Graff Diamonds, the London-based jeweler known for some of the world’s most expensive diamond jewelry, is planning to raise as much as $1 billion via an initial public offering, possibly in Hong Kong, according to a person familiar with the situation.
The family-owned company hasn’t yet settled on Hong Kong as a listing location, but it is focused on the market, the source said, adding that proceeds from the listing will likely be used for expansion in the region. Asia is Graff’s fastest-growing market and the jeweler has stores in Hong Kong, Beijing, Shanghai, Tokyo and Taipei. The company plans to open additional stores next year in Macau and Hangzhou, China. Read About Graff's West Coast Expansion Here >>
The group is expected to post sales of about $800 million in 2011. Rothschild is advising on the listing, and an industry source said Graff went to the book runners, or lead underwriters, Wednesday. A Graff spokesman in London declined to comment.
“This is yet another example of a Western brand seeking to list its shares on a Far Eastern stock market where it believes that it will not only achieve a higher valuation, but it will also gain good p.r. in an increasingly important market for its products,” said Chris Searle, corporate finance partner at London accountants BDO LLP.
“It’s another sign of the shift in economic power to the high-growth Far East from the stagnant West,” added Searle. “Although the U.S. is still the largest market for diamonds, it can’t be too long before it will be overtaken by China. It thus makes sense for a company like Graff to list in Hong Kong, which has seen a boom in listings recently. Whether the path forged by Graff is followed by diamond producers remains to be seen given London’s attraction for mining companies.”
Graff’s decision comes on the heels of another megadeal for the diamond industry. On Friday, Anglo-American revealed its purchase of the Oppenheimer family’s 40 percent stake in De Beers. The $5.1 billion purchase boosts Anglo American’s stake in the diamond mining company to 85 percent, and consolidates its ownership at a time when demand for diamonds is flourishing.
Founded in 1960 by Laurence Graff, Graff Diamonds is an ultra high-end jeweler, with a particular focus on rare gems.
Hong Kong is becoming something of the exchange of choice for luxury retailers as Asian consumers become increasingly important. CLSA Asia-Pacific Markets estimates China alone will account for 44 percent of the global luxury market by the year 2020, becoming a $101.4 billion market. Analysts say listing in Asia, particularly Hong Kong, can be a savvy marketing move.
“The investment community in Asia would welcome more luxury goods, and in this case, superluxury goods like Graff. As more than 50 percent of global luxury sales are to Asians now and growing to two-thirds in the next few years, it makes sense to list here [in Hong Kong] so the company can be closer to their customers and help further boost brand awareness,” said Aaron Fischer, an analyst at CLSA.
Graff is following in the footsteps of some other luxury brands, such as Milan-based Prada SpA, which raised nearly $2.5 billion in its Hong Kong listing earlier this year, and U.S. luggage maker Samsonite, which raised $1.25 billion in a Hong Kong listing in June.
Others are expected. Coach Inc. is eyeing the Hong Kong market, where it is planning a secondary offering to give Chinese investors an opportunity to invest in the company. High-Italian motorbike maker Ducati is reportedly considering an IPO here, while Hong Kong’s largest jeweler, Chow Tai Fook, which is owned by tycoon Cheng Yu-tung, is reportedly preparing a $3 billion to $4 billion IPO in the city sometime next year.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)