Jubilee ready to defend against blow to spending power

Chief financial officer Unyarat Pornprakit said the company had not witnessed any impacts yet, as reflected in growing sales revenue and profit.
The second quarter, which should be the low season for luxury products, actually saw Jubilee’s sales continuing to grow from the first quarter, she said, adding that the design and quality of its collections were the keys to this growth.
Even though the euro crisis has not yet had an impact on local spending, the company is defending itself against uncertainty by joining with financial partners to introduce attractive campaigns and planning to design new collections to attract customers. It will also focus on the provincial market, where the potential for jewellery sales is increasing.
She noted that uncertainty could have impacts on all industries, so operators must have proactive and defensive plans. For example, Jubilee experienced a business adjustment resulting from last year’s flood disaster.
“That incident hit purchasing power in Bangkok, so we decided to focus on the provincial market instead. Consumers in the provinces have high purchasing power, which helped sustain sales growth last year,” Unyarat said.
She said the behaviour of provincial consumers had changed, as they put more importance on the quality of products than before and studied luxury products before buying. The sales ratio in the provinces versus Bangkok is 45:55.
She added that the company was confident of meeting its sales-growth target of 20 per cent this year. Last year, Jubilee reported sales revenue of Bt887.32 million.
Jewellery consumers prefer spending through credit cards to cash because they are happy with the campaigns and zero-interest instalment plans that jewellery operators and banks offer, she said.
Kasikornbank has supported Jubilee as despite the uncertainty in the global economy, spending through credit cards at the bank has shown growth, driven primarily by shopping, said Pakorn Partanapat, executive vice president of KBank.
However, the bank has not introduced a luxury category of credit cards.
He said its wealthy customers, whom the bank calls Wisdom customers, have spending rates of Bt50,000-Bt60,000 per month. That compares with average spending on KBank credit cards of Bt17,000 per month, up from Bt16,000 last year.
Unyarat said Jubilee was conducting a feasibility study on expanding into neighbouring countries in preparation for the upcoming Asean Economic Community. However, the domestic market is the crucial one for the company because of the growing spending. The retail market for jewellery and precious stones in Thailand is valued at Bt35 billion, she said.