Kalyan Jewellers to expand franchise network, focuses on debt reduction

Fine jewellery brand Kalyan Jewellers is focusing on debt reduction until 2027. The Kerala based business plans to expand its brick-and-mortar retail operations with a franchise model towards this aim. 

“The plan for the next three to five years is to work on both numerator and denominator for ROCE [return on capital employed] improvement- reducing our debt while continuing to expand,” said Kalyan Jewellers’ executive director Ramesh Kalyanaraman, ET Retail reported. “Once our debt reduction phase is completed by 2027, we will look at new avenues to utilise the excess cash flow, potentially including company-owned stores or other options like buyback or higher dividend payout etc, subject to board approvals.”

Kalyan Jewellers aims to bring down its current debt by Rs 300 crore by the end of the 2025 financial year, the Economic Times reported. This would bring its non-GML debt in India to Rs 600 crore and the business plans to liquidate some of its land collaterals which are non-store assets mortgaged to banks in order to achieve this.

“Franchise expansion is an asset light model that aligns with our debt reduction strategy,” said Kalyanaraman. “It allows us to grow faster without burdening the balance sheet. By the end of the next financial year, our revenue mix should be evenly split between franchise and company owned stores.”