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Titan tones down expansion, trims costs to boost demand

CNBC-TV18's Farah Bookwala reports that Titan Industries is conducting restructuring operations across divisions and toning down expansion plans.

May 21, 2013 / 11:38 IST
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Jewellery-to-watches retailer Titan Industries is hurting. And to stop the pain, it is looking to trim the fat. CNBC-TV18's Farah Bookwala reports that the company is restructuring across divisions and toning down its expansion plans.

Also Read:  Titan plans 3 new plants, 1lk sq feet retail space in FY14


Titan has heard the alarm bells loud and clear — rising input costs, falling discretionary spending and higher taxes only results in lower demand. And that's why in FY13 it delivered its weakest revenue growth in four years.


But now, it's time for corrective action. And that's where its massive restructuring drive across key businesses of jewellery and watches, comes in.


Bhaskar Bhat, MD, Titan Industries says, “This year we are targetting very aggressive growth. And that is on the back of product innovation, promotion and a huge revamp of our retail presence.”


Aggressive, Yes. But overwhelming, No. Only 100,000 sqft of retail space will be added across divisions against last year's 45,000 sqft. Only 12 new Tanishq stores will come up, with no showroom exceeding 20,000 sqft.


It's mass market brand, Gold Plus, will be restricted to South India, with just 4-5 new stores being added. And luxury brand, Zoya will see no expansion. It's flagship watch division is also in for an overhaul.


Adds Bhaskar Bhat, “In watches, we'll be more calibrated in our approach. We will add where there is scope and profit. We are improving our focus on watches with new product categories as demand is being driven through innovation, not just advertising and distribution spreads.”


So don't be surprised if there are only 25 new World Of Titan showrooms this year. But it will set up three new manufacturing plants in Tamil Nadu at an investment of Rs 250 crore.


But despite these measures, some worries remain unabated, especially in the jewellery-retailing arm. The steady decline in gold prices remains a concern, as even higher volumes may not be able to hold up revenues beyond a point. And there, the company has its fingers crossed.

first published: May 20, 2013 11:09 pm

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