The profit margin per gram remains the same despite gold hitting record high prices, say jewellery business owners
The UAE gold jewellery industry is undergoing a consolidation phase as precious metal prices hit a record high, making it challenging for some of the players due to rising costs and rentals, jewellers in Dubai said.
Chandu Siroya, owner of Siroya Jewellers, said there is a lot of consolidation happening right now, citing the recent acquisition of Dubai-based jeweller Damas by India’s Titan.
“Some small pairs are announcing mergers as well. Manufacturers are joining hands to cut down on their costs because the fixed costs get divided. I believe 2026 is going to be different, a new era for the jewellery industry,” Siroya told Khaleej Times during an interview.
“I feel the industry now has reached a point where there will be further consolidation. And it’s for the better. Short-term might be a pain point, but in the long-term, we see a better future for the local gold and jewellery industry,” said Chirag Vora, managing director of Bafleh Jewellers.
In July 2025, India’s Titan Company announced that they were acquiring a majority stake in the UAE’s Damas LLC, the current holding company for Damas jewellery business in GCC countries, from Mannai Corporation, for an enterprise value of Dh1.038 billion.
It was a major deal this year, attracting global attention from the precious metal industry, especially in the Gulf region.
Challenges for jewellery industry
Highlighting the challenges that the industry faces, Chandu Siroya said rising borrowing costs, rentals, and salaries are key challenges for the industry.
Following Covid-19 pandemic, commercial property rents in Dubai have been rising due to high demand for offices and retail outlets from new businesses. The rate has accelerated over the last couple of years due to shortage of good locations.
Chandu Siroya
“The interest cost has also gone up. Earlier, when we were borrowing gold, we could get gold at two per cent. Today, it is a minimum of six per cent because the bank margins have gone up. The banks have started charging more,” he said, adding that the profit margins of the jewellers stay limited because making charges per gram are the same despite a surge in gold prices.
“If you were to count the margin of profit when gold was at $2,000 and now that it is at over $4,000, the profit margin per gram remains the same, but per dollar investment doesn’t come down by half. That is the reason we are facing this challenge. I believe things will settle down, and people are looking at it from a different perspective today. Even the customers understand that it is costing them the amount of manufacturing, and also they are not bargaining as much as they used to,” added Chandu Siroya.
Aditya Singh, head of International Jewellery Business at Titan Company, also emphasized that surging rent is a huge challenge as it’s a suppliers’ market from a real estate perspective.
“It is one of the biggest challenges of the industry, specifically because the mall inventory is controlled by very few players,” he said on the sidelines of the launch of a new Tanishq store in Meena Bazar in Dubai.
Source: www.khaleejtimes.com