National Jeweler Network

Financial Reporting

Gitanjali’s US stores post 12 percent growth

February 19, 2014

Mumbai--Indian jewelry retailer and manufacturer Gitanjali Gems Ltd., owner of Samuels Jewelers Inc., said its United States sales grew 12 percent year-over-year in the first nine months of fiscal year 2014.

The Mumbai-based company, which has seen sales and margins fall in India due to changes in the laws regarding gold imports, said it expects the sales growth in the U.S. to continue, and emphasized again its intention to focus on “high margin, mature markets,” including the U.S., Japan and the Middle East.

Gitanjali owns Austin, Texas-based Samuels Jewelers Inc., which operates Andrews, Rogers, Schubach and Samuels Diamonds stores. It has stores in a total of 21 states.

For the company as a whole, net sales for the nine month period ended Dec. 31 totaled $1.56 billion, down 17 percent from $1.89 billion in the prior-year period.

Net profit plummeted 74 percent while the profit after tax, or PAT, margin dropped from 4.1 percent in the first nine months of fiscal year 2013 to 1.3 percent in the first nine months of fiscal 2014.

“Post June 2013, with the regulatory changes for gold (in India) there has been an impact on the jewelry industry and especially the organized players,” Gitanjali Gems Chairman and Managing Director Mehul Choksi said. “Gitanjali is undergoing a transitional phase and is bringing about significant changes to its business model.”

The company said it is now increasing its diamond jewelry business because it has better margins than gold following changes to Indian law that prohibited any form of credit on gold imports for domestic consumption. Previously, gem and jewelry companies were able to obtain gold from banks with an upfront payment of 20 percent margin and had six months to finalize the gold commodity price.

Gitanjali also said it is increasing its international business in platinum, colored gemstones and silver.