L’azurde Company for Jewelry(“L’azurde”, “the Company”), the largest gold and jewelry designer, manufacturer, distributor and retailer in the Middle East, announced today its financial results for the second quarter of 2020, while making robust strides in achieving its bold commitment towards the transformation journey on which it proactively embarked over a year ago.
As Q2 results showed a decrease in KSA wholesale revenues due to the effect of unusual and unprecedented factors such as COVID-19, a sharp increase in gold price and the tripling of VAT to 15% from 1 July 2020, L’azurde took the decision to accept one-off cost to recall its heavy weight and high value products to rationalize and optimize its investment in working capital and reduce finance costs. The Company’s wholesale revenues in Egypt in current half year also declined by 30.6% compared to same period of last year.
Group operating revenues for the second quarter of 2020 amounted to SAR 49.0 million, generating a net loss of SAR 66.2 million in the second quarter of 2020, mainly due to closure of malls, reduced working hours after precautionary actions were taken to prevent the spread of COVID-19 pandemic and one-off loss on product recalls.
While L’azurde has successfully navigated through many challenges over its 40-year history, the COVID-19 crisis that hit most businesses around the world, in addition to the sharp gold price increase and the VAT tripling, generated the most challenging situation the Company faced to date. “Our core traditional wholesale by weight caused significant short term stress on the company’s business as it is majorly impacted by the gold price increase and the higher VAT, which came at the same time as COVID-19”, said Sélim Chidiac, CEO of L’azurde.
However, the Company is optimistic about the future as it had already adjusted its sails and reoriented itself after proactively embarking on a transformation journey since last year, focused on introducing new businesses selling jewelry by piece in the modern trade and online. The Company’s transformation has already proven to be successful and timely with the share of retail jewelry sales by piece rising rapidly as a proportion of Company’s total revenues.
“With a very solid brand name, strong heritage, and jewelry industry knowledge, L’azurde has learned to improve its resilience to risk,” said Chidiac. “Thanks to its experienced management team and very committed shareholders, the Company is now oriented towards a new full potential plan that will help reshape the traditional Gold jewelry segment by offering a new jewelry line meeting the consumers’ latest trends and presenting retailers a very attractive commercial offer,” he added.
Going forward, the Company will develop the fast growing Miss L’ fashion jewelry line to its full potential through retail points of sales, E-Commerce and 3rd party retailers in modern trade. It will also work on expanding the TOUS global franchise business in KSA, while scaling L’azurde promising fast growing E-Commerce business through more investments in technology and a state of the art experienced digital organization, among other key drivers for the Company’s future success.
For more L’azurde news, please visit the Company’s website ( http://www.lazurde.com ).
