DUBAI: L’azurde Co. for Jewelry, which is known for its expensive items, is expecting the new affordable jewelry line to support sales this year as the company is looking into more innovative ways to stay ahead of the curve, according to its CEO.
The year 2022 started strong for the jewelry maker but the company is confronted with rising inflation and high material cost including gold on the back of the global geopolitical situation, Sélim Chidiac, CEO of the Saudi-listed L’azurde said in an exclusive interview with Arab News.
Chidiac pointed out that rising inflation along with robust gold prices has left the jewelry industry facing headwinds. He also detailed some of the measures taken by his company to combat high prices and stabilize customer footfall, especially during the COVID-19 pandemic.
“For the first time ever, we launched affordable gold jewelry at SR1,000 ($266). And we saw a great demand for this gold jewelry,” he said. This was reflected in the company’s performance in the following year.
“We see very high inflation in the Western world,” Chidiac told Arab News on the sidelines of the Top CEO Forum in Dubai. “The currencies in this part of the world (the Gulf) are pegged to the dollar. Central banks here will have to raise interest rates. How will inflation in the West impact our part of the world? We don’t know yet. So, there is this risk.”
In early Sunday trading, the stock price of the company was up 4.94 percent at SR17.04, ranking second among gainers after posting strong quarterly earnings.
Shares retreated a day later by 1.9 percent to trade at SR16.64 as of 2:19 p.m. Saudi time on Monday.
Q1 strong results
Saudi Lazurde Co. for Jewelry reported a 34 percent boost in net profit on the back of higher sales and revenues.
The jewelry producer, which is listed on the main index, generated a profit of SR13.7 million in the first quarter, up from SR10.2 million in the same period last year, it said in a bourse filing on Sunday.
The growth in net profit was primarily caused by an increase in sales and revenue for the quarter of 11 percent to stand at SR614.5 million.
The company also attributed the increase in profits to higher gross profits and lower financing costs.
2021 performance
Chidiac went on to speak about the “very strong” financial results for 2021, where the company achieved its lowest-ever working capital.
The jewelry producer made profits amounting to SR22 million last year as it recovered from a net loss of SR120 million a year earlier. Sales surged 54 percent to SR1.97 billion.
He added: “We’re investing in technology like 3D printing more than ever before, as automation helps reduce costs. The burden of inflation cannot be passed on to consumers. Consumers are now extremely sophisticated, with 80 percent of them doing research online before shopping in stores.”
Chidiac also pointed out that the pandemic helped his company to overcome supply chain challenges as the business began manufacturing some materials locally rather than importing them from China and Europe.
“Let’s do the maximum amount of manufacturing in local markets here. This is a major competitive advantage for us. So, for the rest of the year, we are cautiously optimistic. We have to work hard to continue delivering the results we have been delivering on a regular basis, from the first quarter of 2021 to today,” added Chidiac.
