India-based Kalyan Jewellers plans to invest up to Dhs440 million in the GCC region this year, to open up to 12 new stores in the region, Executive Director Ramesh Kalyanaraman has confirmed.
Kalyan, which currently runs 77 stores in India and the Middle East, also made an initial investment of Dhs440 million when it entered the GCC market in December 2013 with six stores in the UAE.
Speaking at an event on Monday, Kalyanaraman said that the gold retailer was seeing strong potential for growth.
The company has since opened three more stores in the UAE and three new outlets in Kuwait. It is now looking to expand even further in the Emirates, and also enter the Qatari and Saudi markets this year, he said.
“When we open each new store, we have a revenue target in mind. If it meets the target, then we plan the next store, but if the revenue is not up to our prediction, we don’t grow,” he told Gulf Business on the sidelines of the event.
“So our growth plan is parallel to our revenue expectation.”
Currently, the revenues from regional stores are exceeding expectations, Kalyanaraman said.
The UAE, particularly Dubai, has seen a steady rise in the demand for gold jewellery, and during the recently concluded Dubai Shopping Festival, the Dubai Gold and Jewellery Group reported a 25-30 per cent increase in gold sales within Emirates.
Despite gold prices increasing – up eight per cent so far in 2015 – mainly due to its safe haven appeal, jewellery sales are not expected to slow significantly, said Kalyanaraman.
He is also confident that demand will grow, especially for well-established brands.
“There is a huge shift that has taken place in the retail demand for gold and diamond jewellery in the region,” he explained.
“Four or five years ago, people just wanted to take some gold jewellery with them when they went back [to their home countries], but now they are brand conscious, design conscious and want an ambience when they shop. They know it’s not going to be cheap if they want these things, but they don’t get these requirements from a small jeweller.
“So branded jewellers, like us, are going to grow,” he added.