More Than a Store
Galaxy was founded in 1930 by Mr. Icky Kurgan, under the name of I Kurgan & Co (Pty) Limited, a significant supplier to all major jewellery retail chains in South Africa. By 1970 Galaxy became the major supplier of diamond jewellery to the jewellery chain store industry throughout South Africa. The gold price spiked resulting in high commodity prices which resulted in a drop in unit sales forcing jewellery retailers to cut orders dramatically. Kurgan & Co, in an effort to keep the factory production going, responded to this downturn by opening its own retail outlets; Galaxy & Co.
The intention was to fill the factory by putting a diamond ring on every South African girl’s finger and making diamond jewellery accessible to the masses. As Galaxy became a serious retail threat, American Swiss Jewellers (Pty) Limited, then the dominant mass jeweller in the market, closed its manufacturing account with I Kurgan & Co in 1990. This meant that almost all of the manufacturing capacity of the factory was being taken up by the retail side of the business and I Kurgan & Co / Galaxy & Co had become a fully vertically integrated manufacturing and retail operation.
The Mr Price Group felt that the Galaxy & Co “value” formula would fit well in the Mr Price Group stable and in early 1996, the Mr. Price Group bought Galaxy from the founding shareholder and Galaxy became a wholly owned subsidiary of Mr. Price.
Galaxy & Co was awarded the Proudly South African ‘Retailer of the year’ in 2004. In 2005 the incumbent management team purchased the business from Mr. Price.
Sales of luxury goods came under a lot of pressure from the last quarter of 2007. It really intensified with the collapse of the financial markets as well as the rising gold price (39% year-on-year). This resulted in Galaxy closing down its manufacturing concern and outsourcing its production, focusing entirely on its retail operations.
Galaxy & Co today is the largest independent jewellery retail chain in Southern Africa with a national footprint of 80 stores situated in every major shopping centre and high street location throughout the country with 3 stores in Namibia. The Namibia stores are held by a wholly owned subsidiary of Galaxy in the form of Galaxy Jewellers Africa (Pty) Limited.
Galaxy specialises in selling quality fine jewellery, predominantly in the diamond ring categories, supported by contemporary ranges of gold and silver jewellery and international watch brands. The styling is modern, up to date and inspirational, yet pieces are reasonably priced.
Galaxy’s products are of an international standard and a dedicated quality control protocol exists to ensure consistent quality is delivered. All gold is carat assayed and checked and all gems are to European Gemological Society (“E.G.L”) standards. Galaxy is a member, and upholds the values of, the Jewellery Council of South Africa (“JCSA”).
Galaxy also complies with the requirements of the Kimberley Process, aimed at ensuring that all diamonds have been purchased from legitimate sources not involved in funding of conflict, in compliance with the relevant United Nations Resolutions.
Each store site is carefully selected with the basic “envelope” being 60m2 with approximately 8 meters of shop front in an “A” trading position in the centre.
Galaxy caters for the mid to upper socio-economic market, thereby targeting individuals in LSM 6 to 10 which makes up around 40 to 45% of the South African population. The brand positioning is one of “connecting you to those you love, always.
Other key strengths include a value mentality, a well positioned logistics and distribution operation and the ability to create a price differential below their competitive set.
All of the above positions Galaxy as a serious competitor in the South African retail and consumer jewellery market, dominated by 4 players.The other companies operating in this space are American Swiss, Sterns and NWJ. All these players have been operating in the South African market for at least 50 years and high barriers to entry have prevented any new entrants.