Harry Winston Diamond Corporation—the Canadian-based luxury jewelry retailer and diamond miner that owns jewelry retailer Harry Winston Inc. and has a 40% stake in the Diavik diamond mine in Canada—has reported heavy losses in its third quarter. The $4.7 million net loss (6 cents a share) of Q3 is attributed to a drop in demand for rough diamonds. The company’s diamond sales were down 40 percent from the end of the same quarter last year which saw a net gain. The mining segment has reported 40% lower sales, while luxury brand sales have risen by about 4.1%.

“Challenging trading conditions returned to the diamond business internationally in the third quarter,” said Robert Gannicott, chairman and chief executive officer of Harry Winston. 

The company said it chose not to sell as much product from its Diavik diamond mine in the last quarter, claiming it would wait until prices were more favorable. The company does not expect sales to meet production and is planning on seeking new rough diamond buyers from stronger markets and focusing on long-term growth strategies. The lack of credit available to diamond manufacturers may prove an obstacle, however.

On October 31, 2011 Harry Winston Diamond Corporation was in possession of 1.1 million carats of rough diamond inventory with an estimated value of $123 million. Harry Winston’s retail division—which generates the bulk of its revenue— saw a growth in sales of about 4 percent, however, adding to the phenomenon of luxury retailer gains in the jewelry and watch segment despite the volatile economy.  To capitalize on the current trend of luxury retail gains, Harry Winston is planning on opening two salons in Shanghai in London next fiscal year.

 

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