Normak Fashions plans to enter real gold, silver jewellery market

Hyderabad-based Normak Fashions Private Limited, manufacturers of the Estelle brand of imitation and costume jewellery, is planning to enter the real gold and silver jewellery market. The company is also looking at expanding its presence in the B-cities across the country.

Speaking to Business Standard, Mathew Cherian, general manager (marketing) of Normak Fashions Private Limited, said, "At present, we are studying the market conditions for our foray into the real gold and silver jewellery market."

He, however, hinted at the possibility that the company may first launch its silver jewellery range in the next one year.

The company has recently forayed into the real jewellery segment with the launch of its pearl line, O'pearlence. "The company is entering the real jewellery market mainly due to the high excise duty incidence on the imitation jewellery sector," he said. The excise duty on imitation jewellery has gone up from 4 per cent in 2002 to 16 per cent at present.

"We have little option but to absorb it into our costs. Branded costume jewellery becomes unattractive to customers if the gap between imitation and real becomes narrow," Cherian said.

The price range of O'pearlence is between Rs 100 and Rs 8,000. Cherian said that the fresh water pearls are being imported and the jewellery is being manufactured at the company's unit on the outskirts of the city. "The jewellery range's designs would also be made according to the customers' specifications," he said.

The Estelle range, priced between Rs 50 and Rs 5,000, has a 40 per cent market share in the organised costume jewellery industry, which is estimated to be around Rs 120 crore. Normak Fashions has two units "� a 100 per cent export oriented unit and another facility to cater to the domestic market. It manufactures costume jewellery for collaborator Normak Fashions Inc, Canada.

Estelle operates through a 35 outlet-strong chain and is also present in lifestyle stores across the country. According to Cherian, the company plans to concentrate on the second tier or B-cities across the country. "We would be opening around six stores during the current financial year in the B-cities across the country," he said.

The company has already opened one store each at Visakhapatnam and Pune. "We are planning to open stores in Bhopal and Indore by mid October and later strengthen our network in Punjab by opening stores in all the five major towns there," Cherian said.

The company is also looking at outlets in malls that are coming up across the country. It also plans to expand its dealer base from the current 150 by around 50 during the current fiscal. "We are also looking at opening stores in Rajasthan, Uttar Pradesh, Jharkhand and Uttaranchal," he said.

For the financial year ended March 31, 2004, the turnover of the company was Rs 14 crore out of which Rs 8.7 crore was from exports. Normak Fashions expects its turnover to grow by around 25 per cent during the current fiscal.