Golden glow

Kolkata's jewellers are rising to competition through aggressive expansion. And their strategy seems to be working...

The gold rush in Indian retail is old hat; what is new, is the rush into gold-jewellery retail. With corporates like Pantaloons, Gitanjali Gems, Rajesh Exports getting into the sector in a big way, some Kolkata-based traditional jewellery-houses are expanding fast in a bid to retain market share and grow top-line.

Take MP Jewellers. Started in 1945 with one store in Jorasanko, the second store coming up in Gariahat in 1978 and the third in 1995. Nine years later, in 2004, MP Jewellers opened two more outlets within the city, and stepping out, one at the Gold Souk in Gurgaon.

Since 2005, there has been a veritable flood with five stores opening in Bardhaman, Durgapur, Behrampur, Guwahati, Silchar. Shibankur Roychoudhury, director, MP Jewellers, says the company is now eyeing Siliguri, Haldia, Cuttack, Jamshedpur and Ranchi for future stores.

Senco Jewellers, another old-timer, has a similar growth trajectory. Since 2000, it has opened stores in seven district towns of the state, with three more to come up soon. Looking beyond the state, Senco, renowned for its intricate gold jewellery, will be going to Tripura, Assam and Sikkim.

The other jewellery house on aggressive expansion mode is PC Chandra, which has opened branches in Siliguri, Malda, Bardhaman, Asansol and Midnapore over the past two years, besides five within the city itself.

Two more stores will open in the city, and four more in the B cities, says Prosanto Chandra, deputy managing director, PC Chandra. Incidentally, PC Chandra is also the only one to have tried to tap the market in other regions, especially in the metros, with its tie-up for shop-in-shops within Globus malls.

The logic is clear "" "If you don't expand, you'll perish," says Chandra. And if you have to expand, going to the B towns makes sense, not just because of the lower cost of setting up and running a shop, but also because "it is in the rural areas that people still invest their surplus cash in jewellery", as Roychoudhury points out.

Also, with franchisees sharing in the cost and the profit, much of the risk is covered. Besides, as a result of the state government's move to drive economic activity to the districts, many of these towns are flush with new wealth.

No wonder, these smaller towns of the east are grabbing the attention of the national players. Gitanjali Gems, which is rolling out a national chain of stores, opened a World of D'damas store in February last year and next month, there'll be another in Durgapur.

Manjunath Jyothinagar, president, jewellery business, Gitanjali Gems, says sales are growing in smaller towns at 30-40 per cent, compared to 25 per cent in the cities.

For jewellery-retailers, it seems, small is truly beautiful.