Bengaluru: Titan Co Ltd said 2017-18 proved to be a satisfactory year in terms of overall business performance, particularly in its watches and jewellery businesses which scaled new heights in terms of revenue and profitability.
But underperformance in the sunglasses business, which has been impacted ever since the implementation of the goods and services tax (GST), is expected to out under pressure profitability in the eyewear business to a great extent, the company said in a filing with the BSE on Friday.
Sales in the company’s jewellery business, its largest revenue earner, were propped up by Titan’s marketing activations in the diamond space and a more ‘customer-friendly revised gold exchange policy’ during the January-March quarter.
Titan’s jewellery division sells its products mainly through its Tanishq brand of retail outlets. The business division had laid out a strategy of growing to 2.5x of its 2016-17 revenue over 5 years, Titan said.
A strong push in the wedding and high-value diamond studded jewellery segments, market share gain in key markets with low share, expansion of its Golden Harvest Scheme and retail network expansion will help the company achieve this strategy, it said.
2017-18 was the first year in its 2.5x journey and all levers for growth have performed well, according to Titan.
It opened 46 new Tanishq stores last year, including 22 Gold Plus stores that were converted to Tanishq stores. Last January, the company said it was merging its Gold Plus retail jewellery brand of stores into its flagship Tanishq retail network.
Gold Plus was launched in 2005 and targeted small towns in South India and in January 2017, when the company announced consolidation plans, it had 30 of these stores across Andhra Pradesh, Telangana, Tamil Nadu, Karnataka and Maharashtra.
The process of conversion of Gold Plus stores into Tanishq will conclude by the end of the next quarter, Titan said on Friday.
Titan also opened 24 new CaratLane stores in 2017-18, taking the total count to 36. CaratLane, an digital jeweller, became a subsidiary of Titan after the latter acquired a majority stake in Carat Lane Trading Pvt. Ltd in 2016.
The company’s watches division had a strong January-March quarter on growth in multi-brand retail formats as well as sales from the e-commerce channel, with the latter now contributing about 10% of the division’s sales. A plethora of products are likely to be launched in the tech-enhanced watches space in the coming financial year, Titan added.
Under watches, the company sells its products through various retail brands and opened 53 new stores during 2017-18.
Although the government reduced the GST rate on sunglasses to 12% from 18% during the October-December quarter, the sunglasses business continued to underperform, Titan had said in January. It attributed the underperformance of distributors and dealers, remaining wary about stocking the category due to changes in the GST rate.
On Friday, the company said its sunglasses business continued to remain under pressure while the health of its prescription eyewear business continues to improve.