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Kalyan Jewellers to expand through franchise model in H1 FY23

Kalyan Jewellers to expand through franchise model in H1 FY23

In the franchise model, the cost per store will be around Rs 20 crore, a majority of which will be inventory and the capex (capital expenditure) will be minimal.

After the evaluation of the performance of the pilot, the company will expand through the franchise route, which will be in addition to the usual opening of the Kalyan Jewellers-owned stores every year After the evaluation of the performance of the pilot, the company will expand through the franchise route, which will be in addition to the usual opening of the Kalyan Jewellers-owned stores every year

Kalyan Jewellers is planning to enter the franchise model in the first half of the next financial year to accelerate expansion mainly in the non-southern India market, according to a top company executive.

"We decided to make a foray into the franchise model to accelerate our expansion. Till date, all stores of Kalyan Jewellers are owned by us. Our initial plan to enter the franchise model of expansion was from 2025.


"However, looking at the kind of momentum and accelerated demand that we saw for the past 3-4 quarters, we have decided to enter into this model of expansion with a pilot of 2-3 stores in the first half of next fiscal," Kalyan Jewellers India Executive Director Ramesh Kalyanaraman told PTI.

After the evaluation of the performance of the pilot, the company will expand through the franchise route, which will be in addition to the usual opening of the Kalyan Jewellers-owned stores every year, he further added.


"In the franchise model, the cost per store will be around Rs 20 crore, a majority of which will be inventory and the capex (capital expenditure) will be minimal. A majority of our expansion for the next 2-3 years will be on non-south (India) markets.

"In the south, we will continue to expand but it will be minimal as we are already present in almost all tier I, II and III cities," Kalyanaraman added.

The company usually opens 12-15 showrooms every year with a capex of Rs 30 crore per store, he said adding that by the end of FY22, Kalyan Jewellers will have additional 15 showrooms funded through inter accruals.

Currently, the company has 151 company-owned showrooms in 21 states and four countries in the Middle East. Of this, 121 are in India and 30 are in the Middle East.

The Middle East region contributed 15 per cent to the company's overall consolidated revenue.

Published on: Feb 27, 2022, 4:53 PM IST
Posted by: Sana Ali, Feb 27, 2022, 4:49 PM IST
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