AuctionsMay 16, 2024
Christie’s Holds 2 Sales Despite CyberattackThough its website has been down for a week, Christie’s proceeded with its jewelry and watch auctions on May 13-14, bringing in nearly $80 million.
SourcingFeb 22, 2019
De Beers’ Sales Rise but Earnings Sink
The company warned that the global diamond jewelry market “faces a number of headwinds” in 2019.
A variety of colored diamonds of “a good quality and comparatively high value” recovered by De Beers (Namdeb) off the coast of Namibia. The company sold less rough by volume but for a higher average realized price in 2018. (Image © PMP/ De Beers 2011)
London—De Beers’ sales increased in 2018 but profits tumbled due to the money it spent on initiatives like Lightbox and Tracr, its blockchain platform.
Parent company Anglo American reported Thursday that total revenue for De Beers Group in 2018 rose 4 percent year-over-year to $6.10 billion, compared with $5.84 billion in 2017.
The company sold less rough by volume—31.7 million carats vs. 32.5 million carats in 2017—but for a higher average realized price, $162 per carat to $171 per carat, as sales of lower-value diamonds dropped off in the second half of the year.
Revenue classified as “other,” which includes industrial diamond arm Element Six (the company making the diamonds for Lightbox, the lab-grown jewelry line) and De Beers’ jewelry stores, also increased due to improved sales of high-end pieces at De Beers Jewellers, though Element Six’s sales were down 5 percent due to a drop-off in demand for industrial diamonds from the oil and gas market.
Underlying EBITDA fell 13 percent, from $1.44 billion to $1.25 billion.
De Beers said while it maintained unit costs and upstream profit margins, the money it spent to launch Lightbox Lightbox, blockchain platform Tracr and GemFair, its pilot program for tracking diamonds mined artisanally or on a small scale, ate into profit as did increased expenditure in marketing, exploration and evaluation in Canada.
De Beers said worldwide, preliminary data indicates consumers bought more jewelry in dollar terms in 2018, with the first half of the year finishing particularly strong.
However, demand slowed in the second half due to increased “political and policy uncertainty” and volatility in the stock market. This mirrors what jewelers told National Jeweler at the recent Centurion show—that business dropped off in December after the stock market took a dive.
De Beers also noted that the midstream sector of the market—diamond cutters and polishers—had a difficult second half due to weak demand for and surplus availability of lower-priced rough, the rapid depreciation of the rupee and inability to get bank financing.
In 2019, it said while current economic forecasts remain positive, consumer demand for diamond jewelry globally “faces a number of headwinds,” including escalating trade tensions between the United States and China, and further exchange rate volatility.
RELATED CONTENT: Nirav Modi Case Is ‘Another Nail in the Coffin’Production-wise, De Beers mined 35.3 million carats of rough in 2018, rising 6 percent from 2017 but falling at the low end
Editors' Picks
Sponsored by
of the production prediction for the year (35-36 million carats).
Botswana remained De Beers’ top-producing nation by far, pumping out 24.1 million carats of diamonds, up 6 percent from 22.7 million last year due in part to the restart of operations at Damtshaa.
Production fell 10 percent in South Africa, from 5.2 to 4.7 million carats, while rising in both Canada and Namibia.
In Canada, De Beers mined 4.5 million carats of diamonds last year, up from 3.8 million in 2017 due to the full-year contribution from the new Gahcho Kué mine and the last push of production at Victor, which is slated to close in the first half of this year.
Production in Namibia totaled 2.0 million carats, up from 1.8 million carats in 2017.
Looking ahead to 2019, De Beers said it expects production to be lower, in the range of 31 to 33 million carats, subject to trading conditions.
More of De Beers’ production will come from the mines in which it has joint venture partners in 2019, and it also will see production drop off at the Venetia mine in South Africa as it scales back ahead of the closure of the open-pit portion of that operation.
Botswana remained De Beers’ top-producing nation by far, pumping out 24.1 million carats of diamonds, up 6 percent from 22.7 million last year due in part to the restart of operations at Damtshaa.
Production fell 10 percent in South Africa, from 5.2 to 4.7 million carats, while rising in both Canada and Namibia.
In Canada, De Beers mined 4.5 million carats of diamonds last year, up from 3.8 million in 2017 due to the full-year contribution from the new Gahcho Kué mine and the last push of production at Victor, which is slated to close in the first half of this year.
Production in Namibia totaled 2.0 million carats, up from 1.8 million carats in 2017.
Looking ahead to 2019, De Beers said it expects production to be lower, in the range of 31 to 33 million carats, subject to trading conditions.
More of De Beers’ production will come from the mines in which it has joint venture partners in 2019, and it also will see production drop off at the Venetia mine in South Africa as it scales back ahead of the closure of the open-pit portion of that operation.
More on Sourcing
The Latest
AuctionsMay 16, 2024
Sotheby’s Withdraws 101-Carat Yellow Diamond from AuctionDespite the absence of “The Allnatt,” Sotheby’s Geneva jewelry auction totaled $34 million, with 90 percent of lots sold.
ColumnistsMay 16, 2024
The PR Adviser: What the Designer Should’ve DoneLilian Raji gives advice to designers on how to make the most of great publicity opportunities.
Brought to you by
Record Gold Prices Have Consumers Undeterred. Here’s Why.Despite the rising prices, consumers continue to seek out the precious metal.
ColumnistsMay 15, 2024
Squirrel Spotting: Why Retailers Struggle to Fire BrandsWhy do so many jewelers keep lines that are not selling? Peter Smith thinks the answer lies in these two behavioral principles.
Weekly QuizMay 16, 2024
This Week’s QuizTest your jewelry news knowledge by answering these seven questions.
AuctionsMay 15, 2024
Red Diamond Breaks Records at Phillips GenevaThe “Argyle Phoenix” sold for more than $4 million at the auction house’s second jewels sale.
Events & AwardsMay 15, 2024
See Who’s in JA’s 2024 ‘20 Under 40’ ClassThe annual list recognizes young professionals making an impact in jewelry retail.
Brought to you by
From Registration to Return: 10 Tips to Protect You Before, During and After a TradeshowTradeshow risks are real. Get tips to protect yourself before, during and after and gain safety and security awareness for your business.
IndependentsMay 15, 2024
David Mann Jewelers in Upstate NY to Close After 35 YearsOwner David Mann is heading into retirement.
FinancialsMay 15, 2024
Brilliant Earth’s Sales Fall Flat in Q1 While overall sales were sluggish, the retailer said its non-bridal fine jewelry was a popular choice for Valentine’s Day.
AuctionsMay 14, 2024
2 Huge Yellow Diamonds Are Heading to AuctionChristie's is selling one of the diamonds, moving forward with its Geneva jewelry auction despite the cyberattack that took down its website.
MajorsMay 14, 2024
Platinum Born Taps ‘Born Leaders’ for New CampaignThe ad aims to position platinum jewelry as ideal for everyday wear.
GradingMay 14, 2024
Instappraise Adds Trifold Brochure to Appraisal OfferingsRetailers can customize and print the appraisal brochures from their store.
Lab-GrownMay 13, 2024
Lab-Grown Diamond Brand Lightbox Cuts Prices by 25 to 40%The move follows a price-drop test run in Q4 and comes with the addition of a “quality assurance card” from GIA for some loose diamonds.
TechnologyMay 13, 2024
Christie’s Website Brought Down by Hackers, Watch Auction Postponed The site has been down since Thursday evening, just ahead of its spring auctions.
AuctionsMay 13, 2024
Madeleine Albright’s Jewelry, Pins a White-Glove Sale at Freeman’s | HindmanThe late former U.S. Secretary’s collection went for quadruple the sale’s pre-sale estimate.
IndependentsMay 13, 2024
Zachary’s Jewelers Names Mother’s Day Jewelry Contest WinnersThree fifth graders’ winning designs were turned into custom jewelry pieces in time for Mother’s Day.
IndependentsMay 10, 2024
Frank Adams Jewelers Names New CEOKimberly Adams Russell is taking over the role from her father, David Adams, marking the third generation to hold the title.
CollectionsMay 10, 2024
Piece of the Week: Carina Hardy’s ‘Birth of Venus’ NecklaceAs a token of womanhood, this necklace depicts when Venus was born from the sea.
MajorsMay 09, 2024
Watches of Switzerland Pays $130M for Roberto Coin Inc.The deal gives the retailer control over the distribution of Roberto Coin jewelry in the U.S., Canada, Caribbean, and Central America.
TrendsMay 09, 2024
Amanda’s Style File: Shine Bright, Moms Show your mother some love with a piece of fine jewelry.
IndependentsMay 09, 2024
Kyle Edward Fine Jewelry to Close Salisbury StoreThe company’s Easton location will remain open.
MajorsMay 09, 2024
JBT Elects New ChairmanBrian D. Fleming of Carla Corporation was elected to serve a one-year term in the role.
Supplier BulletinMay 08, 2024
Fusing Past and Present at the Las Vegas Antique Jewelry & Watch ShowSponsored by the Las Vegas Antique Jewelry and Watch Show
EditorsMay 07, 2024
Q&A: Author Vikki Tobak on the ‘Ice-Cold’ ExhibitionTobak, author of “Ice Cold: A Hip-Hop Jewelry History,” shares how the exhibition came to be, and the pieces people may be surprised to see.
EditorsMay 07, 2024
10 On-Theme Looks from the 2024 Met GalaStars adorned themselves in emeralds, platinum, and myriad bird motifs, writes Associate Editor Natalie Francisco.
IndependentsMay 07, 2024
112-Year-Old New Orleans Business Popping Up in Aspen M.S. Rau is set to open a seasonal gallery in the high-end resort town early next month.
