Harry Winston has no plans to sell its retail business just now, but eventually will separate it from the company.
“We don’t have any great pressure to dispose of the diamond luxury retail business,” said CEO Bob Gannicott on a Dec. 7 conference call following its financial results. “It’s not a particularly good time to contemplate doing that anyway.… There is no business reason, really, to separate these two business.”
However, he added, “I had always thought, with the evolution of time, with [the retail arm] getting to the point where it could stand on its feet, that it could be separated as a separate public company. But clearly that time is not now. It still requires further investment, and it still needs to get through at least another year.… In the fullness of time it will certainly either become separated or else be sold to someone that could do better with it than we would be able to.”
Earlier this year, there were reports that Harry Winston was selling its jewelry retail division. The company denied those reports.
Gannicott also said the company has seen improvement in the important diamond markets of the United States and Japan.
“The diamond market has recovered its poise after a relatively prolonged declined after the heights of 2008,” he said. “It is now a healthier market.… We don’t expect rapid near-term rises in rough diamond prices, but we do believe a corner has been turned, in an industry where demand is clearly poised to outstrip supply.”
Highlights of Harry Winston’s financial results for the third quarter of fiscal 2013 (ended Oct. 31, 2012):
- Consolidated sales: Up 51% to $180.4 million
- Operating profit: $10.3 million, compared with last year’s operating loss of $2 million
- EBITDA: Up 64% to $34.8 million
- Luxury brand segment sales: Up 14% (17% at constant exchange rates) to $95.6 million
- Luxury brand unit sales: Up 8%
- Operating profit for the luxury brand segment: Up 265% to $5.3 million
- Rough diamond sales: Up 134% to $84.8 million