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Gitanjali Gems to buy US jewellery chain
By agencies
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Friday, 08 September 2006, 19:30 IST
MUMBAI: Gitanjali Gems has announced its proposal to buy US based jewellery retail chain in a bid to increases retail operations. The integrated diamond and jewellery manufactures are buying a series of 100 stores that would estimate to around $40 million. Announcing the deal, G K Nair, Director of Finance, Gitanjali Gems said that they were in advanced talks with a US jewellery retail chain and though he refrained from mentioning the name of the company, he did add that it was among the top ten in the U.S. with a turnover of $100 million. We expect to conclude the deal in two months.
In sync with the on-going growth strategies, the buy out is going to be financed through $23-25 million equity and rest through debt and internal accruals. Represented under current brands, Asni, Gili and Ginatti, Ddamas and Nakshatra and with 620 outlets at present, the company has also set sight on retail in China as well to increase total outlets to around 900.
Working on joint ventures, buy-outs or organic expansion, Industry analysts have marked U.S as a prime location where 55 percent of total jewellery sales are accounted for in diamonds and 50 percent of the global diamond jewellery sales.
Analysts say that though the opportunities in India lay galore, the jewellery market is not yet organized. This could be a reason why many jewellery companies are increasingly looking at venturing into overseas retail markets, especially the U.S. mainly because of the organized nature of the market there.