Why going for gold pays off

Heather Tomlinson meets the jeweller who is taking on the big boys... and winning

Entrepreneurs often succeed by spotting a market that is not being served and then launching a product right at it. So when Pravinchandra Bhagwanji, the head of BCPMS Europe, saw an opportunity in the jewellery and metals market, he jumped at the chance, and he has reaped the benefits ever since.

Mr Bhagwanji and his wife, Meeta, are the fourth generation to have worked in the industry, although it had previously been on a smaller scale. They had been running a small jewellery shop in Wembley since 1985. Around four years ago, they noticed that there was a market for wholesaling jewellery to the small, local jewellery shops around the UK.

BCPMS buys products from the Far East and Italy and sells it on to smaller clients, particularly in London and the Midlands. The large retailers like H Samuel are avoided because they have tougher credit and return policies, but this has not hindered the growth. BCPMS initially catered just for the Anglo-Asian market, but soon realised that the products might have a wider appeal and now have a significant base of customers across the whole spectrum of British life.

Mr Bhagwanji says that his products are mainly fashionable rather than classic, but are all in 22-carat gold, silver or platinum, and can be hand made or machine made. The prices range from £25 to £20,000.

After its humble beginnings in the UK, the company has expanded abroad in the past three years. It sells to small retailers in most European countries, as well to the US and South Africa.

BCPMS has also launched a bullion business in the same period of time. This arm of the company sells precious metal bars and grains to small jewellery workshops and manufacturers.

The market was previously dominated by large companies who were unwilling to deal in small amounts and had limited opening hours. BCPMS offers a seven-day, nine o'clock to nine o'clock service that therefore caters for the smaller client. Mr Bhagwanji says that this is the key to the company's success in every area – tailoring the product for the client, and beating the service of the opposition.

Mr Bhagwanji has spotted a similar market need to refine gold and silver for the smaller client, and intends to launch into this trade in the near future.

Although the company has grown significantly, in the year to January 2002 the group profits fell, mainly due to the investment required for the bullion business. The profits fell from £346,000 to £181,000. But at the same time, turnover was up from £21m to £27m. The bullion trade has smaller margins than those of rings and necklaces, and is also subject to the whims and fancies of the prices in international metal markets, so future results could also vary.

But the results of the year before show how successful the expansion into the Continent and into the different products has been. Then, the company was only pulling in £9m in sales and £84,000 in profit.

Mr Bhagwanji has always shown signs of being an entrepreneur, selling books and even empty cans at the tender age of 10. Although he used to travel around the world for his job, he now leaves that to others in the business. However there are only 10 employees at the company, who are still based in the company's original home of Wembley. Soon they will move to the home of cheap and cheerful airlines: Luton, where the low-cost airline Easyjet is based, another small company that has seen phenomenal growth. Perhaps the effect will rub off on the BCPMS, although the jewellery company may not need the help.