Mumbai: Jeweller Gitanjali Gems Ltd plans to add 300,000 square feet of retail space in India this year at a total investment of Rs300 crore, a top official told Reuters.
“Last year we added 300,000 square feet of retail space, which we have now finished. This year we are adding 300,000 sq feet more to further boost our retail presence,” managing director Mehul Choksi said in a interview on Tuesday.
The stores will range from 1,000 square feet to 25,000 square feet and will be on a revenue sharing model, he said.
Gitanjali, one of India’s largest jewellery houses, sells jewellery under the Gili, Nakshatra, Asmi and D’Damas brands in India.
“The expansion in India will be under our retail arm Gitanjali Lifestyle. Under this we will expand our Maya departmental stores , Maya jewellery stores, Bezel-our watch store, World of Silver and Gitanjali Gifts,” Choksi said.
The firm is also expanding in the west Asia by setting up five stores there and plans to invest Rs500 million in this fiscal on the launches.
“Until now we were marketing our brands through other retailers in the Middle Eastern markets, now we are planning to enter through independent stores,” he said.
Choksi expects revenues of Rs200 crore by 2012 from these outlets.
Gitanjali also sees its gold jewellery business rising 50% year-on-year in FY11 from 30-40% in FY10, boosted mainly by its huge retail expansion.
However, the firm does not see much of an upside in its diamond jewellery business because of high prices and expects it to grow at 15-20%, similar to last year.
Choksi sees a total revenue of Rs8,500 crore in FY11 from Rs6,530 crore a year ago.
The firm has kept its plans to expand in the US on hold.
“We are watching the whole situation very carefully. Our sales in the US are steady for the past months but we still want to wait and see for another one year, Choksi said.
The firm, which currently has one Special Economic Zone (SEZ) in Hyderabad, is seeing further delay in its plans to set up more such SEZs in the country, Choksi said.
“Our plans to set up SEZs is still on hold as the government is not decisive on the taxation policy which is very important,” Choksi said.
At 13.07pm, shares of the firm were up 0.4% at Rs125 in a weak Mumbai market.