31 March 2009
Uncertainty and fluctuations in gold prices have severely hit the retail gold market, which will continue to suffer until prices stabilise, leading gold retailer Joy Allukas told Emirates Business.
"Price fluctuations are badly affecting us. Our revenue for March 2009 dropped 22 per cent to last year. Sales will continue to be hit until prices stabilise; at any level," Alukkas said.
For 2009, prices should hover between $800 (Dh2,938) to $1,000 a kilogramme, Alukkas said. On industry speculation that the price of gold could rise to even $1,500, Alukkas said: "Commodity experts have their own instrument for measurement. If prices go below $1,000 our volumes will go up. If they go above $1,000 it needs to stabilise at a specific level for at least a few months. This will bring back retail confidence."
The Joyallukas Group, which has averaged 12 outlet launches a year since its inception in 1998, has brought all expansion plans to a halt. "This year is about consolidation. We have committed to five store openings in the UAE, Bahrain, Qatar and India. We will not launch any more stores until this crises turns around and market confidence and spending returns," said Allukas.
The group will also wind up its money exchange arm, which has two outlets in the UAE, and return to its core business - retailing gold and diamond - the chairman said. "The money exchange business has become too cumbersome, and once again there is too much fluctuation and risk. I have to consolidate and return to what we do best - sell gold and diamond jewellery."
Diamond sales would be the way forward for the company, he said. "While sales of gold have dropped over 20 per cent, diamond sales have remained unaffected. It is a steady market."
Uncertainty and fluctuations in gold prices have severely hit the retail gold market, which will continue to suffer until prices stabilise, leading gold retailer Joy Allukas told Emirates Business.
"Price fluctuations are badly affecting us. Our revenue for March 2009 dropped 22 per cent to last year. Sales will continue to be hit until prices stabilise; at any level," Alukkas said.
For 2009, prices should hover between $800 (Dh2,938) to $1,000 a kilogramme, Alukkas said. On industry speculation that the price of gold could rise to even $1,500, Alukkas said: "Commodity experts have their own instrument for measurement. If prices go below $1,000 our volumes will go up. If they go above $1,000 it needs to stabilise at a specific level for at least a few months. This will bring back retail confidence."
The Joyallukas Group, which has averaged 12 outlet launches a year since its inception in 1998, has brought all expansion plans to a halt. "This year is about consolidation. We have committed to five store openings in the UAE, Bahrain, Qatar and India. We will not launch any more stores until this crises turns around and market confidence and spending returns," said Allukas.
The group will also wind up its money exchange arm, which has two outlets in the UAE, and return to its core business - retailing gold and diamond - the chairman said. "The money exchange business has become too cumbersome, and once again there is too much fluctuation and risk. I have to consolidate and return to what we do best - sell gold and diamond jewellery."
Diamond sales would be the way forward for the company, he said. "While sales of gold have dropped over 20 per cent, diamond sales have remained unaffected. It is a steady market."
By Sean Davidson
© Emirates Business 24/7 2009
