PNJ booming through a falling market

One of the country’s largest gold jewelry retailers, the Ho Chi Minh City-based Phu Nhuan Jewelry JSC (PNJ), does not seem to take the plunge in the precious metal price badly, as its core business line in gold jewelry is reportedly flourishing.

According to PNJ, the company has achieved a promising half-year financial result thanks to its budding gold jewelry retail, coupled with the expansion in its retail network and fresh focus on the customer experience, as well as the superior customer service at all of PNJ stores nationwide.

PNJ’s half-year financial report revealed its revenue at VND3.846 trillion ($176 million), an up of 6 per cent compared to the same time last year, while its gross profit and pre-tax profit were recorded at VND546 billion ($25 million) and VND228 billion ($10.44 million), an increase of 43 per cent and 46 per cent, respectively, compared to the same period last year. PNJ’s revenue from gold jewelry retail, as of 30 June, notably grew 45 per cent over the same period.

This stout performance was mainly driven by the strong same-store-sale growth of 27 per cent during the period, as a constant outcome of applying best practice in organising around customer satisfaction at store level.

“In order to achieve such results, we have put significant investments to enhance senior management staff in our design, supply and retail chain,” said Cao Thi Ngoc Dung, PNJ chairman and general director.

“Given such efforts, we have been able to make sophisticated jewelry products with distinct differences that can lead the trend.”

According to the Gold Demands Trends report for the first quarter, from the London-based World Gold Council (WGC), the global demand for jewelry was still the most significant component of the overall gold demand, with a record of 601 tonnes, and the appetite for gold jewelry spread across a number of Southeast Asian countries including Vietnam.

WGC data showed Vietnam’s jewelry demand in the first three months totaling up 4.1 tonnes, an up of 10 per cent compared to the 3.7 tonnes of jewelry gold attained in the same quarter a year earlier.

As at the end of July, PNJ has opened up an additional 24 jewelry stores across the nation, confirming its position as the leading jewelry retailer in terms of the distribution network of 180 retail stores. The jeweler has achieved 68 per cent of its plan to launch a total of 35 new stores on a national scale in 2015.

“Along with the advanced training to enhance our goldsmiths’ skill and major investments for new technology, PNJ has a clear target to expand our retail network, concentrating in the period of 2015-2016,” said Dung.

According to Dung, at the start of the year, PNJ signed a contract worth of VND40 billion ($1.83 million) to import a brand-new line of machinery, and also finalised a consultant contract with Italian experts to enhance the company’s technology system and goldsmiths’ expertise. These efforts are to fulfill the long-term strategy of PNJ for self-manufacturing the finest jewelry products, which have for long been imported from overseas to serve the domestic market.

No one can predict exactly how the gold market will be fluctuated in the future. As for PNJ, the gold jewelry business is definitely keep on growing, backing up by a network expansion, superior customer service, warming-up economy and consumer confidence.