Shrenuj & Company Limited, a diamonds and jewellery company with consolidated group revenue of Rs.952 crores in FY ‘06-‘07 announced acquisition of 80 years old US based Simon Golub & Sons Inc., (SGS) one of the top five US jewellery distributors.
The deal, valued at US$ 22.7 million for acquiring 84.6% stake comes close on the heels of Shrenuj expanding its footprint across USA.
Speaking on the occasion, Vishal Doshi, President-Business Development, said, “this acquisition is keeping in line with our future strategy of getting straight to the retailer to build additional margins and have access to first hand information regarding change in fashion trends and consumer preferences. We will be using the massive distribution system of SGS to run various B2C marketing and branding programmes. Distributors with their service appeal will continue to be the mainstay of US jewellery business. With SGS we have an 80 year old business with a proven track record amongst both retail segments of the American jewellery market namely, the major chain stores representing the mass market and the independent retail stores representing the mom & pop stores."
Andrew Harris, President, SGS said, “Shrenuj shares our vision and values. In Shrenuj, we have found a team that we believe, will take SGS to greater heights. The entire SGS team has agreed with pleasure to continue managing the business to provide continuity and growth in operations for SGS and for all its indenting partners. SGS operates on robust inventory management systems based on sophisticated ERP…. making us a preferred supplier for large chain stores as well as independent retailers.” SGS closed the year 2006 with a turnover, including agency sales, of US$136mn from its two lines of business, viz. sales to majors and to retailers.
Giving an overview on the trends in the jewellery business Doshi, added, “the jewellery business worldwide is witnessing consolidation at all levels. Major retailers are looking for economical and efficient manufacturing and product development partners.” Commenting the trend as healthy, he said, “Indian players have truly become favorites of their western counterparts as possible partners and many such deals are likely in the near future.”
As for Shrenuj, the deal opens the entire North American market for its range of diamonds and jewellery. The deal, funded by long-term debts, FCCB and internal accruals, is expected to generate significant additional revenues and profitability for Shrenuj.
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