Tata Group firm Titan Company today said its jewelery sales have reached “pre demonetisation” level in December but sales of watches through multi-brand outlets are yet to recover.
The company, which witnessed a “huge rush of buyers” and “abnormally high” sales on November 8 after announcement of demonetisation, said after a brief lull sales have picked possibly due “strong wedding season and closure of a number of smaller jewelers across the country”.
“Post the announcement of demonetisation on November 8, 2016, all consumer facing businesses of the company witnessed a drastic slow down for a few days after which recovery was clearly visible in modern retail and dedicated retail channels,” the company said in a regulatory filing.
“While the sale in these channels has recovered to pre-demonetisation levels, the sale in the trade channel in watches (the multi brand outlets) has taken a hit and is yet to recover as most transactions in these outlets have been on cash basis,” it added.
On the impact of demonetisation, it said immediately after the announcement by Prime Minister Narendra Modi, “many Tanishq stores experienced a huge rush of buyers and sales for the day were abnormally high. The company had directed all store staff to adhere to all applicable regulations and ensured all stores closed sales at midnight”.
Post November 8, there was a brief period of lull post which Tanishq’s average daily sales were close to the average daily sales pre-demonetisation, it said.
“This trend was visible till the end of December and is possibly due to a strong wedding season and closure of a number of smaller jewelers across the country,” the company said.
On the revenue front, Titan said this quarter the jewelery division has grown reasonably “despite the base effect due to the studded jewelery activation having started in Q3 in last financial year and the impact of demonetisation. The retail growth for Tanishq in Q3 FY 17 is around 15 per cent”.
The company said its watches division also had a good festival season with the domestic business growing well on a like to like basis during the October-December quarter.
“Post demonetisation, while the sale of the WOT (World of Titan) and Fastrack channels have recovered after a brief period of lull, ending with a high single digit retail growth for the quarter, the trade channel is expected to take another 2-3 more months to recover,” the company said.
The trade channel contributes to around 50 per cent of the sales of the watch division.
In the Eye Wear segment, prescription eye wear business has done well during the quarter, however, sunglasses business “is struggling to maintain its share” which is “pulling down the overall growth”.
“Industry growth continues to remain a concern for the division,” the company said.
In the corresponding October-December quarter last fiscal, Titan Company had reported net sales of Rs 3,398.38 crore.