Riyadh, KSA: L’azurde Company for Jewellery (“L’azurde” or “the Company”), the largest gold and jewelry designer, manufacturer, distributor and retailer in the Middle East, announced today its year-end 2018 financial results.
L’azurde operating revenues for the full year of 2018 amounted to SAR 406.4 million, an increase of 14.4% compared to 2017. This represents an excellent performance against a mixed market backdrop where some challenges remain. In Egypt, L’azurde continued to record strong revenue growth with a 51.2% increase in the wholesale business helped by the recovery in the economy and purchasing power, and revenue growth of 154.1% in retail with the opening of five new shops also supporting the significant increase. Meanwhile in KSA, wholesale revenues declined by 10.9% mainly due to the introduction of VAT which affected the industry, especially in the first quarter of 2018. However, retail revenues increased by 1.7% reflecting the benefit of two months of revenues from TOUS, having completed the acquisition at the end of October 2018 and the growth at L’azurde’s airports retail business as well as the Kenaz kiosks.
Gross profit for the year increased by 12.2% to SAR 244.1 million from SAR 217.5 million in 2017 due to higher operating revenues. Operating expenses increased by 22.5% to SAR 174.2 million in 2018 compared to SAR 142.2 million as a result of higher marketing expenses and higher variable expenses related to higher revenues, in addition to the operating expenses of TOUS from the date of acquisition. Also contributing to operating expenses were the additional costs of the retail expansion in Egypt and additional staff-related costs in KSA including the increases in expat levies.
Net income for 2018 amounted to SAR 17.7 million versus SAR 31.5 million in 2017 due to higher expenses, which included a one-off cost for due diligence on the TOUS acquisition. Excluding this one-off cost, net income for 2018 was SAR 23.1 million, a decrease of 27.0% compared to 2017.
Commenting on the results, Sélim Chidiac, CEO of L’azurde, said: “2018 has been a challenging year for L’azurde in our home market of Saudi Arabia, as it was for many other companies. Our businesses in Egypt, however, continued to perform strongly and it was a year of several strong achievements which will position us well for the future. Principal among these was our acquisition of the KSA franchise of the Tous international jewelry brand. This establishes us with a strong position in the fastest growing sector of the jewelry industry, the accessible jewelry segment. The acquisition diversifies our opportunities for growth and will add significantly to our profits in 2019 and beyond.
“We have solid initiatives for 2019 as we plan to revitalize our wholesale business through the launch of new collections supported by celebrities, expand the TOUS franchise business in KSA, develop our L’azurde retail business in Egypt and leverage technology and 3D printing capabilities to optimize production costs. In addition, we plan to obtain in 2019 a full endorsement and confirmation of our business compliance with Shariaa provisions,” added Chidiac.
L’azurde’s year-end 2018 financial results can be found here: [https://lazurde.com/annual-financial-statements/]
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About L’azurde
Since it was founded in 1980, L’azurde has excelled at the art of jewelry design. Today, it is the largest gold and jewelry designer, manufacturer, and distributor in the MENA region, and the fourth largest gold manufacturer in the world, selling over one million pieces of jewelry per annum.
L’azurde has over 2,000 employees and produces more than 4,000 different jewelry models every year in 21-karat and 18-karat gold and diamond jewelry. The jewelry pieces are manufactured at the Company’s factories in Saudi Arabia and Egypt, using advanced high-technology equipment, and distributed to more than 1,800 retailers across the GCC and MENA region, as well as being exported to more than 28 countries outside the region. L’azurde also has its own network of 20 mono brand retail shops at top malls in KSA and Egypt, where it is focused on the sale of diamond jewelry.
In line with its strategy to become a ‘house of brands’, L’azurde finalized in October 2018 the acquisition of the TOUS franchisee in KSA. TOUS is an international lifestyle brand focused on affordable luxury that has been in business for almost 100 years and with more than 620 stores in over 53 countries. As a franchisor, TOUS designs, manufactures and sells jewelry, bags and accessories for women and men. Their offering covers a wide range of products including fine jewelry with diamond, gold and silver, its core business, and handbags, fragrances and accessories. TOUS has been present in KSA since 2008 with a network today of 26 stores across the Kingdom.
For further information, please contact:
Sophie McNulty / Batoul AlBeitouni
Tel: +971 44507600
Email: Sophie.McNulty@bcw-global.com/ Batoul.AlBeitouni@bcw-global.com
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