Shree Ganesh to invest Rs 500 cr on retail expansion

Company plans to open 50 exclusive Gaja retail stores next fiscal

With jewellery consumption growing in spite of the persistently high gold prices, Shree Ganesh Jewellery House Limited (SGJHL), a Kolkata-based jewellery maker has decided to invest around Rs 500 crore towards retail expansion in the next fiscal.

The company aims to increase its retail presence from the existing about 10 exclusive showrooms located across India to 50 more such stores by 2013-14.

"Currently, about 85 per cent of our total revenues come from export business. But looking at India's robust gems and jewellery consumption, we are looking to invest around Rs 500 crore in the next fiscal. We plan to open about 50 new stores across the country," said Umesh Parekh, managing director, SGJHL.

Most of the funding requirement will be met through internal accruals, while a part will be raised through debt, told Parekh.

"In the current market conditions, interest rates are hurting the business," he said. The company has about Rs 3,000 crore debt on books at present.

The company sells gold and diamond jewellery under its brand, Gaja. Currently, it has exclusive showrooms in Mumbai, Bangalore, Kolkata, Ahmedabad, Rajkot, Ghaziabad, Gurgaon, Amritsar, Chandigarh, Ludhiana. It is likely to open stores in Pune, Mangalore and Siliguri soon.

Commenting on the prospects of festive sales, Parekh informed that festive sales would be lower this year as compared to last year. "But on quarterly basis, industry would see good growth in jewellery sales in the third quarter. As a company, we expect sales of around Rs 1000 crore during the three months of festivals," said Parekh.

The company has a topline of Rs 10,120 crore as on March 31, 2012 with net profit of Rs 461 crore for the fiscal 2011-12.