Titan Company Ltd., India’s biggest jewellery retailer with annual sales of over $2 billion, said the jewellery division’s first-quarter revenue growth was below internal expectations, as consumer demand fell in the month of June on the sudden surge in gold prices and a slowdown in consumption.
Titan’s jewellery division – comprising retail brands Zoya, Tanishq, Mia and CaratLane, which cater to the luxury and mid-market segments – recorded a sales growth of 13.3% to I4,047 crore in the first quarter that ended June 30th 2019, as against I3,572 crore last year. During this period, growth in the jewellery segment was adversely impacted by high gold prices, especially during the month of June 2019, Tanishq emphasised.
First quarter earnings before interest and taxes (EBIT) of the jewellery segment grew 12% year-on-year to I442 crore, while the EBIT margin was at 10.9%, similar to a year ago.
Bhaskar Bhat, managing director of Titan Company, stated, “The macro-economic environment coupled with lower consumption have impacted some of our businesses. The retail growth in jewellery was driven by encouraging performance in the studded as well as wedding jewellery segments. However, there has been a weak consumer sentiment prevailing across, especially in jewellery with additional factors like price volatility and Customs duty increase.
“The company is gearing up on all fronts across its portfolio of brands and businesses to stimulate demand in the coming quarter through innovative campaigns and new product launches.”
As announced earlier, Bhaskar Bhat will step down from his current position on October 1st this year. He will be succeeded by the current CEO of the jewellery division, C.K. Venkataraman.
The company informed that the ratio of studded jewellery was in line with the previous year, at 25%. In addition, customer deposits against the Golden Harvest scheme reached the regulatory limit, which is 25% of the company’s net worth.
In the first quarter, Tanishq launched the Swayahm collection consisting of plain and
studded jewellery, which was “well received by customers”. The company also “got a good response from customers” for its newly introduced Mia collections: Birthstone Pendant, Facets, and Florets.
Titan’s 69.5%-owned subsidiary CaratLane recorded revenue growth of 60% in the first
quarter, driven by strong growth in both offline and online channels, with offline channel witnessing better growth rate due to network expansion. “It (CaratLane) has been continuously narrowing its losses, moving towards the path of profitability in near future,” the company said.
Caratlane added eight stores to its network in the first quarter, taking the total count to 63 stores across 25 towns (48,000 sq ft). In the first quarter, Tanishq added 12 showrooms measuring a cumulative 34,000 sq ft, taking its total count to 299 stores. Tanishq has a presence across 178 towns, with a total retail floor space of 1.12mn sq ft.