De Beers: We Want Diamond Advertising to Double

De Beers wants the industry’s spending on advertising to double by the year 2004, managing director Gary Ralfe told analysts following the publication of the company’s financial results.

“That means … generating or leveraging an additional $200 million of quality trade advertising spending,” he said. “There are important initiatives by some of our clients to launch new brands where we will obviously help as well.”

Ralfe also announced that U.S. retail sales of diamond jewelry fell as much as 5% in 2001 but stressed that the numbers were just a “preliminary estimate.” Although U.S. retail sales slipped 7% in the first half of 2001, the fourth quarter was better than expected, logging a marginal 1% jump.

According to Ralfe, 2001 Christmas sales were helped by two factors: heavy discounting and the American mood since Sept. 11, in which diamonds, “representing commitment and family values, seem to have found a niche.”

Ralfe noted that diamond imports into the United States fell substantially more than retail sales because retailers felt they had enough inventory and were cautious about reorders.

Overall, worldwide sales of retail diamond jewelry fell 5% in 2001. The dip in retail sales hurt the company’s rough diamond sales, which fell 22% in 2001 to $4.54 billion, from $5.7 billion in 2000. The company’s profits were down as well—to $837 million in 2001 from $1.7 billion the year before.

A De Beers statement noted that the trade was beginning 2002 in a “more optimistic mood,” with low rough stocks in the cutting centers.