New buys to enhance shop-in-shops presence: Gitanjali Gems

Gitanjali Gems has acquired two jewellery brands — Nirvana and Viola. In an interview to CNBC-TV18, Abhishek Gupta, president, Gitanjali Gems says Nirvana is a 15-year old brand having access to almost 106 shop-in-shops. "Viola has got an access to 60 shop-in-shops," he adds.

According to him, the acquisitions will not only enhance its shop-in-shops presence or model return presence, but also will give the company a change or additional brands portfolio for converting from product brand to retail brand. Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Gautam Broker. Q: How much did you pay? How much might it increase your sales in the last quarter of the current year? A: Nirvana is a 15-year old brand having access to almost 106 shop-in-shops. Viola has got an access to 60 shop-in-shops. This will not only enhance our shop-in-shops presence or model return presence, but also it will give us a change or additional brands portfolio for converting from product brand to retail brand. So, we are looking to expand them into franchise stores. Q: How much did you pay for them? What are their current monthly, quarterly or yearly sales? A: We have not disclosed the acquisition amount. But both the brands put together have been done close to Rs 35 crore of sales last year. This was purely diamond jewellery purely in shop-in-shops. Q: There were some reports that the festive season has been pretty decent for jewellery companies. Would you agree with that assessment? A: Festive season was very close to marriage season as well. We did see customers having multiple reasons to come out and buy jewellery in the market. We have very strong marriage season this year, which is still ongoing. We are expecting January-February good for marriage season as well. Q: Your Q3 year-on-year (YoY) sales could be how much? Is it 30 percent higher, 40-50 percent? A: The number will be in this range. Q: In 50 percent range? A: No, below around 30 percent range. Q: Any more acquisitions on the anvil? A: We have been passive acquirers. We have not actively given mandates, but any interesting brand, which comes to us, we will have a look at it. Q: What about capex plans, your own retail expansions jewellery shops that you are planning to open? A: Jewellery shops are intact. We are more focused on expanding through franchise route. That is a win-win for both, franchise partner as well as for the company and gives us a geographical expansion in hinterlands of the country. Q: Your yearly growth should be 30 percent, if I have to compare FY13 to FY12, right? A: It is a bit early to say, but in the last three years, CAGR has been 38 percent.