L’Azurde Company for Jewelry, one of the biggest jewelers in Saudi Arabia, is planning new acquisitions and expansions in 2017 as it attempts offset the impact of lower consumer spending in its core markets.
“We are considering acquisitions in the retail business or in the manufacturing, wholesale segments across the MENA (Middle East and North Africa) region,” chief executive officer Selim Chidiac said in a conference call.
He said the company will wait for the right target and price, and study all potential opportunities before making a move.
L’Azurde posted a 26 percent year-on-year decline in net profit for FY16, and an 86 percent YoY slump in fourth quarter earnings, attributing the fall to lower operating revenues.
“The challenging environment from the third quarter was sustained in Q4 across all markets, leading to weakening in consumer spending due to slowing economy and the Egyptian pound devaluation and floatation,” Chidiac said.
In Saudi Arabia, the jewelry maker’s core market, operating revenue declined by 17 percent, and by 69 percent in Egypt.
Chidiac said the company’s priority now is to grow topline, and it has planned new initiatives to expand and diversify the business.
The company has launched 14 karat gold jewelry lines in Egypt and has also planned a value jewelry brand, Kenaz, for the Saudi Arabian markets.
He said the plans also include expanding the retail division. L’Azurde has signed five lease agreements for opening four new showrooms in Saudi Arabia and one in Egypt.
“On (the) geography front, we are working to expand our business in the United Arab Emirates and other GCC markets to reduce our reliance on Saudi Arabia and Egypt,” he said.
Responding to a question on outsourcing manufacturing to Egypt to reduce cost, Chidiac said the move could help improve the firm’s margins and create opportunities for cost optimization, without mentioning if the company is planning to outsource.
Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com
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