Shree Ganesh plans large-format stores

Demand slowdown, high gold prices and difficulties in importing the yellow metal have prompted Shree Ganesh Jewellery House, one of the country’s largest gold jewellers and exporters, to radically alter its retail strategy.

The Kolkata-based jeweller has closed down most of its 46 retail outlets and
plans to have only large well-decorated showrooms that would entice people to splurge on ornaments in times of slowdown and try out newer kind of lightweight gold jewellery.

“We have only five small outlets left out of about 46 we had. We would now go for showrooms of no less than 10,000 sq ft against the average size of 500-700 sq ft earlier. One such store is shortly opening in Ludhiana,” Nillesh Parrekh, chairman, Shree Ganesh Jewellery House (I) Ltd, told dna.

While the size of the showrooms turns larger, and investments in them become bigger, Shree Ganesh would be cautious in limiting its investments by following mostly the franchisee route, he said.

The company plans to create close to 200,000 sq ft of retail space, with 100,000 sq ft this year itself.

“The future in retail lies in larger stores especially in urban India. As jewellery retail has became increasingly popular, consumers are now demanding more and preferring larger stores with wider choice. This also helps in converting consumer intent to actual sales, an opportunity which was limited in smaller outlets.”

Efforts to build flashier and bigger outlets belies the tough challenges before the jewellery sector.

Recent government move to limit import of gold has dealt a body blow to the sector, Parrekh said.

Imports fell to just 2.5 tonne in August against 47.5 tonne in July.

Shree Ganesh, which exports to UAE, Singapore, and Hong Kong, imports about 70 tonne of gold a year.

“The situation is likely to continue till there is clarity on imports. We are being made to do with what is available within the country,” he said. Shree Ganesh, which has been seriously looking at getting into gold mining in order to secure supplies, is now thinking of deferring its plans.