Even in pandemic, big retail jewellers add new space to spruce up businesses

KOLKATA: The pandemic has not deterred big retail jewellers from adding new space to spruce up their businesses in the current fiscal. Retail jewellers like Tanishq, Malabar Gold & Diamonds, Senco Gold & Diamonds, besides others, are adding more retail space betting on a recovery in jewellery demand from the third quarter onwards.

Tanishq will add 35 stores, while Senco will add 20,000 square feet of retail space in FY21. Malabar is focusing more on rural areas as the jeweller feels that good rains and better kharif output will spur rural demand for gold.

The jewellers have also reworked the rentals for their outlets so that it is a win-win situation for all stakeholders.

Ajoy Chawla, CEO (jewellery division), Titan Company said tier 2 and tier 3 towns have been doing much better than metros and are recovering fast. ”While the risk of a second wave is real, jewellers expect there will be localised lockdowns at best and not a general strict lockdown seen in Q1, since India cannot afford more hits on the economy,” he said.

“For Tanishq, business recovery has been much better than expected, partly due to gold as a safe haven and also due to the safety measures put in place by the company at its stores and providing assisted remote shopping to customers,” said Chawla. ”

Tanishq’s retail expansion strategy of reaching out to middle India and convenient neighbourhood catchment stores has worked extremely well, especially at this time.

“Typically, we have been opening 40 new stores per year over the last two years and this year too we expect to open between 30 to 35 new stores, after a brief pause in the first quarter. So far we have added 13 new stores in the first half for FY21, most of them being spill overs from previous year plans. Naturally we will also keep a close watch on how the health situation evolves and course correct for any unexpected jolts,” Chawla said.

Senco Gold & Diamonds, a major player in eastern India, said in FY21 it intends to add 15000-20000 sq ft in regions where it is already present for consolidation and giving customers a better experience.

“The budget will be around Rs 5-7 crore in terms of fixed capital expense. Rentals were negotiated for initial phases of the lockdown period. Again, if strict lockdowns start, we might have to look at it. But otherwise, all stakeholder interests have to be looked into and talks have to be done with long term relationships in mind,” said Suvankar Sen, CEO, Senco Gold & Diamonds.

Ahammed MP, chairman, Malabar Gold & Diamonds, said a good monsoon and higher kharif crops will help revival of rural gold demand in the upcoming festive season. “At a time when more than 65 per cent demand for gold is generated by rural India, we’ll be continuing with our focus on tapping the growing rural market,” he said.

Courtesy: Economic Times