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Titan Aims for Annual Sales of $3B

Company expects fiscal 2012 sales to reach $2 billion
Sep 20, 2011 2:16 AM   By Dilipp S Nag
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RAPAPORT... Titan Industries Ltd., a lifestyle and jewelry company owned by Tata Group, expects to achieve annual turnover of $3 billion by fiscal year 2014-2015 as it looks to expand.

''Plans are for aggressive growth in our existing business. We are exploring the footwear segment, but nothing is concrete yet,'' said Bhaskar Bhat, the managing director of Titan Industries, which operates nearly 700 retail stores.

The company sells its jewelry under Tanishq, Goldplus and Zoya brands, while its eyewear brands include Titan, Eye+ and Dash. It sells watches under the Titan, Xylys, Sonata and Fastrack brands and also has a precision engineering division.

Titan is planning to open one or two more stores selling its mass market jewelry retail brand, Goldplus, in this fiscal year that ends on March 31, 2012, Bhat said on the sidelines of a conference, after Tata Sons' chairman, Ratan Tata, unveiled the world’s first "gold jewelry" car that was crafted by Goldplus. The company currently has 30 Goldplus retail stores.

This past week, Muthoot Finance Ltd., a non-banking financing firm, and Goldplus entered into a partnership to finance and sell jewelry in the southern Indian state of Andhra Pradesh.

''We have covered pretty much  Tamil Nadu and Andhra Pradesh is the focus now,'' Bhat explained. He added that Titan is planning to spend about $50 million (INR 2.38 billion) on expansion in fiscal 2012 and the expenditure could be around the same level next year. 

Setting Up High-End Jewelry Manufacturing Unit

Bhat stated that the company is planning to set up a jewelry manufacturing facility in the northern Indian state of Uttarakhand in the next six months to make high- value-added jewelry, with an investment of $4.2 million ( INR 200 million).

“This is basically to help reduce excise duty,” he added. The company expects the new plant to help save $3.1 million to $4.2 million (INR 150 million to INR 200 million) annually from next year as Uttarakhand offers certain tax benefits to companies that set up their manufacturing facility in the state.

Titan is planning to increase the number of its eyewear retail stores to 250 from 180 currently by the end of fiscal 2012. It also plans to open two large-format Tanishq stores this year.

“We have 124 Tanishq stores. But the big focus is now on opening large format stores,” Bhat said. At present, the company has large-format stores in Mumbai, Pune and Chennai. It is planning to open large-format stores in Kolkata, Hyderabad and Lucknow.

Bhat said that the company is looking at aggressively expanding its multi brand outlet “Helios” to 40 stores by the end of March 2012, up from 13 stores currently.

Titan is also exploring opportunities to enter Indonesia in the next six months through a distribution partnership, Bhat stated. The company currently has a presence in 31 countries, he added.

Festive Season Sales Value Expected To Rise, But Volumes Might Fall

Bhat said that during the festive season, which runs from September to December, the company expects sales growth of about 25 to 30 percent.

''I think sales should be normal during Diwali season. High gold prices always affect volume, but consumers will come back as soon as the festive season starts,'' he added.

Due to higher prices people limit their purchases to the amount of money that they have, but they still buy gold in preference to many other goods as it is seen as an investment, Bhat explained. ''So there will be less volume but consumers would still buy gold. It is the most preferred category.''

He added that higher diamond prices have affected the sales of diamond jewelry and the growth is less as compared to last year.

Bhat stated the company expects fiscal 2012 sales to be around $2 billion (INR 90 billion), up from $1.39 billion (INR 65.90 billion) one year earlier.

Titan reported sales rose 62.5 percent year on year to $463.65 million (INR 20.48 billion) during its first-fiscal-quarter of 2012 that ended on June 30, 2011. The company attributed strong growth to improved sales across all its divisions and retail chains, mainly the jewelry business.

* Pictured: Bhaskar Bhat and Ratan Tata
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Tags: Bhaskar Bhat, Dilipp S Nag, Diwali, Goldplus, Muthoot Finance, Ratan Tata, Tanishq, Titan, Titan Industries
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