Published
Sep 21, 2016
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Gitanjali Gems to double retail footprint, focus on diamond jewellery

Published
Sep 21, 2016

Jewellery retailer Gitanjali Gems, which owns brands such as Asmi, D’damas, Nakshatra and Gili, plans to double its retail footprint from 5,000 stores to 10,000 stores in India and overseas in the next two years, according to a report by Livemint.


Gitanjali hopes to double its retail footprint across the globe - Gitanjali Group


The expansion plan follows the company’s efforts to consolidated its business over the last three years and change its model, focusing on diamond jewellery -- instead of gold -- and on exports, as the domestic business environment remains challenging.

In fiscal 2012, the company received 60% of its revenues from gold and 40% from diamonds. In fiscal 2016, diamonds accounted for 70% of its revenues and gold contributed 30%. Moreover, India, which accounted for a majority of its revenues at 65% in fiscal 2012, now accounts for just 35% of revenues. Meanwhile, exports to countries like the U.S., accounted for 65% of revenues, as of fiscal 2016.

“The real highlight for the last three years was restructuring of company, innovation in product lines, increasing capacities, moving from gold to diamonds and domestic to export,” said Mehul Choksi, chairman and managing director, Gitanjali Gems, explaining that the company has increased its capacity to become the world’s largest manufacturing company in jewellery retail globally and also simplifying its operating structure to bring down costs.

Since 2013, Gitanjali has lost 60.61% of its market capitalization from Rs.5,453.96 crore to Rs.333.43 crore in 2016. Its net profit declined from Rs.591.69 crore to Rs.133.24 crore and revenues dropped 5.21% from Rs.16,418.50 crore to Rs.13,984.49 crore in fiscal 2016.

“It will take us another two years to surpass Rs17,000 crore in topline,” said Choksi.

In the last one year, the company has also merged 9-10 different companies to broadly have four large companies. In June this year, the company merged Gitanjali Exports Corp., a wholly-owned subsidiary, with itself. In July, it merged brands Asmi Jewellery India and Spectrum Jewellery under Nakshatra Brands, which will now represent its brands business of Asmi, Sangini, Nizam and Parineeta.

The third company Gili India will look at merging retail and lifestyle companies such as Maya Retail Ltd, Gitanjali Lifestyle and Gitanjali Jewellery Retail within itself. The fourth company Aston Luxury Group is the holding company for its international operations.

Gitanjali Gems was one of the three India brands that featured for the first time in the top 100 Global Powers of Luxury Goods 2016 report of Deloitte titled 'Disciplined Innovation'.
 
 

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