With the recession in the US economy looming large, India's "Christmas and New Year" jewellery sales to the world's largest diamond jewellery consumer has declined up to 15 per cent.
Confirming the wholesalers' export to the US, constituting about 55 per cent of the global diamond jewellery sales, Vasant Mehta, chairman, Gems & Jewellery Export Promotion Council, the apex body for gold and diamond jewellery manufacturers in India said, "The diamond market is not immune to the global development.
"Therefore, the global economic slowdown is bound to have a bearing on the diamond jewellery sales as well. According to general market perception, the jewellery exports to the US have declined by 10-15 per cent."
Christmas and New Year sales constitute over 25 per cent of the overall US jewellery sales of about $100 billion in which India contributes about 34 per cent.
The market perception for Christmas and New Year, however, would be known only in by the of January. But, pre-Christmas sales in which manufacturers execute all wholesale orders one month ahead of the festival, the sentiment remained little weak this year, Mehta added.
Gitanjali Gems, a Mumbai-based leading jewellery maker and retailers, which largely supplies finished jewellery from India to its 150 retail stores in the US, however, has witnessed no decline in sales so far this year. US business contributes about 12 per cent of the company's annual turnover of Rs 2,654.33 crore or Rs 26.54 billion (2007-08).
However, the company has kept all its US expansion plans on hold till global economic condition improves.The company was earlier planning to expand its retail base in the US from the existing 150 shops to now to 175 by the end of the current financial year.
"There will be no expansion nor any acquisition for US wholesale or retail chains in the US at least for the one year," Mehul Choksi, chairman said. However, next year we can consider acquisition of further retail chains, in case we get suitable offer, he added.
In last December, the company bought US-based Rs 450-crore (Rs 4.5 billion) jewellery chain Samuels, marking its maiden acquisition in the gems and jewellery space.
Samuels has 100 stores in the US, with sales of Rs 500 crore (Rs 5 billion) and a back-end capacity for 150 new stores.
Many companies have recorded flat sales to the US as demand has slowed down. However, companies like Suashish Diamond have adopted wait and watch attitude for venturing into US retail market through acquisition.
India exported gems and jewellery worth $21.88 billion (Rs 109,400 crore) largely to the US, European Union, Hong Kong and the UAE during 2007-08.