Kalyan Jewellers is planning to enter the franchise model in the first half of the next financial year to accelerate expansion, according to a top company executive.
Kalyan Jewellers is planning to enter the franchise model in the first half of the next financial year to accelerate expansion mainly in the non-southern India market, according to a top company executive.
“We decided to make a foray into the franchise model to accelerate our expansion. Till date, all stores of Kalyan Jewellers are owned by us. Our initial plan to enter the franchise model of expansion was from 2025.
“However, looking at the kind of momentum and accelerated demand that we saw for the past 3-4 quarters, we have decided to enter into this model of expansion with a pilot of 2-3 stores in the first half of next fiscal,” Kalyan Jewellers India Executive Director Ramesh Kalyanaraman told PTI.
After the evaluation of the performance of the pilot, the company will expand through the franchise route, which will be in addition to the usual opening of the Kalyan Jewellers-owned stores every year, he further added.
“In the franchise model, the cost per store will be around Rs 20 crore, a majority of which will be inventory and the capex (capital expenditure) will be minimal. A majority of our expansion for the next 2-3 years will be on non-south (India) markets.
“In the south, we will continue to expand but it will be minimal as we are already present in almost all tier I, II and III cities,” Kalyanaraman added.
The company usually opens 12-15 showrooms every year with a capex of Rs 30 crore per store, he said adding that by the end of FY22, Kalyan Jewellers will have additional 15 showrooms funded through inter accruals.
Currently, the company has 151 company-owned showrooms in 21 states and four countries in the Middle East. Of this, 121 are in India and 30 are in the Middle East.
The Middle East region contributed 15 per cent to the company’s overall consolidated revenue.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.