RAPAPORT... Titan Company, India’s largest jewelry retailer, recorded heavy losses in the first fiscal quarter as the coronavirus forced it to close stores for most of the period.
The company reported a net loss of INR 2.97 billion ($39.7 million) for the three months ending June 30, compared to a profit of INR 3.64 billion ($48.6 million) during the same period a year ago. Revenue plunged 61% to INR 20.2 billion ($270 million), with weak consumer sentiment and wedding postponements adding to the challenges, the company said Monday.
“The severity of the disruption in business due to the pandemic impacted the company’s performance, resulting in an unprecedented loss,” noted Titan managing director C.K. Venkataraman. Discretionary spending fell, placing a particular strain on sales of watches and diamond-studded jewelry, the company added.
Stores shut completely in April, with trading resuming gradually in May. However, even at the end of June, only 83% of retail locations had reopened, and the majority were still operating with reduced hours.
Titan’s jewelry sales tumbled 56% to INR 18.24 billion ($243.7 million) during the quarter, with the company posting a net loss of INR 68 million ($9.1 million) for the division, compared to a profit of INR 4.37 billion ($58.4 million) a year ago. Revenue from watches slid 89% to INR 760 million ($10.2 million), while the category saw a net loss of INR 1.73 billion ($23.1 million) versus a profit of INR 1.19 billion ($15.9 million) during the same period last year.
Plain-gold jewelry sales performed better than expected in June, despite high prices of the yellow metal, the company noted. Overall jewelry demand will improve toward the end of the fiscal year, Titan predicted.
“The recovery in business, particularly in the jewelry business, is encouraging, and we expect to get back to normalcy by the fourth quarter of this year,” Venkataraman added.
Image: Stud earrings from Titan brand Tanishq featuring diamonds and 18-karat gold. (Titan Company)
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