Senco eyes South for gold store expansion

Kolkata-based jewellery giant Senco Gold and Diamonds is planning a pan-India push, with  priority expansion in South India, an initiative that takes it beyond its eastern bastion.

Senco, which has mostly had East India-focused operations, is now planning to expand across India according to a hub-and-spoke model, by turning large cities in different regions as hubs.

The 77-year-old company integrated a franchise route towards expansion post-2000, which enabled it to expand to around 70 stores, in Kolkata, Delhi, Bengaluru, Mumbai, Lucknow, Patna and Bhubaneswar, among others. Of this,  35 stores are franchisee-run.

“Our onward journey will now take us towards opening 100 stores from the current 70 in the next 2-3 years, out of the which eight stores will come up in South India, beginning with Bengaluru, then moving to Hyderabad, Vijayawada, Chennai, and Kochi, among others. South India amounts for over 40 per cent of gold consumption in the country, and we are bullish on the region,” Senco Gold and Diamonds Executive Director Suvankar Sen told Deccan Herald.

Senco sees Bengaluru as a potential hub, and within a span of four months, has already established its third outlet here. “Bengaluru, one of the most growing cities in India, is a destination for FMCG product trials and new experiences,” Sen said.

The company will be setting up large format (5,000-7,000 sq ft, multi-storied), and regular format (2,000 sq ft) high street jewellery stores, where it hopes to strike ‘gold’ owing to new designs, culturally-specific collections, and traditional and modern handcrafted ornaments.

Investments planned

To realise its plans, Senco has set aside a capex of Rs 220 crore, of which Rs 80 crore private equity funding has been received from Saif Partners, while Rs 140 crore has been put aside through debt and internal accruals, out of which Rs 30 crore is already invested.
“We are aiming for a turnover of Rs 2,000 crore over the next 2-3 years, from the current Rs 1,400 crore. In the last few years, we have consistently enjoyed around 18-20 per cent CAGR,” he added.

The company earns around 70-80 per cent of its revenues from gold jewellery sales, while 10-15 per cent is derived from diamonds, and the remainder from silver and platinum. Besides, around 15 per cent of its current turnover was earned from exports to Dubai, Singapore, Malaysia, the US, and the UK.