Kalyan Jewellers plans S E Asia foray in next fiscal

Unveils Rs 1800 cr expansion, to consolidate presence in West Asia

Kalyan Jewellers, a leading jewellery manufacturer and distributor, is planning to foray into the South East Asia market by the next fiscal while looking to consolidate its presence in the domestic market as well as West Asia where it already has a sizeable footprint.

The jewellery maker has lined up Rs 1800 crore expansion plan to expand into new cities in the country and globally by 2016-17. "We are on track with our expansion plans and look forward to open 100 showrooms by the end of this fiscal. The next fiscal, we are looking to expand to other parts of South East Asia", T S Kalyanaraman, chairman and managing director (CMD), Kalyan Jewellers told Business Standard in e-mail response.

The branded jewellery retailer is looking to add 22 more showrooms this fiscal, thereby taking its network to 100. On June 5, it will open its showroom in Bhubaneswar spread over 15000 sq ft, the biggest in Odisha and its first in eastern India. The jeweller had a grand beginning this fiscal with the launch of 40,000 sq ft showroom in Chennai- the largest luxury jewellery showroom in the world.

"After Bhubaneswar, we are planning to concentrate on West Asia. We will open at Al Nahda in Dubai and are looking at a multiple showroom launch in Qatar in September. At the end of this year, we will consolidate our presence in east India with a launch in Kolkata", said Kalyanaraman.

Last year, Kerala-based Kalyan Jewellers had divested a small stake for Rs 1,200 crore to global private equity firm Warburg Pincus. The proceeds will be used to fund the Rs 1800 crore expansion plan. The balance Rs 600 crore would come from internal accruals and debt. Kalyan Jewellers closed 2014-15 with a total revenue of Rs 10,000 crore. In 2015-16, it has targeted a topline growth of 30 per cent to reach a turnover of Rs 13,000 crore.

"With the augmented ramp up in retail presence, we have accelerated and optimized the output from our three manufacturing facilities spread across Kerala, Tamil Nadu and UAE. This will ensure effective calibration between the rise in presence and fulfilment of customer demand", the CMD says.

Known for its strong focus on brand positioning, Kalyan Jewellers has roped in celebrities Amitabh Bachchan and Aishwarya Rai as its national brand ambassadors. "We usually spend around one to two per cent of our top-line revenues on marketing. This year, our marketing budget is approximately Rs 200 crore", he said. Moreover, with the e-commerce sales platform gaining traction, Kalyan Jewellers is looking to tap the online channel but plans have not been firmed up yet.

Kalyanaraman declined to comment on his company's market share in the branded jewellery segment. "According to estimates, the gold jewellery market is worth Rs 240,000 crore and the organised players account for only 22 per cent of this. It will be tough to comment on our market share."

He sees no impact on business due to softening gold prices lately. India's consumer gold market is good due to positive sentiment and the shift from unorganized sector to the organized sector, he argued.

Beyond gold, Kalyan Jewellers is aiming to tap the real estate market, banking on the trust that it has built with its transparency and ethics in jewellery business. The real estate projects will be taken up by a separate company called Kalyan Developers.

"The first residential project is coming up in Thrissur, from where we started our journey. Kalyan Developers plans to launch projects in other cities such as Calicut, Trivandrum, Kochi, Coimbatore, Chennai and Bangalore in the near future", said Kalyanaraman.