Lazurde Co. for Jewelry is closely tracking the movement of the retail sector, assessing demand, and will consider showroom closure in absence of profit, CEO Selim Chidiac told Argaam.
The company has about 70 branches currently in Saudi Arabia and Egypt, of which the majority are profitable, Chidiac said, pointing out that Lazurde seeks to open about five showrooms in 2021.
On the other hand, it is closing from two to three branches due to lack of profits, he noted.
The CEO further explained that the Egyptian market represents 50% of the company's revenues, adding that the company has been present in the Egypt for 20 years and owns two plants. “We are considered one of the pioneers in the Egyptian market due to the continuous investment in high-quality products and innovation, in addition to marketing with celebrities” he noted.
Chidiac confirmed that Q3 2020 saw a recovery in revenues, which increased by 91% compared to Q2 2020, adding that the Q3 saw positive operating cash flows of SAR 12.7 million, despite net loss. This was realized through reducing working capital, increasing collections from the wholesale business, as well as higher retail sales.
The CEO mentioned that Lazurde is going through an important transition phase, by moving from the traditional sale of gold by weight in the gold markets, to selling gold by piece in the malls and through e-commerce, pointing out that the company capitalizes on its strong assets and professional team.
The brand “Lazurde In Style”, for the first time, is selling gold by piece in the markets, Chidiac said, noting that sales began with promising results.
The firm launched e-commerce in April after the spread of the coronavirus and the company is happy with the development of the sector. “Our main e-commerce brand, Miss L, represents 15% of the total sales,” he said.
Lazurde will soon launch its brand “TOUS”, in addition to other brands, in the e-commerce sector.
Revenues for Q3 2019 for the company's new brands - TOUS, Miss L, and In Style - accounted for 18% of total revenue, and 27% in Q3 2020.
Chidiac said that the company will continue to reduce debt, as it will lead to lower debts and finance costs.
“However, finance costs for Q3 increased by 4.3% year-on-year (YoY), due to the rise in gold prices, nevertheless, it will decrease in the coming quarters on a decline in working capital,” he added.
The CEO also pointed out that the COVID-19 pandemic contributed to the rapid change in consumer behavior to shift to e-commerce. “The shift that took place this year was supposed to take three to five years; however, we are committed to expanding the business as soon as possible in this sector,” Chidiac concluded.
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