Gitanjali Gems recorded a US sales growth of 8.5 per cent to $30 million during the first three months of the current calendar year, despite a lacklustre performance in the global diamond jewellery market.
The integrated jewellery manufacturer and exporter owns two jewellery chains —Samuels and Rogers with over 130 retail stores across the country. It had recorded sales worth $27.65 million in the corresponding quarter last year. The company estimate for 2010 stands at $130 million.
The growth indicates a revival in consumer demand in the US despite a 10 per cent unemployment rate in the country. While the US constitutes 40 per cent of global jewellery consumption, it contributes about 13 per cent of Gitanjali’s total annual turnover.
“After a sharp drop during Christmas 2008, when the economic crisis was at its peak, we saw a bottoming out of the slowdown by the middle of the year and a gradual recovery towards the end of 2009, virtually bringing us on par with pre-crisis sales levels,” said Nehal Modi, CEO, Gitanjali USA.
Buoyed by strong sales on Valentine’s Day and an overall positive performance during the first quarter of 2010, Gitanjali is “cautiously optimistic” about the expectations for the rest of the year in the crucial US market.
Gitanjali Gems has also set a new retail model with exclusive jewellery stores that other retailers are considering to follow. Chairman of the company Mehul Choksi said, “Our style of exclusive jewellery shops has proved to be a role model in the US. Samuels and Rogers are the leading speciality jewellery retailers in the US.”
“Gradual recovery in overall consumer sentiment and exceptional performance by the management and sales teams are the main drivers for these positive results,” said Choksi.
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Choksi feels the vertically-integrated business model allows added inherent advantages over other similar chains and has enabled the company to control costs and source more efficiently. Moreover, many routine back-end operations and even a few special tasks are managed by the group’s central departments in India.
Now, Gitanjali Group is looking to further expand at the retail level both in the USA and other prominent diamond jewellery markets.
According to Choksi, innovations during new product launches over the last year have started showing positive results. “Bridal jewellery sales continue to be strong and stable. The introduction of new product ranges using alternative metals like sterling silver, increased offerings at entry level price points and targeted marketing campaigns are some of the steps that have helped sales to gain momentum.” Two brands - Passion Stone and Canadia Diamonds - have been particularly strong sellers.
“We continue to selectively open new stores and in the US our retail strategy is very clearly in growth mode. For us the difficult time has ended sooner than for many others,” said Modi.