Jewelers mixed on pursuing De Beers settlement

Cooper and Binkley Jewelers in Brighton, Mich., generated interest in the De Beers settlement among its customers by alerting a local newspaper to the story.

Though jewelry storeowners nationwide are eligible, it is unclear how many will step forward to claim their slice of the De Beers class-action settlement.

Some say it involves too much paperwork for too little money, while others take the attitude that it's worth a shot.

Of the 10 retailers interviewed by National Jeweler, four planned on filing claims, two did not, and four were undecided.

"I frankly think it's a waste of everybody's time," says Fred Nasser of the Antiques Gallery Midwest in Sioux Falls, S.D. "If you [think you're] getting $5 a diamond, you're probably overly optimistic."

He adds that the attorneys are probably the only ones who will profit.

Meanwhile, jeweler Richard Huntington of Huntington Jewelers in Las Vegas, says he already has his office manager gathering up the paperwork necessary to file a claim.

"I have no clue if we're going to get anything at all," he says. "If it's worthwhile doing, you don't know until [after] you do it."

The notice and claims process to divide up the $295 million De Beers settlement fund began Jan. 9, with a hearing set for mid April to determine if the settlement gets final approval. May 19 is the deadline to file a claim.

The fund is the result of a series of class-action lawsuits alleging De Beers charged anti-competitive prices for rough diamonds, monopolized the market and disseminated false and misleading advertising.

The settlement fund will be divided between two classes, direct and indirect purchasers, with the majority of retail jewelers and consumers falling into the latter class.

Indirect purchasers are those who bought diamonds from someone other than De Beers or one of its mining competitors. The settlement applies to diamonds purchased between Jan. 1, 1994, and March 31, 2006.

How much retailers and consumers will receive depends on the number of claims.

Industry analyst Ken Gassman says research shows that more than 130,000 retailers are eligible for a refund.

As for consumers, the exact number is unknown, but statistics show about 1.8 million diamond engagement rings are sold annually in the United States, and in 2006, about 47 million pieces of diamond jewelry were sold.

Gassman says he expects very few people to file claims.

"There is too much required to get a rebate, and too little money, probably," he says, estimating that payouts could be as low as $1 for every $1,000 spent, in the unlikely event that every eligible person claimed a rebate.

While retailers' opinions on applying for the settlement vary, most jewelers who were interviewed by National Jeweler report few if any customer inquiries.

One exception is Barb Binkley of Cooper and Binkley Jewelers in Brighton, Mich. As a service to the customers of her 60-year-old family-owned jewelry store, Binkley says she sent a press release to the local newspaper, the Livingston County Press and Argus, which ran a story on Jan. 25 alerting readers that De Beers could owe them money.

The article set off a tidal wave of consumer inquires, with Binkley estimating, at press time, that she had given out claim forms to 110 customers who were interested.

She keeps extra copies of the forms on hand in her store, and is offering to print the buying history for any of the 35,000 customers in the company's database who are interested in filing a claim.

Binkley says she considers herself and her husband to be "ambassadors" for the jewelry industry in this bedroom community located about 60 miles from Detroit.

"We feel like we should be the answer person for jewelry in this area," Binkley says.
Source: nationaljewelernetwork

Oppenheimer calls U.S. subprime woes 'worry'

The U.S. subprime mortgage crisis is causing concern in the diamond industry due to the high volume of "lower-quality, cheaper diamonds" sold here, De Beers Chairman Nicky Oppenheimer said in a recent interview with Mining Weekly.

But, demand for higher-quality stones continues in the United States, unaffected by the turbulence in the housing market.

"America remains 50 percent of the diamond jewelry worldwide offtake and, in that 50 percent, America has a disproportionate element of the somewhat lower-quality, cheaper diamonds, so that's a real worry there," he told the South Africa-based publication. "The balance is the better-quality diamonds, which seem to be remaining in demand, and that's obviously helped by the very strong growing demand in Asia."

Overall, Oppenheimer said, the economic volatility worldwide "is not good for us."

He said the dramatic strengthening of the Canadian dollar has negatively impacted DeBeers' business in that country while, conversely, the weakening of the rand in South Africa has helped De Beers, which sells its diamonds in U.S. dollars.

In the same interview, De Beers Consolidated Mines (DBCM) Managing Director David Noko said the company is working to negate the impact the power crisis in South Africa is having on De Beers' output.

A 10 percent impact on production is forecast, with DBCM budgeting production of 12.7 million carats in 2008, compared with 15 million in 2007. This lower estimate, Noko said, is due to the sale of some of DBCM's assets, not the power crisis.

Also, De Beers Group Managing Director Gareth Penny said the Diamond Trading Co. (DTC) continues forming local DTCs in Botswana, Namibia and South Africa.

A total of eight De Beers retail stores launched in 2007, pushing the total to 23 globally, and De Beers plans to double the number of stores in 2008.
Source: nationaljewelernetwork

De Beers Diamond Sales Down 3% in 2007

De Beers Group reported Friday that diamond sales declined 3 percent in 2007 to $6.42 billion. Total sales for the company also fell 3 percent for the year to $6.86, which includes a 2.5 percent increase in non-diamond sales to $414 million.

The South African-based company, which is majority owned by London-based Anglo American PLC, said it recorded a net loss of $521 million for 2007 against a profit of $730 million the year before. The figure includes a $965 million charge against its Canadian operations to reflect the rise in value of the Canadian dollar; and higher fuel, labor, and capital costs.

The company, which claims 40 percent of the world diamond market, said underlying earnings rose 14 percent to $483 million. EBITDA fell slightly (1 percent) to $1.21 billion "as effective cost management at the Group’s African mining operations offset the impact of slightly lower sales which were constrained by supply to the Diamond Trading Company," De Beers said.

The company said capital expenditures rose 18 percent to $1.12 billion in 2007, primarily for the construction at the Snap Lake and Victor mines in Canada, the Voorspoed mine in South Africa, and an offshore mining vessel in South Africa.

Demand for rough diamonds from the Diamond Trading Company remained healthy throughout the year, De Beers said. Following the weakening in the rough diamond market towards the end of 2006, which led to downward price adjustments, improving market conditions allowed prices to be increased beginning in the second quarter of 2007.

De Beers noted it expects consumer sales of diamond jewelry worldwide to increase by about three percent in 2007, based on strong sales growth in China, India, and the Middle East, which, in part, offset a disappointing Christmas season in the U.S.

De Beers said its independently managed retail joint venture with Louis Vuitton Moet Hennesy, De Beers Diamond Jewellers, increased sales by 44 percent over the previous year. Eight new stores were opened in 2007 in the U.S., Japan, Dubai, and Korea, bringing the total to 23 stores worldwide. There will be more expansion in 2008 in the U.S., Hong Kong, Russia, the Middle East, and Tokyo markets.

De Beers tempered its outlook for 2008 based on "a high level of uncertainty over world market conditions. The economic conditions in the U.S. could continue to impact consumer diamond jewelry sales through the first half particularly at the lower end."

The company expects continued strong demand from China, India and the Middle East for larger and better quality diamonds.

On the production front, De Beers said energy issues in southern Africa could present operational challenges. The company recently had to stop its mining operations in South Africa due do nationwide power shortages.

It said that its De Beers Consolidated Mine operation has been making good progress toward a target of a 15 percent energy reduction by 2012. In addition, it is putting in place contingency plans that will make the most effective use of the available energy between the different operations. Early indications are that even if the power supply is maintained at 90 percent levels there will be an impact on the overall group. However below this level the impact on production will be significant.

The company said its De Beers Canada management team is focused on bringing the two new mines into full production in 2008. It added that it has continued to monitor the impact of the increase in the Canadian dollar.

De Beers said the current mining environment requires "a continued focus on cost containment on the mines and cost reduction, in general."

Looking beyond 2008, De Beers said "it is confident about diamond market fundamentals. With strong growth in the emerging markets of China, India and Russia, demand growth should exceed growth in new supply with the opportunity for future price growth."

De Beers said it will focus on "finding and developing the new mines of the future, assisting our government partners in achieving their aspirations for local value addition, finding new efficient ways to operate the global Group and developing innovative marketing initiatives such as De Beers Diamond Jewellers and the FOREVERMARK, to drive demand and create new revenue streams."
Source: jckonline

De Beers cuts U.S. marketing budget

De Beers is cutting its U.S. marketing budget, forcing the layoff of 11 employees working on the Diamond Trading Co. (DTC) account at advertising firm JWT.

Sally Morrison of the Diamond Information Center confirmed to National Jeweler that the cutbacks are related to the perception that the United States is headed into a recession, and that 2008 is expected to be a tough year for everyone.

As a result, De Beers is refocusing its efforts to concentrate on the male consumer; the company's "beacon" products, such as Journey diamond jewelry and three-stone rings, won't include anymore female-targeted advertising.

Morrison confirmed that the loss of advertising would be counteracted by more public relations.

She also confirmed that those employees impacted were not senior level.

The news is the latest in a string of bad news for the jewelry industry as a whole, as De Beers always has been known for its robust advertising campaigns.

U.S. holiday sales for the majority of jewelry retailers, including the usually bulletproof Tiffany and Co., were down in 2007, and two chain retailers recently entered into bankruptcy.

Boston-based Alpha Omega Jewelers is seeking Chapter 11 protection, and creditors for Addison, Texas-based Friedman's Inc. have filed a petition to force the struggling company into Chapter 7.
Source: nationaljewelernetwork

De Beers opens fifth U.S. store

The De Beers store at Tysons Galleria in Washington, D.C.

De Beers marked the opening of its fifth U.S. retail location on Nov. 23 at Tysons Galleria in Washington, D.C.

The opening of the 2,082-square-foot store is the latest development in De Beers' entrance into the North American retail market, and its third U.S. store to open this year. In 2005, De Beers stores opened in New York and Beverly Hills, Calif., and two more stores opened this year in Las Vegas and Houston, Texas.

The store includes new collections designed by De Beers Creative Director Raphaele Canot, including Ice on Fire, Secrets of a Rose, Talisman and Radiance.

Bridal, high-end jewelry and signature collections such as Wildflowers will also be available at the Washington, D.C., store.

In addition to a variety of merchandise, the store includes De Beers Beauty Scan imaging, which offers customers an up-close look at how diamonds reflect light; engraving of a serial number on each diamond more than 0.3-carats, known as the De Beers Marque, and the De Beers Passport, a document that verifies that each diamond is "natural, conflict and child-labor free, enhancement and treatment free."
Source: nationaljewelernetwork

De Beers Donates to Namibia Mining School

De Beers said it will provide N$2.1 million ($313,658) to enable the Namibia Institute of Mining & Technology to acquire the buildings for its Northern Campus in Tsumeb.

NIMT is Namibia’s premier institution for artisan training. In its first year, the Northern Campus enrolled 64 students and this number is expected to grow to 214 by 2009. This is the second NIMT campus, with the main one in Arandis.

De Beers chairman Nicky Oppenheimer and minister of Mines and Energy Errki Nghimtina officiated at the inauguration ceremony.

During the event, Oppenheimer announced the creation of the De Beers Namibia Fund through which De Beers will support Corporate Social Investment in Namibia. He noted that NIMT was, in fact, the first beneficiary of the new De Beers Namibia Fund.
Source: jckonline

De Beers to open jewelry store in Moscow's GUM in Nov

South Africa's De Beers, the world's largest diamond producer, plans to open a jewelry store in Russian shopping mall GUM in early November, the company said in a January-June report, Russian business daily Vedomosti reported Wednesday.

Teimuraz Guguberidze, the managing director of GUM, which is located in Moscow, confirmed the information that De Beers planned to open a store with an area of about 40 square meters in November.

The store will be managed by De Beers’ Russian partner, he said without naming the partner.

No other details were provided.

In 2001, De Beers set up a joint venture for retail sales, De Beers Diamond Jewelers, with Louis Vuitton Moet Hennessy. The company opened its first store in London in 2002.

In 2007, De Beers Diamond Jewelers plans to open 15 stores worldwide.
Source: prime-tass

De Beers sales down 7 percent

De Beers reported total group sales were $3.4 billion for the first half of 2007, down 7 percent from $3.66 billion for the same time period in 2006.

Diamond Trading Co. (DTC) sales were down $265 million.

The company said sales were impacted by increased difficulties in sourcing supply and a price correction in the rough-diamond market in the second half of 2006.

In a conference call, De Beers Managing Director Gareth Penny said the primary reason for the sourcing challenge was the decreased Russian supply. The company said it was analyzing the judgment reached by the Court of First Instance in July that annulled the European Commission's decision to accept De Beers commitments to cease buying rough from Alrosa after 2008.

Consumer demand for diamond jewelry remained healthy, and the company said trading conditions and rough-diamond prices improved through the period.

Underlying earnings reached $324 million, up 5 percent from $308 million, due primarily to the favorable impact of a reduction in net finance charges and tax credit. Net earnings dropped from $520 million to $350 million for the period.

Expectations for the second half were upbeat, with consumer demand in emerging markets and the high-end compensating some weakness in the lower-end/mass market in the United States.

"The high-end remains strong and other growth markets, such as China and India, robust," the company stated.

Growth in diamond-jewelry demand is expected to be in the four percent to five percent range for the full year. Rough demand is good and prices are rising, though the expected improvement in second-half sales could be constrained by availability, the company said.

"In the medium term, the positive supply/demand forecast should lead to continued growth in rough-diamond prices which will, together with increased production as our four new mines come fully on stream, drive growth in revenues and earnings for the group," De Beers stated.
Source: nationaljewelernetwork

De Beers Diamond Jewellers U.S. names COO

Hamida Belkadi, the new COO of De Beers Diamond Jewellers U.S.

New York—De Beers Diamond Jewellers has announced the promotion of Hamida Belkadi to chief operating officer of De Beers Diamond Jewellers U.S., effective July 1.

Belkadi, who has been with the company since March 2005, helped to establish its U.S. operations as vice president of sales and marketing. She has been serving as acting chief executive officer for De Beers in the United States since the departure of Alyce Alston at the end of March.

Prior to joining De Beers, she spent 18 years with Cartier, where she held various senior-level positions and established a proven record in the retail jewelry business.

Belkadi is a member of the New York State Bar Association and holds a graduate degree from Columbia Law School and the University of Paris II.

De Beers Diamond Jewellers U.S. continues its search for a CEO. In the interim, the company says it is confident that its operations will run successfully under the leadership of its department heads and with Belkadi as COO.

Source: nationaljewelernetwork