Business Daily from THE HINDU group of publications
Tuesday, Jul 04, 2006
Business Daily from THE HINDU group of publications Tuesday, Jul 04, 2006 |
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Marketing
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Retailing Rajesh Exports close to deal with Wal-Mart for gold jewellery Swetha Kannan
Expansion plans As part of its retail strategy, it will acquire local jewellery shops in South India. Rajesh Exports is also looking to expand the OyzterBay retail network.
Bangalore , July 3 The Bangalore-based jewellery exporter Rajesh Exports has its hands full this year with international tie-ups, which include a deal with Wal-Mart, and an ambitious domestic retail project. According to a source, the company is set to sign a deal with US retail giant Wal-Mart for the supply of gold jewellery. The source, however, did not divulge further details. Recently, Mr Rajesh Mehta, Chairman, Rajesh Exports, had told Business Line that the company was looking at mergers and acquisitions both in the domestic and the international markets and tie-ups with players in Europe, the US and Far-East. Also on the radar is the company's much-awaited plan to roll out its chain of retail outlets across South India. This is expected to take off in six to seven months. As part of this retail strategy, Rajesh Exports will acquire local jewellery shops in South India, which will be rechristened `Shubh Jewellers'. The company hopes to open 100 stores on the same day. Although the exact date is not yet fixed, the company is looking at a launch sometime between December and January (before the Sankranti festival). The project entails an investment of Rs 450 crore. While Rs 100 crore will come from internal accruals, the remaining will come from a bank consortium consisting of Canara Bank, HSBC, SBI and UCO Bank. The company had received about 160 applications from jewellers for this project. About 75 per cent of the deal has been finalised, said Mr Venu Madhava Reddy, Director, Rajesh Exports. He added, "We will take over the entire inventory of these stores, while retaining the existing management and staff. We will train staff on sales and handling stock; we will also provide a sales commission of 3-4 per cent to the stores." The cities in which Shubh Jewellers will be present include Bangalore, Mysore, Mangalore, Hyderabad, Vijayawada, Visakhapatnam, Chennai, Madurai, Thiruvananthapuram and Kochi.
Retail network
Rajesh Exports is also looking to expand the OyzterBay retail network in the country from 36 outlets to 100 in three years at an investment of Rs 100 crore. The company recently took over the retail assets of OyzterBay, which will now undergo a brand image makeover. "OyzterBay so far has been seen as a fashion jewellery brand, more for the younger generation. We want to make it a mainstream jeweller supplying to all walks of life in all price ranges," said Mr Reddy. This retail venture is also expected to have a new name. Rajesh Exports, whose sales is primarily exports driven, wants to reduce its exports component gradually and focus more on retailing, as "margins are more in retail," said Mr Reddy. Currently, 95 per cent of the company's turnover comes from exports. The Rs 5,200-crore company is eyeing a revenue growth of 10 per cent this fiscal.
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