Kerala-based Kalyan Jewellers is eyeing a turnover of ₹13,000 crore this fiscal (FY-17) banking primarily on its ₹900-crore retail expansion plans through 20 stores in India and in the United Arab Emirates (UAE).
The company, which has PE investor Warburg Pincus as a minority shareholder, will fund expansion plans mostly through own resources. It has 76 stores in India and 21 in Qatar, Kuwait and the UAE.
According to Ramesh Kalyanaraman, Executive Director, there are no immediate plans to raise funds. And, the company has already invested ₹300 crore towards six of the 15 showrooms it planned to set up in the country this fiscal.
Three stores have come up in Rajasthan in April and another three are expected in Kolkata on Monday. While five stores are in the works in Uttar Pradesh and Madhya Pradesh, the rest nine will be in South India.
“We are targeting a 30 per cent jump in turnover to ₹13,000 crore this fiscal. Expansion will be through company-owned stores only. As of now, the focus is to have stores in tier I cities outside South India,” he told BusinessLine during an interview.
Of the ₹10,000 crore topline last fiscal, 15 per cent or ₹1,500 crore came from overseas retail operations.
Five new stores will come up in the UAE and a foray into Singapore and Malaysia are being explored too.
Regional focusGold jewellery retailing in the country continues predominantly a regional affair. However, Kalyanaraman pointed out that his company’s strategy was to stock a mix of in-house sub-brands – such as ‘Apoorva’, ‘Tejasvi’ ‘Mudhra’, ‘Anokhi’, and ‘Antara’ collections – along with regional preferences to make the offerings attractive. (Kalyan has 17 such in-house sub-brands.)
The mix of regional and in-house brands varies on local tastes. For example, it may be a 50-50 mix in some cases or can go up to 70-30 in favour of regional preferences.
This apart, Kalyan Jewellers is also banking on what he claims as “transparent pricing” where the “making cost” calculations are clearly explained to customers.
“We expect customers to come to us either looking for a wide range of choice in offerings or they are brand-conscious buyers, apart from our transparent pricing system,” Kalyanaraman added.
Currently, Kalyan Jewellers has three manufacturing facilities – one in Coimbatore (Tamil Nadu) and two in Thrissur (Kerala) and some 2,000-odd on contract.
The company is also eyeing a fourth facility in Bengal.
“The West Bengal unit is a long term plan and depends on how the cost and break-even analytics work out,” he added.