LONDON — The world’s diamantaires have begun rebuilding their rough diamond inventories and driving prices back to 2008 prerecession levels, De Beers said in reporting a 74.1 percent rise in sales and a return to profitability in the first half.
De Beers Societe Anonyme said Friday it was looking to the second half with “caution and measured optimism.” It said with most of this year’s rough diamond restocking largely completed, any further growth would come from consumer demand.
The diamond company said there was double-digit growth in consumer demand in China and India in the first half, and those markets were showing no signs of flagging.
A De Beers spokeswoman in London said overall there had been “a marked improvement” in consumer confidence since last year and a “noticeable improvement” in demand from the U.S. market.
De Beers Diamond Jewelers, the retail joint venture with LVMH Moët Hennessy Louis Vuitton, witnessed a “healthy rebound,” according to the company, and a clutch of new collections is set to be unveiled in September.
The spokeswoman said Forevermark, the premium diamond brand De Beers is selling through 289 doors in China, Hong Kong and Japan, has rung up retail sales of $150 million since the launch in 2008. The brand has plans to expand further in Mainland China, where it is present in 10 cities.
With regard to rolling out Forevermark globally, the spokeswoman said De Beers is “making the first steps to assess the U.S. market,” and a number of other key markets, although no launch dates have been set.
In the six months to June 30, De Beers profits rose to $348 million, compared with a $6 million loss in the corresponding period last year. In 2009, the company reduced its cost base by 45 percent and staffing levels by 25 percent as part of a draconian efficiency drive in the wake of the global financial crisis.
Overall sales rose 74.1 percent to $2.98 billion from $1.71 billion. Sales of rough diamonds at the Diamond Trading Company, the marketing arm of De Beers, rose 85.7 percent to $2.60 billion from $1.40 billion.
De Beers also said company veteran Gareth Penny would step down later this year after five years as chief executive officer. A search is on for his successor, with chief financial officer Stuart Brown and chief commercial officer Bruce Cleaver serving as acting joint ceo’s in the interim.
Nicky Oppenheimer, chairman of De Beers Group, said the company’s decision to cut costs and tighten operations and “take short-term pain for long-term gain” was paying off.
“With renewed demand driving significant increases in production, prices and sales, we are now focused on securing the recovery while insulating the business from further market volatility,” he said.
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