PE funds investing in diamond jewelers

Jewelers
[Image Courtesy: Belchonok, DepositPhotos]

Investments from Private Equity funds have widened opportunities for various jewelers to accelerate their efforts in network expansion and offer additional value in jewelry.

JamesAllen.com raises USD 140 million

Online jeweler JamesAllen.com owned by parent firm R2Net received a USD 140 million investment from San Francisco Private Equity firm Francisco Partners.

James Allen is famous for its online shopping, which features a 360 degree view of its gems and rings. The firm has a curated collection of around 150,000 ‘conflict-free’, fully certified diamonds and ring settings and allows customers to design and customize their jewelry.

“We are thrilled to partner with the team at Francisco Partners to continue our journey of disrupting the diamond industry. We have a shared vision that consumers deserve a better diamond buying experience and we are demystifying the process. We provide better pricing and better value by utilizing innovative technologies that enhance everything from our Diamond Marketplace to the end consumer experience,” said R2Net’s Co-founder and CEO Oded Edelman.

The company claims to offer prices that are 30-50% less expensive than the brick-and-mortar retailers.

“We are very excited to be investing in JamesAllen.com to help them offer not only incredible value in bridal jewelry, but to become the jeweler for life for savvy consumers, millennial couples and jewelry connoisseurs everywhere,” said Matt Spetlzer, Partner at Francisco Partners.

 

Warburg Pincus invests in Kalyan Jewelers

Warburg Pincus, an American Private Equity firm, invested an additional INR 500 crores (~USD 77 million) in India-based Kalyan Jewelers. Earlier, in 2014, Warburg Pincus had invested INR 1,200 crores (~USD 184 million), making it the highest investment in jewelry sector in India. The total investment of the firm in the jeweler now goes to INR 1,700 crore (~ USD 261 million).

The second round of investment aims at supporting expansion plans of the jeweler for next 3 years. It plans to double its presence using a combination of equity, debt and internal accruals, to more than 200 showrooms. It is also planning to get into the e-commerce segment which will go hand-in-hand with their retail network. Kalyan Jewelers is also converting its 630 ‘My Kalyan’ customer service outlets in to mini diamond stores to tap the growing demand of diamond jewelry.

“We believe that the curb in cash transactions will see a shift from the unorganised sector to organised players like Kalyan. The rationalisation of taxes under the goods and services tax (GST) regime will increase operational efficiencies significantly,” T.S. Kalyanaraman, chairman and managing director, Kalyan Jewelers said.

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