Gitanjali Gems’ 2nd Chinese acquisition in final phase

Gitanjali Gems, India’s largest jewellery retailer is in the final

phase of closing its second acquisition deal in China. The formal announcement is expected in the next 2-3 months. In December 2011, it acquired Hong-Kong-based jewellery manufacturing company Crown Aim. The company is aggressively penetrating the country eyeing its lucrative business propositions. The Indian retailer plans to expand in China, India and the US in the coming fiscal commencing on April 1, 2012. While the US accounts for 35 per cent of the total diamond jewellery market, China, Japan, India and the Middle East each account for 10 per cent of global demand.

Gitanjali retails diamond jewellery under the brands Gili, Nakshatra, Asmi and D`Damas in India. It also manufactures and wholesales gold and diamond jewellery, and has signed a sourcing pact worth $10 million with a consortium of diamond miners. The company, with a market value of $752.2 million, hopes to achieve a 45-50 per cent rise in profits in FY13, as it expects robust demand for its high-margin retail business, and sees a 30-35 per cent rise in sales.

It expects its same store sales, a key gauge of profitability for retailers, to rise 30 per cent in FY13, even as same store sales for other lifestyle retailers in India drop to single-digits due to sluggish consumer off-take. The company, which has completed restructuring its Indian operations, aims to finish restructuring its overseas operations by March.