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BW Businessworld

Shining Through

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They may be first generation jewellers, but the Gargs of PC Jewellers have had a golden run.  The two brothers — Padam Chand Garg and Balrram Garg — started out in the jewellery trade in 1981 in partnership with another firm. But in 2005, they decided to go solo, launching PC Jewellers with a capital of Rs 10 crore and a flagship store in Delhi’s Karol Bagh.

Today the company has 45 showrooms in 38 cities across 15 states and is entering five more. The first 35 stores were set up from internal accruals, but in December 2012, the company took the IPO route to fund expansion. By the end of 2014, the plan is to have 60 stores.

The last four years have been a story of high growth — an average of 54.81 per cent. Says Balrram Garg, managing director, PC Jewellers, “Since the beginning we focused on both topline as well as bottom line growth. It’s not enough to grow sales, but we were clear we needed to maximise profits too. Studded and diamond jewellery yield better margins.”

He points out how they not only keep an eagle eye on store figures, but also track every counter’s performance. Prompt action is taken if a counter is not yielding adequate profits — either the items are changed or the sales person is retrained.

Garg credits the rapid growth of PC Jewellers to a very sound understanding of consumer behaviour. Trust and purity are two big drivers in the jewellery business, he says, describing how setting up gigantic showrooms was one way of winning customer trust. The Gargs also kept their making charges on standard items lower than the market rate, even as the designer items were kept higher. “Most first-time consumers ask two questions when they walk into a store — how much is the making charge and what would be the refund model when gold jewellery is returned a few years later,” he points out. 

The other tactical move was to focus on the wedding segment. “Eighty per cent of sales come from the wedding segment,” points out Garg.

Future strategies include roping in housewives through a direct selling model, getting into e-commerce to cater to NRIs and the gifting segment as well as youth. Going forward, as the chain expands into tier-3 cities, stores will also be franchised out.

(This story was published in BW | Businessworld Issue Dated 11-08-2014)