Harry Winston reported that consolidated sales were flat at $216 million in the fourth fiscal quarter that ended on January 31, 2012 as its retail performance slumped during the period, which included Christmas. Group profits grew 21 percent to $16.6 million.
Higher rough prices helped boost mining revenues. The company’s mining segment, which includes a 40 percent stake in the Diavik mine in Canada, saw sales increase 24 percent year on year to $102.2 million. Average prices rose 9 percent year on year to $120 per carat and firmed from price deterioration in the third quarter. The mining unit recorded operating profits of $27.4 million, a year-on-year surge of 53 percent.
“Our own rough diamond prices have now stabilized at levels approximately 20 percent above the beginning of the year and resumed a steady growth in many categories,” said Robert Gannicott, the chief executive officer of Harry Winston. “This is consistent with the trends that we see in the luxury brand business where strong demand for watches has propelled not only our own timepiece orders but also the pricing of small diamonds that are used throughout the watch industry.”
Gannicott added that retail sales showed strength during the year in the bridal and collection jewelry sections, which the company has target as vital to its expansion plans in China and in established markets in the U.S.
Harry Winston’s retail sales fell 15 percent to $113.8 million during the quarter. Sales in North America dropped 11 percent to $41.5 million and in Asia, excluding Japan, sales slumped 66 percent to $17.3 million as a significant transaction a year earlier was not repeated in the current quarter. Sales in Japan rose 21 percent to $23.8 million and in Europe they almost doubled to $31.2 million. The retail business had operating profits increase 28 percent to $6.8 million.
For the full year, group sales rose 13 percent to $702 million while profits slumped 46 percent to $25.5 million. Cost of sales rose 16 percent to $452 million, while expenses increased 15 percent to $193.6 million.