New-look Malabar Gold targets $6 bn turnover by 2015

March 25th, 2012 - 7:50 pm ICT by IANS  

Dubai, March 25 (IANS) Aiming to be third largest jewellery retail chain in the world with a $6 billion turnover by 2015, Kerala-based Malabar Gold & Diamonds (formerly Malabar Gold) plans to expand its retail footprint across the world at a $700 million outlay and also increase its jewellery production units to 10 from the current four, said a top company official.

As a part of the expansion game plan, the group has come out with a new name, brand logo and a tag line - “Celebrate the Beauty of Life” and will be positioned as the “Champions of Contemporary Tradition”.

Announcing the group’s expansion plan and the rebranding exercise, chairman M.P. Ahamed told reporters here: “Malabar Gold & Diamonds, in its endeavour to become the world’s leading retailer in value appreciating gift articles, is undergoing a brand transformation to blend with its future business vision.”

The group will be investing about $100 million to roll out more than 20 retail outlets in 2012 itself, thereby taking the number of stores to 84 from the current 64 spread across India and in the Middle East.

Malabar Gold & Diamonds has undergone a name change for the third time since 1993 when it was founded. It was first named Malabar Jewellery and later got changed to Malabar Gold and now Malabar Gold & Diamonds.

Malabar Gold & Diamonds had hired Brand Union part of the WPP group for the rebranding exercise after evaluating nine companies.

“The group sales is around Rs.12,000 crore ($2.4 billion). In India we will be opening outlets in Maharashtra, Gujarat, West Bengal, Madhya Pradesh, Uttar Pradesh and other states,” said group executive director K.P.Abdul Salam.

According to him, the group will also open outlets in Malaysia, Indonesia, Bangladesh, Europe, US and Canada.

It has also tied up with Indian Institute of Management-Kozhikode for building the needed human resources.

The group’s advisor, Tiny Philip, chief executive of Results Consulting Group, said: “Malabar Gold & Diamonds group has grown at 60 percent between 2002 and 2012. All the overseas markets will also turn towards ‘value for money’ concept and the jewellery retail company would like to be the first mover.”

To a query as to group’s accelerated growth plans instead of consolidating the growth achieved between 2002-1012, Philip said: “For other companies depend on debt for expansion, consolidation of operations has to be there. But for Malabar Gold & Diamonds which is mainly dependent on equity investments, the issue of consolidation does not apply.”

According to Salam, the group is not changing its business model even in the US and other western markets.

Malabar Gold & Diamonds follows a hybrid version of franchisee model. The company takes minor stakes in the franchisee outlets and also attracts investments from several silent investors in the outlets. It supplies the jewellery to the outlets and also have strict control over other systems.

“In the US and Canadian markets we will look for Non-Resident Indians (NRI) to invest in our stores,” Salam said.

Philip does not foresee the Kerala-based jewellery chain failing in the US and Canadian markets like some other Indian companies that opened outlets there.

“We will study the market there and have appropriate stocks,” he said.

(Venkatachari Jagannathan can be contacted at v.jagannathan@ians.in)

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