Acquisition of 70% Stake in Tri-Star a ‘Strategic Move’ for Gitanjali

Following the recent announcement of Gitanjali Gems Ltd acquiring a majority stake in Tri-Star Worldwide LLC, Mehul Choksi, Gitanjali Gems’ CEO, in an exclusive interview with Jewelbiz India, revealed that his company had paid $5 million for a 70 percent stake in the U.S., and expects the move to add an estimated $20 million to the company’s top line during this year.

Choksi described the acquisition as a “strategic move” for the company. “With its stake in Tri-Star, Gitanjali now has developed a presence across the entire diamond pipeline, complementing its strong retail presence in different parts of the world,” Choksi said.

Tri-Star has direct access to rough from BHP Billiton’s Ekati mine in Canada, and is also a licensee of the Canadamark, and thus will be a steady source of diamonds in sizes from 25 points and above to Gitanjali, he points out.

Choksi also says that the acquisition is a forward looking move that will give Gitanjali a dual edge in the diamond business in the years ahead. With margins in diamond manufacturing significantly reduced, he says, “In the future, branded diamonds with guarantees of their origin like the Canadamark, Forevermark, etc. will attain far more importance.” Besides, consumers will be willing to pay a premium for them.

This acquisition will be a boost for its retail operations. Gitanjali already has a strong retail presence in the U.S. after its recent acquisition of retail chain Samuels Jewelers, and through Leading Jewelers of the World which was acquired by a U.S. based associate company. This is in addition to its existing customer base of 1,200 independent retail jewelers.

Initially, the Canadia diamonds will be distributed through all these outlets over and above Tri-Star’s present customer network in the U.S. and UK. Subsequently it will also be introduced by the group in other key diamond markets like India and the Middle East where Gitanjali already has a significant retail presence.

Additionally, Choksi expects these diamonds, with the assurance provided by a certificate of origin and other guarantees, will go a long way to boosting consumer confidence in the natural product in the face of the rise of synthetics and the negative impact of NGO campaigns on blood diamonds.