Harry Winston’s first-quarter retail sales grew 27.4 percent, thanks to strength in Asia and Europe, but expenses and lower-margin sales led to a widening of operating losses.
This story first appeared in the June 5, 2008 issue of WWD. Subscribe Today.
The retailer’s operating loss for the quarter more than doubled to $2.4 million from $1.1 million a year ago. Sales for the three months ended April 30 grew to $74.7 million from $58.6 million.
Sales in Asia shot up 52 percent to $18.1 million as European sales jumped 42 percent to $31.7 million and turnover in the U.S. inched up 2 percent to $24.9 million.
“First-quarter sales in our retail segment were particularly strong as our strategy to build market share through a growing network of salons and strengthening our watch business progressed,” said Thomas J. O’Neill, president of Harry Winston Diamond Corp.
However, gross margins were pulled down by a rise in high dollar value transactions, which are less profitable; increased raw material costs, and, in the watch business, greater research and development spending.
The mining concern, which acquired the Winston fine jewelry business in 2004 and was previously known as Aber Corp., saw its consolidated earnings shoot up to $21.3 million, or 35 cents a diluted share, from $3.3 million, or 5 cents a share. Sales rose 10.4 percent to $156.1 million from $141.4 million in the year-ago quarter.