Indian suitor tipped for Zamels Jewellers

7.2 k views | Posted September 06, 2011 | By Coleby Nicholson

The Australian jewellery industry was a flurry of speculation after Jeweller reported last week that 127-store The Jewellery Group was up for sale.

On Friday last week, Jeweller revealed that Sydney-based private-equity firm Quadrant is considering the sale of the Jewellery Group, parent company 101 Zamels and 26 Mazzuchellis stores, for significantly less than its sale four years earlier.

Now, senior industry sources have confirmed being approached about the sale, while new speculation tips an Indian based suitor.

Quadrant acquired the business in March 2007 from the Zamel family and, according to reports from well-placed senior industry members, recently began looking to find an overseas buyer. While Jeweller’s sources ruled out New Zealand-based jewellery chains Michael Hill and James Pascoe, the latest reports indicate an India-based company is currently undertaking due diligence.

When contacted to confirm reports of the potential sale of Jewellery Group, Quadrant’s managing director Chris Hadley declined to comment. Last week Jewellery Group managing director Adrian Murphy would not confirm that a sale was imminent, and declined to comment whether Zamels was up for sale.

However, some prominent members of the Australian jewellery industry have been approached about purchasing Jewellery Group, including Adelaide-based Transworld Enterprises, operator of 31 Shiels and eight Grahams retail stores in SA and WA,

Transworld Enterprises managing director Albert Bensimon told Jeweller Deloitte, which is reportedly handling the sale for Quadrant, recently approached him. Bensimon was indeed interested in purchasing The Jewellery Group, and made an offer to the agents; but after receiving his pitch, Bensimon claims neither Deloitte, Quadrant nor The Jewellery Group have pursued his offer.

“The sale process [of Jewellery Group] seems rather unusual given that I have not had any further contact with The Jewellery Group and I have told them I am interested in the purchase. In fact, I accepted their offering price!” Bensimon said.

Bensimon said he phone has been ‘ringing off the hook’ since Jeweller’s story was published last week. “I’ve received lots of phone calls since Friday and many names have been suggested, including high profile Indian company Gitanjali Gems but I believe that M Suresh & Co is the most likely acquirer,” he said.

Last week a senior industry source, who asked not to be identified, told Jeweller that other companies had been approached about the sale, although he was uncertain whether Quadrant would be able to find a buyer; “It was common knowledge that a number of people had looked at [buying Zamels] and I’m not sure if [Quadrant will] be successful at selling it.”

Another source with knowledge of the sale also told Jeweller he believed an Indian company was close to acquiring Jewellery Group, which, if true, would place Australia’s three largest jewellery retailers in foreign hands.

Industry sources close to the Zamels sale in 2007 believed that Quardrant paid around $48 million for the Zamels business and reliable sources say that if a new sale proceeds, Quadrant is tipped to be offloading the group for less than $20 million - a loss of around $30 million in just over four years.

Zamels had humble beginnings when, in 1954, watchmaker Phillip Zamel opened his first store in NSW. Fours years later, Zamel opened a South Australian store at Elizabeth. Phillip’s sons, Adrian and Stephen trained as manufacturing jewellers and joined the business.

Associates close to the Zamel family also point out that the five-year non-compete clauses signed by Adrian and Stephen Zamel will soon end, giving the pair an opportunity to re-enter the industry.

More reading:
State of the Jewellery Industry Report – 2010
Who's buying Zamels?