Mumbai-based Renaissance Global Ltd has placed itself as an established layout house and a key supplier to worldwide jewelry outlets. With 3 acquisitions in the remaining five years, Renaissance is venturing into new geographies and expanding its product category. The most prominent of these acquisitions is the Enchanted Disney Fine Jewellery which has helped it enter the license jewelry area, says Sumit Shah, Vice Chairman, in a conversation with BusinessLine. Excerpts.
What brought about the acquisition of Jay Gems? What sort of aggressive blessings will the acquisition upload to the business enterprise’s worldwide commercial enterprise? The organization’s consciousness is to boom the percent share of manufacturers in its international portfolio. Therefore, we’re obtaining brands and looking for more such possibilities in distinctive geographies. In line with this method, in 2016, RJL entered into a licensing agreement with Hallmark to launch the Heart of Hallmark jewelry series. Similarly, Jay Gems LLC has a distinctive licensing agreement with Enchanted Disney Fine Jewellery.
The acquisition of Jay Gems became consistent with the organization’s strategy to amplify the branded jewelry phase. Enchanted Disney Fine Jewellery gives distinctive collections at fundamental shops across the USA, UK, and Canada. Sales through licensing agreements yield advanced product positioning and a higher margin. The corporation’s cognizance is to have an extra presence globally. After the USA, UK, and Canada, we can amplify into new geographies, including China, Japan, Middle East, Russia, and India, which are massive markets receptive to the Disney brand.
How has the employer been capable of keeping a healthful debt-to-fairness ratio?
The agency has been extraordinarily conservative approximately debt in the commercial enterprise. The company’s debt is basically operating capital debt, and the company makes an effort to lessen the working capital cycle within the commercial enterprise by negotiations with buyers and efficient inventory management. The complete borrowing is dollar-denominated, and therefore, the interest charge is fairly strong. Even the acquisitions that the employer has done during the last years, including the recent Jay Gems acquisition, have been deliberate through internal accruals rather than taking debt. With the improved profitability in the enterprise on a yr-on-year basis and a conservative approach to debt, the agency has maintained a healthy debt-equity ratio and will hold to achieve this.
How does the employer plan to leverage the fairness of brand Disney besides?
The Disney brand is expected to be worth $ fifty-five million, and the Disney princess that’s part of Enchanted emblem is a $3 billion brand international. In the beyond, Jay Gems turned into, in large part, concentrating on the US market. However, the business enterprise is planning to increase the market into new geographies like China, Japan, Middle East, Russia, and India. The market for Enchanted jewelry is beneath-penetrated, and there is a big possibility to extend this portfolio and develop it to be a $500 million logo within the next 3-four years.
The gemstones and jewelry manufacturers and exporters in India deal with massive demanding situations raising capital as banks tighten lending norms. How has the company managed to stay self-enough?
After the banking frauds perpetrated by huge players of the gems and jewelry sector, banks have turn out to be extraordinarily careful. The employer enjoys good popularity amongst its lenders, and the credit score limits have no longer been impacted.
However, there has been a general thrust back for growing credit to the sector through the banks. The business enterprise has taken this as an opportunity to slight the operating capital requirement by using powerful control of borrowers and tight stock controls. Renaissance is also making plans to mission into the Indian domestic jewelry area. What’s the rationale behind the strategic shift? We are finalizing our strategy for venturing into the Indian market, and positioning similar to the retail jewelry market is huge, however challenging for a brand new brand.
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