TOY distributor and wholesaler Manley Group is planning to diversify into the retail business following the opening of its $200 million headquarters in Cheung Sha Wan yesterday. Group chairman and chief executive Samson Chan said retail outlets would be established in Hong Kong and China in a move to strengthen the company's sales network. ''Recognising the increase in consumer demand for affordable, high-quality products such as toys, kitchenware and other household goods, the group will make an attempt at expanding its retail sales network in both markets,'' Mr Chan said. He said the expansion plans were expected to boost the group's turnover, currently at $950 million, bringing growth of about 20 per cent by next year. Plans for the establishment of six retail outlets in Hong Kong are under way and the total number of stores is expected to grow in the next three years. The group is also looking into setting up a toy plant in Shanghai to further support its production facilities in Dongguan, Guangdong province. ''We view China as a cost-effective production centre,'' Mr Chan said.