Date:20/11/2007 URL: http://www.thehindubusinessline.com/2007/11/20/stories/2007112051870500.htm

Back Gitanjali Gems buys US jewellery chain Rogers for $20 m

Plans to source raw material for the outlets from here

— Shashi Ashiwal

Mr G.K. Nair, Executive Director, Gitanjali Gems, at a press conference in Mumbai on Monday.

Our Bureau

Mumbai, Nov. 19 Gitanjali Gems Ltd has acquired US-based jewellery retail chain Rogers for $20 million. “The acquisition will be funded through internal accruals and another $20 million will be pumped in the next 12-18 months to double the total number of outlets in US to 300,” said Mr G.K. Nair, Executive Director, Gitanjali Gems.

Privately-owned Rogers, which operates through ‘Rogers Jewelers’ and ‘Andrews Jewelers’ brands, has recorded revenues of $80 million. It has 46 outlets.

Mr Mehul Choski, Chairman, Gitanjali Group, said, “A robust retail network is the lifeline to connect with the end consumer, completing the whole supply chain.”

“At present, we are looking to integrate operations of both the US companies to achieve economy of scale. How to financially structure them needs to be worked,” Mr Nair said.

Material sourcing

Apart from moving high-cost jobs, Gitanjali plans to source raw material for the US operation from India. “This will help us improve the profit margin of Rogers, which is at about 6.7 per cent,” he said.

Last December, the company bought US-based Rs 450-crore jewellery chain Samuels. Samuels has 100 stores in the US, with sales of Rs 500 crore, and a back-end capacity for 150 new stores.

US commands a 50 per cent share of the total global market, while India and China together have 20-25 per cent. “Our next target is entering the Chinese markets. We may takeover or seek joint venture with a Chinese company,” Mr Nair said.

Gitanjali owns jewellery brands such as Gili, Nakshatra and Asmi.

The company plans to shift operations from Mumbai to Hyderabad where its new SEZ, exclusively for gem and jewellery, is coming up on 200 acres.

“The SEZ will be opened up in the next nine months and we will have six factories spread over 5 lakh sq ft,” Mr Nair said. The company may sell or lease-out its property in Borivali and SEEPZ properties.

On Monday, stock of Gitanjali gained 3.36 per cent to Rs 388 after touching a high of Rs 394 on the BSE.