Apr 09, 2018

Titan Reports Satisfactory FY 2017-18; Jewellery Division Sees Good Sales Growth

Titan Company Limited in its quarterly update said that FY 17-18  “was a very satisfactory year in terms of overall business performance”.

While Titan reported “excellent retail growth” in all businesses, it was the watches and jewellery businesses which “scaled new heights”; with increases both, in terms of revenue and profitability.  The Company put this down to an increase in market share by  both businesses; coupled with its cost control initiatives.

“The Company successfully and seamlessly underwent GST transition in all its businesses without a single day's loss of revenue in any retail format,” Titan underlined.

“Regulatory developments like GST implementation, continuous drive against unaccounted wealth and the more recent developments related to the credit situation of the jewellers, will pose serious challenges for the jewellery industry in India,” Titan elaborated. “The same situations will prove to be tail winds for organised corporate jewellers like Titan Company with strong balance sheets.”

The Company has a vibrant presence through its various community development initiatives, which are focussed on education for the  girl child, skill development, supporting and protecting Indian arts and heritage among others. Through its various activities on these fronts, the Company has directly impacted the lives of about 360,000 people in the last financial year.

The good increase in the sales of the jewellery division Q4 FY 17-18 came on the back of a very successful diamond jewellery activation and a more customer friendly revised gold exchange policy, the Company noted. “The retail sales growth for the quarter was in mid-teens for the division,” Titan disclosed.

Going further, Titan said  its jewellery division “had laid out a strategy for growing to 2.5x of the FY 16-17 revenues, over 5 years”. This, the Company hopes to achieve by maintaining a  strong presence in the wedding jewellery and high value diamond studded jewellery segments; together with increasing its market share in key markets where it currently has  low market share; expansion of its Golden Harvest Scheme; and with an overall network expansion.

“FY 17-18 was the first year in the 2.5x journey and all the levers for growth have yielded excellent results,” the Company stated. “The division has also benefitted immensely from the expansion of its Gold Exchange Program which has, along with weddings, contributed significantly to new customer addition and average ticket size expansion. The division has set itself a great trajectory of retail and same store growth for the year for achieving its 5 year revenue target.”

Titan’s jewellery division, embodied in its retail brand Tanishq, has added 46 new  stores in FY 17-18; including  22 Gold Plus stores which have been converted so far. The net space addition for the division was around 67k square feet. “Out of the 29 erstwhile Gold Plus stores, 2 have been permanently closed and the rest are in various stages of conversion,” Titan clarified of its Gold Plus format, which has been shut down. The  process is expected to be concluded by the end of next quarter.   

Titan's subsidiary Caratlane, which was set up as a digital omni channel jewellery retailer,  also recorded excellent sales and gross margin growth in the last financial year. “Caratlane added 24 stores to its network in the last financial year, taking the total to 36,” Titan said.

The watches division too, witnessed  a strong performance in Q4 2017-18. This was a result of   good retail growth “especially in the multi-brand retail formats as well as e-commerce”, Titan divulged.

“In the last financial year, the e-commerce channel has grown disproportionately and is contributing to about 10% of the division's sales,” Titan noted. “For FY 17-18, the division is targeting decent sales growth and good improvement in the overall profitability of the business as a result of rationalisation of discounts as well as other cost control initiatives.”

The division launched a number of new products in Q4 2017-18 and Titan said more product launches of “tech enhanced” products were on the anvil in the coming year.

“The watches division added 53 new stores and 18k square feet of retail space this year, comprising of 18 WOT, 13 Fastrack stores and 22 Helios stores,” Titan said.

While the overall eye wear business “had decent retail growth in Q4 as well as YTD FY 17-18,” Titan said the  sunglasses business “continues to face challenges that started with the GST regime”.

Titan continues to nurture new businesses like its fragrance  division.