Dubai — Pure Gold Jewellers sees promising prospects for jewellery business ahead as low gold prices spurred sales last year, its top official says.
Karim Merchant, chief executive and managing director of Pure Gold Jewellers, said recent gold prices have a positive impact on gold jewellery sales as price is not a major concern for customers and they can buy whenever they need to, for example, during festivals, weddings and special occasions.
“The present gold prices have not affected Pure Gold’s diamond jewellery sales which form over 60 per cent of our sales,” Merchant told Khaleej Times at the inauguration of new outlet in Karama Centre.
The new store, costing Dh15 million, will feature Pure Gold Jewellers latest range of exquisite designs and jewellery in 22kt gold and diamond. About 70 per cent of new outlet’s space is allocated to showcase gold jewellery while the remaining 30 per cent is reserved for diamond.
Jewellery sales surge
Gold, which is often seen as an alternative investment to riskier assets such as equities, is currently hovering around $1,240 per ounce. The yellow metal has had a tough time for the past three years after hitting peak levels of near $2,000 an ounce in mid-2011.
“We exceeded our expectations and achieved double-digit growth in our business last year,” Merchant said.
To a question regarding an extraordinary demand for gold bars and coins in the wake of low prices, he said: “Yes, every time the market drops, we see a spurt in demand not only for coins and bars, but also for gold jewellery.”
Merchant was prompt to reply that lower prices are unable to dent profits despite higher sales because people now have an open opportunity to buy jewellery and gold at low competitive rates rather waiting for an occasion or festival to go for the purchase traditionally at higher rates.
“It should not be the case, as we experience higher top-line growth when gold prices dip,” Merchant said.
Pure Gold Jewellers, established in 1989, is one of the fastest-growing jewellery houses in the UAE, GCC and India. The group, which counts a jewellery and accessories line in its portfolio, has matured over the years with more than 125 stores across the Middle East and Asia. It also owns two factories in India, one in China and employs over 2,000 craftsmen and professionals.
It is also the only company in GCC and India to have the World Diamond Mark “D” certification. All Pure Gold Jewellers customers also have the unique opportunity to receive 70 per cent cash back on their diamond jewellery purchased at any time.
About the outlook for the precious metal in 2015, he said it is very difficult to predict the price trend for a precious commodity like gold.
“It is very difficult to predict, but I would assume gold prices to hover around $1,150 to $1,350, taking today’s external factors into consideration,” he said.
Merchant was upbeat about the outlook for gold and diamond jewellery in Dubai this year and said the business is bound to grow in line with positive indicators on the economic front and in international markets.
“I believe the demand for diamonds will continue to grow in especially depending on US economic recovery and continued growth from emerging markets, in particular China,” he said.
The young and energetic Pure Gold Jewellers’ chief executive further said the UAE has a strong infrastructure in place for diamond trading and with the continued support of the government the prospects for the industry are bright.
“I believe the industry will continue to grow. After a 28 per cent drop in prices in 2013, gold prices remain more affordable and this will help in the growth of gold sales especially during occasions and festivals when customers tend to splurge,” he added.
Expansion to continue
Merchant also highlighted Pure Gold Group’s expansion plan in the UAE and the region, and said the group is planning to inaugurate 25 more stores in 2015, taking the tally to 150-plus outlets by year-end.
He said Pure Gold Jewellers opened 10 new stores across the GCC in 2014 and it will continue to expand its presence in the Gulf region.
“We recently opened new stores in Lulu Mall in Fujairah, Sahara Centre in Sharjah and Madina Mall in Dubai. We are also now present in Dar Al Salaam in Doha and will open in Gulf Mall in Doha in two weeks,” he said. He said the group is also in process of opening new stores in the UAE at Dragon Mall in Dubai, Bawabat Al Sharq Mall in Abu Dhabi and Al Hamra Mall in Ras Al Khaimah.
“The UAE and Gulf markets are of strategic importance to us and we will continue to expand with the aim to be present in all important retail locations,” he said.
About the new openings in regional markets, he said the group will be strengthening its presence in GCC region by inaugurating new stores in Qatar, Oman and Kuwait in coming weeks.
“We have finalised a plan to set up two stores in Qatar [LuLu Gharafa and Gulf Mall], three in Oman [Garden Mall in Salala, The Wave Mall and Avenue Mall] and one in Kuwait [Boulvard Mall],” he said.
“We are always on the hunt for new markets and opportunities,” he said.
Apart from Pure Gold Jewellers, Merchant said the group also owns a fine jewellery brand, Arianna.
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