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Leibish & Co

Monday, May 21, 2012

Graff’s IPO May Reach $1 Billion

The Graff Diamonds store on New Bond Street, London.

Arguably the most exclusive jeweler in the world, Graff Diamonds, is shopping its IPO as it prepares for a June 8 listing on the Hong Kong Stock Exchange. According to reports, the diamond jeweler to the 0.1 percent of the 1 percent is expecting to raise $1 billion, which would value the retailer, and diamond and jewelry producer at $3 to $4 billion.

The London-based firm, known for its luxury diamond jewelry and for its owner’s penchant to buy some of the world’s most expensive gemstones, is expecting to raise $25 - $37 Hong Kong dollars ($3.22 - $4.76) per share, according to reports.

Laurence Graff, Graff Diamonds founder and chairman, and Francois Graff, CEO, met potential investors Monday, according to reports.

The money raised will primarily be used for expansion of the Asian retail network, development of Graff as an "iconic brand" (isn’t it already an iconic brand?) and developing the watch business, according to reports. The company currently has a network of more 30 stores, including five in China.

Graff Diamonds said it made $623.5 million in retail sales last year compared with $454.3 million the year before. However, a total of 20 customers accounted for 40 percent of its sales for the past three years. The company is also one of the few that have a mine-to-market operation that includes sourcing its own diamonds and gemstones and making its own jewelry.

The success of the IPO will not only be based on investors belief in the strength of the company, but their assessment of the increased growth among the world’s wealthy, particularly in China.