Mumbai-based Renaissance Global Ltd has positioned itself as an established layout residence and a key provider to worldwide jewelry stores. With three acquisitions within the last 5 years, Renaissance is venturing into new geographies and increasing its product category. The maximum distinguished of these acquisitions is the Enchanted Disney Fine Jewellery which has helped it enter the license jewelry space, says Sumit Shah, Vice Chairman, in a conversation with BusinessLine. Excerpts.
What led to the acquisition of Jay Gems? What form of competitive advantages will the purchase upload to the organization’s global commercial enterprise? The corporation’s cognizance is to grow the percentage proportion of manufacturers in its international portfolio. Therefore, we’re obtaining manufacturers and searching out more such opportunities in extraordinary geographies. In line with this approach, in 2016, RJL entered into a licensing settlement with Hallmark to release the Heart of Hallmark jewelry series. Similarly, Jay Gems LLC has an exclusive licensing settlement with Enchanted Disney Fine Jewellery. The acquisition of Jay Gems become in step with the corporation’s method to enlarge the branded jewelry segment. Enchanted Disney Fine Jewellery gives one-of-a-kind collections at important shops across the USA, UK, and Canada. Sales thru licensing agreements yield advanced product positioning and a higher margin. The organization’s attention is to have a greater presence globally. After the USA, UK, and Canada, we can increase into new geographies together with China, Japan, Middle East, Russia, and India, which can be huge markets receptive to the Disney brand.
How has the enterprise been capable of preserve a wholesome debt-to-fairness ratio? The employer has been extremely conservative approximately the debt in the business. The debt within the company is essentially operating capital debt, and the business enterprise attempts to lessen the working capital cycle in the enterprise by way of negotiations with buyers and, additionally, green stock control. The whole borrowing is greenback-denominated, and therefore, the interest rate is in all fairness solid. Even the acquisitions that the company has completed over the last years, such as the recent Jay Gems acquisition, were deliberate through inner accruals instead of taking debt. With the progressed profitability within the commercial enterprise on a 12 months-on-year foundation and conservative approach to debt, the enterprise has been capable of keeping a healthful debt fairness ratio and could continue to achieve this.
How does the organization plan to leverage the equity of emblem Disney further? The Disney logo is predicted to be well worth $ fifty-five million, and the Disney princess that’s part of the Enchanted logo is a $3 billion brand worldwide. In the past, Jay Gems become in large part concentrating on the US marketplace. However, the company plans to extend the market into new geographies like China, Japan, Middle East, Russia, and India. The market for Enchanted jewelry is below-penetrated, and there’s a massive opportunity to expand this portfolio and develop it to be a $500 million logo within the subsequent three-4 years.
The gemstones, jewelry manufacturers, and exporters in India face huge challenges in elevating capital as banks are tightening lending norms. How has the corporation controlled to remain self-enough? Banks have come to be extremely careful after the banking frauds perpetrated through big players of the gemstones and jewelry region. The corporation enjoys outstanding recognition amongst its creditors, and the credit limits have now not been impacted. However, there has been a preferred beat back for growing credit to the arena through the banks. The corporation has taken this as an opportunity to moderate the working capital requirement by using powerful management of debtors and tight inventory controls.