Kalyan Jewellers plans to open 52 new showrooms in non-South market next year. The company has taken the franchise-owned-Kalyan operated model for its expansion in new markets.

The expansion plan would lead to an investment of ₹1,300 crore which will be largely borne by the franchise.

The non-South region currently contributes 35 per cent of the company’s India business. As per the existing model, both franchise and Kalyan Jewellers will work on gross margin basis while sharing expenses on pre-agreed terms.

After successful piloting the franchise model, Kalyan Jewellers had opened 14 showrooms so far this fiscal and will add another 12 more by end of this fiscal.

Ramesh Kalyanaraman, Executive Director, Kalyan Jewellers told businessline that the company has set a target to achieve half its revenue from non-Southern market by 2025, but given the response from the new markets and planned expansion the set target should be achieved much ahead of the deadline.

Eyeing higher revenue

Revenue from the non-South market accounts for 35 per cent of India business and this should easily cross 40 per cent by next financial year, even as sales in southern markets are growing strongly, he said.

The company will lay strong emphasis on extending its geographical footprint in tier-II and -III markets in the North, East and Western region.

Kalyanaraman said the company recorded an impressive trailing twelve months revenue of about ₹13,000 crore with net profit of ₹425 crore as of September-end as jewellery business is progressively shifting from unorganised to organised players, thanks to government policies.

Dismissing concern on high inflation impacting gold demand, he said jewellery is no more considered a luxury item, and is a kind of social security and buying for an occasion.

The growth in demand paused for a week when gold prices shot up last week, but since then it is back to normal . The company expects revenue growth of 30 per cent this fiscal and it should be much better next fiscal given the kind of expansion, he said.

The company also plans to replicate franchise-owned-company operated model for expansion in the Middle Eastern market after completion of the pilot project by end of this fiscal.

candere.com, the e-commerce wing of the company has opened its first physical centre in Mumbai at Malad and will open another in Borivali soon.