Rajesh Exports earmarks Rs 6,500 cr for retail expansion

Mumbai, Feb 20 (PTI) Leading gold jewellery-maker andexporter Rajesh Exports has earmarked Rs 6,500 crore for itsforay into retail to set up a 550-store network pan-India overthe next three years, a top company official has said.

"We have already launched our retail operations underthe brand-name Shubh Jewellers. We are now scaling-up ouroperations and plan a 550 strong store-network at aninvestment of Rs 6,500 crore in the next three years," RajeshExports Chairman Rajesh Mehta told PTI here.

The company currently has 29 Shubh Jewellers outlets.

Funding the expansion will pose no problem, he said.

"We propose to raise Rs 2,500 crore through ECBs and Rs 1,500crore via term loans. Internal accruals will account foranother Rs 1,500 crore. Over the next three years, we willpump-in another Rs 1,500 crore from internal accruals."

Share from retail to the firm''s total revenue willrise sharply from the present 5 per cent to around 55-60 percent by FY 16, Mehta said. "We expect Rs 1,000-crore revenuefrom retail in FY 11 - this should rise to around Rs 25,000crore in FY 16," he said.

"By then, our turnover should be in the range of Rs45,000 crore and our profit at around Rs 2,000 crore."

Demand for gold jewellery is expected to grow robustlyin India and the company has "mastery" over manufacturing anddistribution, he said, adding "our business model is alsounique ."

By adopting the "associate model" wherein the companywill associate with existing jewellers, it hopes to kick-startand maintain the momentum of its growth. (more) PTI JJ RSY

Under the model, Rajesh Exports will take over existing jewellery shops, put in its inventory and implementits processes and systems under the Shubh Jewellers brand. Theoriginal shopkeeper will get a commission and manage the storebut with the Shubh systems in place.

"We have already got 1,900 applications from acrossthe country," Mehta said.