Rajesh Exports to sign pact with mega overseas chains
City-based jewellery maker Rajesh Exports will soon sign agreements with at least two-three mega retail chains overseas, a top company official said on Wednesday.
By PTI |
BANGALORE: City-based jewellery maker Rajesh Exports will soon sign agreements with at least two-three mega retail chains overseas, a top company official said on Wednesday.
"We are in active and advance stage of discussions with about four-five retail chains in the US, the UK and Australia. We are quite confident that we will be able to enter into agreement with at least 2-3 within three months", the Rs 5,200 crore company's Chairman Rajesh Mehta told media.
Company sources said one of the retail giants that the company is talking to is Wal-Mart but Mehta does not want to reveal any names, citing confidentiality clauses.
He said once the deals are struck, it would take three more months for the firm to commence shipping custom-made, requirement-specific jewellery for the retail chains, which would sell them under their brand.
"We are looking at a business of Rs 400 crore to Rs 500 crore from this business between six months and 18 months from now," he said.
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"We are looking at a profit margin in the range of 15 to 22 per cent (in this business). Because we are competing directly against Turkey, Italy and other countries, so we have to keep our margins reasonably low." Mehta said the company, whose more than 90 per cent revenue comes from exports, would invest Rs 450 crore for its ambitious retail foray in the country in the next 12 months.
He said the company would establish 100 mainline jewellery stores in Kerala, Karnataka, Tamil Nadu and Andhra Pradesh under the brandname 'Shubh' with an investment of Rs 350 crore by March by acquiring local jewellery shops.
The retail assets of OyzterBay that the company acquired would be bifurcated into two, Mehta said, with 28 OyzterBay stores in up-market areas like Commercial Street here and Bandra in Mumbai being positioned for up-market clients.
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These 28 stores would stop selling OyzterBay brands, with the company soon deciding on a new brand to be sold in these stores, which would be launched by August-end.The remaining around 30 OyzterBay stores would cater to the younger class, college students and teenagers with "small budgets" offering light-weight, fashionable gold and diamond jewellery. The company would invest Rs 100 crore on these two initiatives.
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The number of both these two separate division stores would be raised to 100 each over the next two years. "So, we will have 300 stores in the next 24 months," he said.With its increased focus on India, the company expects domestic sales, including retail, to contribute 75 to 80 per cent of its annual revenues in the next six-seven years, Mehta added.
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