Gitanjali Gems Ltd, India’s biggest jewelry retailer, plans to open about 500 stores by the end of the financial year as it seeks to tap demand in the world’s biggest gold-buying nation. The company plans to add 300,000 square feet of retail space in the year through March 31, up from its current 1 million square feet, Mehul Choksi, chairman of Gitanjali, said in a telephone interview from New Delhi. The company also plans to expand in China and the Middle East, he said.
The retailer is expanding in Asia’s third-biggest economy as economic growth and rising incomes raise demand for gold and diamonds, especially for use at weddings and religious festivals, such as the Akshaya Tritiya holy day when many Hindus buy gold. Jewelers, including Gitanjali, have countered rising prices for gold and diamonds by offering cheaper products.
“When prices go up that doesn’t mean the product isn’t popular, it’s just that you have to redesign the jewelry to reach out to more people,” Choksi said. Shares in Gitanjali rose 0.6 percent to 127.4 rupees at the close of trading in Mumbai, approaching its highest level since Jan. 14. They earlier rose as much as 1.1 percent. The benchmark Bombay Stock Exchange Sensitive Index declined 0.1 percent.
The company, based in Mumbai, aims to raise its share of India’s jewelry market to 5 percent from 3 percent, Choksi said. He didn’t say by when the company plans to achieve the target. The government estimates economic growth will accelerate to 8.5 percent in the financial year ending March 31, from 7.4 percent in the previous 12 months.
Gold reached a record $1,265.30 an ounce on June 21 as investors sought to buy the metal to protect their wealth amid concern that Europe’s sovereign debt crisis may derail the global economic recovery. Gitanjali, which bought Samuels Jewelers Inc. in 2006 and Rogers Ltd. in 2007 to expand in the U.S., said while it will watch the market carefully, its expansion will focus on India, China and the Middle East.
“The retail environment in the U.S. has picked up this year considerably but we still need to watch,” Choksi said. “In Japan, the recession has stayed for 20 years, so we don’t know what will happen in the U.S.”
The company plans to double the number of stores in China to 100 in the next three years, Choksi said. Gitanjali also plans to open its first company-owned outlet in the Middle East, where its products are currently sold through 50 non-exclusive jewelry stores, he said.
Have you read?:
- Gitanjali Gems Launches Jewelry Vending Machine
- Gitanjali forays into exclusive retail; plans 60 stores
- India To Package Water From US For Drinking In Middle East
- Gitanjali Gems ropes in KPMG to help restructure business
- Rajesh Exports to raise USD 1 bn
- Diwali Retail Sales Rocket To New Highs, Up Almost 80%
Recent Comments