LONDON — Net profits at De Beers SA fell 9.7 percent during the six months to June to $316 million, compared with earnings of $350 million in the same period last year.
De Beers said the profit decline was largely due to an increase in the tax rate this year compared with the previous year, and one-off charges associated with its class-action settlement agreement in the U.S. Underlying earnings during the period, which stripped out the effect of tax and one-off items, rose 8 percent to $350 million, from $324 million.
Sales rose 10 percent in the six months to June 30 to $3.74 billion, from $3.4 billion in the same period last year. De Beers said the rise in sales was thanks to an increase in demand for rough diamonds from its Diamond Trading Company clients, which has enabled the company to raise the prices of rough diamonds. Of total sales, $3.3 billion came from rough diamonds, while the remainder were industrial diamonds and supplies of rough diamonds to non-site holders through the group’s subsidiary Diamdel.
De Beers said it had also seen high double-digit sales growth at De Beers Diamond Jewelers, the joint venture with LVMH Moët Hennessy Louis Vuitton. The increase was driven by demand for higher-end and bridal diamond jewelry and store openings in cities including Dallas and Tokyo, in the Ginza district. The company added that it aims to have around 50 stores open by the end of 2008. Sales at De Beers Diamond Jewelers are not included in the figures De Beers SA reports.
Despite the rise in sales, and what the company described as a “robust” demand for high-end diamonds, Gareth Penny, managing director of De Beers, said the firm is taking a cautious view of the second half in light of a dip in demand for less valuable diamonds in the U.S. “We are obviously living in uncertain times, and that requires a more cautious outlook,” said Penny during a conference call. “Mass market retail jewelry sales have been impacted by economic issues, particularly in the U.S. While there has been strong growth in China, India, Russia and the Middle East, [that] has helped to mitigate, the overall retail market is likely to remain challenging for the mass market end of the business.”
Diamond production at De Beers fell 4.1 percent during the period to 24.2 million carats, due to factors including power cuts in South Africa during the fourth quarter, plans to cease production at some of its smaller mining companies and adverse weather conditions at its Venetia mine in South Africa. The company said it plans to open three diamond mines during the course of 2008 — The Snap Lake and Victor mines in Canada later this month and the Voorspoed mine in South Africa, which will open in November. De Beers chairman Nicky Oppenheimer described these openings as “a record for De Beers.”
“The world’s an uncertain place at the moment, and to be able to produce the first half we have is really very encouraging,” said Oppenheimer. “We certainly don’t see any sign of demand for the better quality goods declining. The fact that we’re building new mines emphasizes De Beers’ commitment to the future.”
De Beers will also launch its Forevermark diamond brand in Hong Kong and China in the fourth quarter and in South Africa, Japan, India and Taiwan in the first half of 2009. “We believe that there is immense potential behind this brand,” said Penny.
Natural resources conglomerate Anglo American plc owns 45 percent of De Beers SA, while 40 percent is owned by the Oppenheimer family and 15 percent by the Botswana government.
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion
Eighty degree temperatures and outdoor installations at the annual Art Basel Miami Beach called for bright, elevated beachwear. See more street style pictures on WWD.com. #theyarewearing #ABMB (📷: @lifeinreverie)
Following September’s emotional tribute to her brother Gianni, Donatella Versace wanted to bring the spring show’s deep sense of intimacy to her @versace_official pre-fall collection. Donatella found inspiration in Versace Palazzo in Milan and from Gianni’s opulent apartment. Archival patterns and new motifs were splashed on silk shirtdresses and fitted jersey frocks. See the rest of the photos on WWD.com. #wwdfashion
Demna Gvasalia continues to shake up the Paris fashion calendar — and experiment with new runway timetables for his @vetements_official brand. WWD has learned that Vetements plans to stage its next coed show for the fall 2018 season on January 19 during Men’s Fashion Week in the French capital. Details about the timing and venue have not been confirmed — stay tuned on WWD.com to catch the latest. #wwdnews (📷: @giovanni_giannoni_photo)
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)