In a bid to cater to different buyer segments, Bangalore-based Rajesh Exports is planning an overhaul of its retail brand strategy for gold and diamond jewellery. After converting its ‘Laabh’ branded stores into its more popular ‘Shubh’ brand of retail stores, the company plans to re-launch the Laabh brand in a few months under the franchisee model.
Despite being the country’s largest manufacturer and exporter of jewellery, the company entered the domestic retail business only in 2007. It started with two retail brands; Shubh for gold jewellery and Laabh for diamond jewellery. The company has set up 15 Shubh stores and 12 Laabh showrooms across the country.
“We started pushing for Shubh, our gold jewellery brand owing to greater demand and decided to convert the Laabh stores into Shubh to increase its presence. However, once the markets show promise in a few months we will re-launch the Laabh brand as exclusive upmarket diamond jewellery stores,” said Rajesh Mehta, chairman of Rajesh Exports.
The Laabh brand was launched to cater to diamond buyers but the stores also stocked gold and other mainline jewellery. “Gold has traditionally been the preferred commodity in India due to its advantage as an investment. However, there are growing number of people who look at diamonds as a good sentimental buy. With branded jewellery seeing a lot of growth in recent times, the re-launched Laabh chain as un upmarket boutique would find favour with buyers,” said Mehta.
The company is also looking at tweaking its retail expansion strategy for its upcoming stores. So far the company set up its own stores in some places and took up the franchisee model for others. But all the stores to be launched from now on would be through the franchisee network. “We will concentrate on the franchisee model from now on, which makes it easier to develop a larger network of stores and comes with reduced financial risks,” said Mehta.
The current slump in the economy put the company on a conservative approach and all expansion plans were put on hold. But with a turnaround expected soon, plans are being chalked to set up nearly 450 to 500 Shubh gold jewellery stores and 150-200 Laabh exclusive diamond boutique stores in the next five years. Apart from the metro cities, the company will concentrate on the fast growing tier II cities for its next level of expansion.
The contribution to retail in the revenues of the company is insignificant right now, admitted Mehta but with the retail market for gems and jewellery in the country estimated to be about Rs One lakh crore, the firm is targeting an ambitious 15 per cent of this pie in the next 5-7 years. Rajesh Exports reported net sales of Rs 12,341.7 crore for 2008-09 where 94 per cent was accounted from exports and the rest from domestic sales.
