Gitanjali focuses on US market, others for growth
Mumbai--Indian jewelry company Gitanjali Gems Ltd. is shifting its focus to markets outside of India due to the falling price of gold and recent changes in Indian law impacting imports of the metal.
The announcement came last Wednesday as Gitanjali released its financials for the first quarter of fiscal year 2014, ended June 30.
Net sales for the period reached $633.9 million as compared with $547.4 million in the prior-year period, a 16 percent year-over-year increase. International sales, including sales in the United States, rose 5 percent from $260.5 million to $272.1 million.
Gross margin increased from 14.3 percent to 15.5 percent but net profit decreased sharply, 76 percent, due to volatile currency and the steep decline in the gold price between October and May, Gitanjali said. The average price of gold in October was $1,747 per ounce, according to Kitco.com. By May, the average per-ounce price of gold had fallen to $1,413.
“With recent regulatory changes and the new RBI (Reserve Bank of India) guidelines impacting the gold jewelry sales of the company, the company has re-aligned its business model to focus on the high-margin diamond jewelry business, which is the company’s core competency, and also on segments like alternative metals and low-carat gold,” said Gitanjali Gems Chairman and Managing Director Mehul Choksi. “Going forward, the company also plans to strengthen its international presence and growth will come mainly from markets like the U.S., Middle East, Japan and China.”
Gitanjali, which operates Rogers, Samuels, Andrews and Schubach Jewelers as well as Samuels Diamonds in the U.S., said it will be expanding in international markets both “organically and inorganically,” with silver, platinum and precious gemstone jewelry.
Gitanjali’s operations in the United States recently underwent a change in leadership when Nehal Modi, part of the family that owns Gitanjali Gems, announced he was relinquishing his operational role to launch the Phantom Luxury Group LLC. He remains chairman of Gitanjali USA.