Organised jewellery major Malabar Gold & Diamonds has earmarked Rs 2,500 crore as investment into a retail expansion drive in India this fiscal, which is its largest such, coming at a time when jewellery retailers are capitalising on the formalisation trend in the market, a top official told FE.
The company, which achieved a consolidated turnover of Rs 51,218 crore in FY24, a year-on-year growth of 20%, is also beefing up its manufacturing facilities in the country, expanding its Hyderabad facility into a large production centre.
The firm has eight manufacturing units in India, where it produces gold and diamond jewellery for the domestic market.
In a conversation with FE, MP Ahammed, chairman of the Malabar Group, said that the firm would be setting up around 55-60 stores in India in FY25, targeting mainly the north, west, central and eastern parts of India.
The retail expansion planned this year is nearly double the number of stores added in FY24 in India, when 32 Malabar Gold & Diamonds outlets were rolled out, Ahammed said.
“The domestic jewellery market is growing and there is clearly need for players who are trusted and reliable,” Ahammed said.
“We are mainly present in southern India and some parts of the west. The retail expansion will help us get into newer parts of the country and cater to retail demand there,” he added.
The Kerala-based firm counts Titan’s Tanishq, Kalyan Jewellers, Senco Gold and Diamonds and Joyalukkas, among others, as its rivals.
It currently has a total of 365 stores in the domestic and international markets, of which 260 stores are in India alone.
While players such as Titan, Kalyan, Senco and PN Gadgil are listed, Ahammed said that Malabar Gold had no immediate plans to tap the capital markets, since it was sufficiently funded through internal accruals, bank loans and strategic investors who’ve been with the group for some time.
Like most of its peers, Malabar Gold is also working on an omnichannel strategy, tapping the online channel more aggressively and looking to integrate it with its offline stores for a seamless experience in India. Ahammed says that the tech backbone is being worked out for the omnichannel foray in the future.
He did not specify a timeline for the foray, adding that it would happen soon, given the growing trend of convenience in jewellery shopping.
Last month, rival Joyalukkas, which is also a Kerala-based jeweller, had told FE that it was working on a new online jewellery platform to tap into millennial and Gen Z consumers, a segment that is rapidly turning to light gold and diamond studded jewellery for their daily wear needs.
Like Malabar, Joyalukkas too is planning an aggressive retail expansion over the next three years in India, eyeing 60 stores mainly in the north and west of India. The move is aimed at increasing revenue from non-southern markets to 25% from 15% now, chairman Joy Alukkas told FE.