Lazurde’s shift to selling gold by pieces instead of weight yields higher profit margin: CEO

Lazurde Company for Jewelry is presently witnessing a major shift from the wholesale trade of selling gold and jewelry by weight to selling modern jewelry by piece, CEO Sélim Chidiac said yesterday during a press conference to discuss the firm’s quarterly results.

The move will contribute in achieving higher profit margin for the company, Chidiac added.

The initial indications of the shift reflected positively on the company's performance, especially after the acquisition of TOUS, one of the group's brands.

Chidiac further explained that Lazurde’s cash flow is strong despite its losses in Q2 2020, indicating that it was able to generate a positive cash flow from operations amounting to SAR 18.5 million in the same period, as a result of reducing working capital, increasing collection from the wholesale segment, and higher retail sales.

On e-commerce, the CEO asserted that the group seeks to achieve 5% of sales electronically, noting that it reached 2.5% of the group’s total sales in Q2 2020, as Miss L’s sales accounted for 20% of them.

Lazurde reported a net loss after Zakat and tax of SAR 67.8 million for the first half of 2020, versus a net profit of SAR 24.1 million in year-earlier period, driven by a slump of 33.4% in the group's total revenue, according to data compiled by Argaam.