CaratLane looking to make a profit by FY20; eyes ₹300-cr turnover this fiscal

Abhishek Law Kolkata | Updated on January 09, 2018

E-tailer still in ‘investment mode’; banking on offline model to shore up revenues

Online jewellery retailer CaratLane is looking to turn profitable by FY20 even as it focuses on expanding its omni-channel presence.

According to Atul Sinha, Senior Vice-President, Marketing and Retail Sales, CaratLane will be EBITDA positive (earnings before interest, tax, depreciation and amoritsation) in two years.

It is already profitable at an operational level.

“We have achieved operational profitability some years back. But, we are still in investment mode. We hope to be EBITDA positive in another two years’ time,” he told BusinessLine during an interview.

In terms of turnover, the e-tailer is eyeing ₹300 crore for this fiscal (FY-18); a 62 per cent jump over the ₹185-crore it reported in FY-17.

Offline presence

By FY-19, CaratLane should be a ₹500-crore business (in terms of turnover) with a stronger omni-channel presence (both brick and mortar stores and e-tailing).

With Titan acquiring a majority stake of 62 per cent and stores adding “a Tanishq partnership” as a part of its communication strategy, CaratLane is now banking on the offline model to shore up revenues.

Majority of its stores are already profitable, and according to Sinha, each store generally breaks even in the second year of operation.

The e-tailer, which had 14 stores nationally last fiscal, will near treble the count to 38 by the end of this fiscal. Its store count, including a recent inauguration at Kolkata, currently stands at 32.

Stores – approximately 700 sq ft – will continue to be a mix of franchise and company-owned ones.

For the next phase growth, CaratLane will focus on tier-II cities that include Guwahati, Ranchi, Patna and so on. Some of the tier-II cities that it already has a presence include Chandigarh, Pune, Dehradun, Lucknow, Indore, etc.

Omni-channel focus

At present, a little over 50 per cent of its revenue comes from the offline channel and this number is expected to go up. But, for the company, online continues to be a great influencer.

Nearly, 80 per cent of the people walking into a CaratLane store has already chosen a design online or done his research online.

As Sinha explains, the idea of taking up an omni-channel strategy was to make people more comfortable with the concept of buying online.

So naturally, CaratLane’s online offering showcases close to 7,000 pieces against 1,000-odd in case of the stores.

“Nearly, 90 per cent of our business is influenced by our presence online,” he said.

Published on January 09, 2018

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