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Leibish & Co
Thursday, September 2, 2010
Harry Winston Reports Strong Retail and Rough Diamond Sales
Harry Winston Diamond Corp. reported Wednesday that consolidated sales increased 62 percent to $153.7 million for the second quarter in a year-over-year comparison. Earnings for the period, ended July 31, were $28.9 million, compared to a loss of $3.9 million for the same quarter of the prior year.
Rough diamond sales rose 89 percent to $86.8 million for the quarter, year-over-year, according to the vertically integrated company with assets in a diamond mine along with luxury retail stores. The increase in sales was a result of a combination of a 62 percent increase in rough diamond prices and a 17 percent increase in volume of carats sold during the quarter.
Retail sales increased 37 percent to $66.9 million for the second quarter. U.S. sales increased 31 percent to $19.6 million, sales in Europe increased 40 percent to $24.7 million, and sales in Asia increased 40 percent to $22.6 million. Earnings from operations of $2.3 million for the quarter compare favorably to a loss of of $5.6 million, in the same quarter of the prior year.
Rough diamond production for the three months ended June 30, was 0.65 million carats, which was 14 percent higher than the comparable quarter of the prior, the company said. Production in the same quarter last year was unusually low, due to the planned lower volume of ore mined that reflected the softness in the rough diamond market last year.
Consolidated net income for the second quarter was $16.5 million, compared to a net loss of $24.5 million in the second quarter of the prior year.
“This quarter has demonstrated the continued recovery in the international diamond business and it has also shown additional improvement from our own business segments,” said Robert Gannicott, Harry Winston chairman and CEO. “Both mine production and rough diamond sales increased in parallel with the growth in retail sales from our network of international stores particularly at the high end. We expect further growth in retail sales supported by renewed marketing efforts as customers seek out true craftsmanship.”
The company also announced Wednesday that it appointed David Carey, president of Hearst Magazines, to its board of directors. Prior to joining Hearst, Carey was group president at Condé Nast, where he served as a member of the company's executive committee and co-lead on all business development efforts, and in other positions at Condé Nast since 1995.
Harry Winston Diamond Corp. has assets in the mining and retail segments of the diamond industry. It supplies rough diamonds to the global market from its 40 percent ownership interest in the Diavik Diamond Mine. The company's retail division is a diamond jeweler and luxury timepiece retailer with salons in key locations, including New York, Paris, London, Beijing, Tokyo, and Beverly Hills.
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I am a freelance writer and editor who covers the luxury jewelry and watch industry for several publications, including Forbes.com the Financial Times, Hong Kong-based JewelleryNetAsiaand the Italian jewelry magazine, VO+. In addition, I have my own blog covering the jewelry and watch industry, Jewelry News Network.