The Hindu Business Line : All that glitters could be imitation jewellery

“Sales in January and February shot up sharply after the gold prices touched a new high. We expect our sales to touch Rs 50 crore by end of this fiscal year.”

Suresh P. Iyengar

Mumbai, March 12 All that glitters is not gold. Your neighbour may be flaunting painstakingly designed jewellery that may bowl you over. But, look twice, for all you know it may be artificial jewellery made to perfection.

With the skyrocketing gold prices, not only the middle-class even the more affluent find it more affordable to embrace artificial or imitation jewellery for their regular evening wear or that occasional wedding ceremonies.

Huge potential

Mr Jatin Chhadva, Chief Executive Officer, SIA Lifestyles, said there is a huge potential in the artificial jewellery segment in India as it is highly unorganised and there are very few players who have presence across the States.

“The market for artificial jewellery is worth Rs 2,500 crore, according to the recent study conducted for us by a market research firm,” he said.

SIA Lifestyle seems to have jewellery for every occasion including evening wear, wedding wear, casual wear, office wear and just accessories. Prices ranges from Rs 200 to Rs 20,000 with the wedding jewellery set costing the most. Almost all the jewellery designed by the company are hand-made.

Gold prices, which were trading on a bullish note, had touched a historic high of Rs 16,000 for 10 gm in February and has since fallen to Rs 15,400-level.

However, with the financial crisis in the US still unfolding even after the bailout package announced by the Government and global economy crumbling, analysts feel that gold may touch the Rs 16,500-mark in the coming months. This bodes well for the imitation jewellery makers.

Franchise route

Buoyed by the encouraging response after the recent spike in gold prices, the Mumbai-based SIA Lifestyle has plans to open outlets in Bangalore, Delhi and Pune. Currently, it has 21-owned and four franchise shops in 11 cities and employs 300 people. It is in talks with 45 potential investors for taking franchise in other cities.

The company targets to have 25,000 sq. ft of retail space in the next two years.

The company intends to adopt shop-in-shop model in the tier-II cities of Kolkata, Gujarat and Indore.

“We are also considering making our presence felt in gold-conscious southern states such as Hyderabad and Chennai in the near future,” said Mr Chhadva.

Given the economic slowdown and financial crunch, it is going to be a difficult task for the company to find a suitable investor to take up their franchise. “Though rentals have come down by 15 to 30 per cent, investors are little reluctant,” he said.

The company will soon invest Rs 10 crore in a manufacturing facility to feed the demand once the expansion plans go on stream.

It has set a sales target of Rs 100 crore for the next two years.

“Sales in January and February shot up sharply after the gold prices touched a new high. We expect our sales to touch Rs 50 crore by end of this fiscal year,” said Mr Chhadva.

The uniqueness of SIA is addressed by the twin factors of affordability and versatility, along with industry recognition as majority of Bollywood, fashion designers and TV soaps such as Jassi, Baa Bahoo, Resham Dankh, Nach Baliye, Maximum Style and movies like Devdas and Om Shanti Om endorse SIA in some way or the other, he said.

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