Harry Winston Rough Diamond Sales -40% in Q3December 11, 11
The firms' rough diamond sales totaled $36.2 million, a 40 percent decrease from $60.7 million in the comparable quarter of the prior year. The company's 40 percent share of production increased by 8 percent to 0.8 million carats.
Harry Winston sold 0.2 million carats of rough diamonds at an average price $159 p/c, compared to 0.6 million carats at $95 p/c sold in the comparable quarter of the prior year.
The price difference is primarily the result of the stockpiling of some lower priced diamond assortments which currently face competition from the recent sale of stocks of similar quality
Mining segment EBITDA was $16.7 million in the quarter compared to $24.9 million in the prior year, posting an operating loss of $3.3 million.
Retail sales were $83.5 million compared to $80.2 million in the third quarter of the prior year, an increase of 4 percent or a decrease of 4 percent at constant exchange rates.
The luxury brand segment generated EBITDA of $4.5 million and an operating profit of $1.3 million in the third quarter 2012 compared to EBITDA of $8.6 million and operating profit of $5.4 million in the comparable quarter of the prior year.
The decreased operating profit is a result of the seasonal increased marketing expenditure leading into the holiday season and expenses related to the anticipated opening of new salons in
The company does not expect sales to meet production. Having made very limited sales to rough diamond clients in October and November, the company intends to seek new buyers in December. However, the lack of credit available to diamond manufacturers continues to constrain the industry, the company warned.
For the luxury brand segment, the company continues to focus on strategies that will drive long-term growth. These strategies include initiatives to grow the core bridal and watch businesses and new jewelry collections.