georgian-founded, Edwardian-built, Indian-owned monument to the simple Victorian idea that childhood was a category worth selling to.