Aber Diamond Corp. plans to expand its retail diamond business rapidly over the next three to five years through its majority interest in luxury jeweler Harry Winston Inc., the Canadian Press reports
The Toronto-based miner, which holds a 51% interest in the celebrity jeweler and a 40% interest in the Diavik diamond mine, told investors Thursday it plans to expand the Harry Winston chain to 25 stores from the current nine.
Winston, which reported sales of $41.6 million in the first quarter, has already opened two new boutiques since Aber bought a controlling interest in 2004.
“A brand like Harry Winston has much broader recognition than a name like Aber, including the equity marketplace,” Aber CEO Robert Gannicott reportedly told investors at the company’s annual meeting in Toronto. “Mines are depleting assets, their ore reserves eventually run out. The value of a luxury retailer is in its ability to sell things at high prices and volume to a broad customer base, and it can do that forever.”
The expansion will be in markets where the Harry Winston name is already recognized – namely the United States and Japan – as well as “emerging” markets in India, China, Russia, and the Middle East, Aber president Thomas O’Neill, who is also CEO of Harry Winston, reportedly said at the meeting.
Aber is also opening an office in Mumbai, India, which executives say is a first for diamond producers.
Aber supplies rough diamonds to the global market through its 40% stake in the Diavik diamond mine, off Lac de Gras in the Northwest Territories. Rio Tinto of London is the majority owner and operator.
Aber then asks its clients, who polish the gems and re-sell them, to supply Harry Winston with diamonds and gems—which may come from other suppliers like DeBeers or BHP Billiton.
The remaining stake in the retailer is held by a private equity firm and Ronald Winston, one of the founder’s sons.
Earlier Thursday, Aber posted a $10.8 million jump in first-quarter profits on production increases at Diavik.
The company said net earnings for the quarter ended April 30 were $13.6 million on sales of $110 million.
That compared with a profit of $2.8 million on sales of $52 million in the year-earlier period.
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