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Rapaport Weekly Market Comment
February 3, 2012
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Far East diamond demand restrained but strong gold demand spurs jewelry sales during Chinese New Year. Belgian polished suppliers hold prices firm despite weak trade at Antwerp Diamond Fair. Rough premiums improve but confusion remains over DTC box values. Prices stable at Petra Diamonds tender as company reports 1H revenue +13% to $101M, production +64% to 953,553 Cts. LVMH 2011 sales +16% to $31B, profit +22% to $7B. Titan Industries 3Q sales +25% to $493M, profit +19% to $33M. Japan’s Dec. polished diamond imports +28% to $67M, 2011 imports +17% to $814M.
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| RapNet Data: Feb. 2 |
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| Diamonds |
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876,821 |
| Value |
$5,765,455,921 |
| Carats |
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908,635 |
| Average Discount |
-26.49% |
www.rapnet.com
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Get Current Price List | Subscribe to Rapaport | Join RapNet |
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QUOTE OF THE WEEK
Whether people are planning to get engaged, or just celebrate the holiday with flowers and a night out, consumers are telling us they can open their wallets a little wider for Valentine's day. We've seen a consistent trend of consumers saying they will spend more, from holiday shopping to travel plans and spending plans for February 14 are no exception.
Sonali Chakravorti | American Express
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Careers@Rapaport
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The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants, and entry level positions for our offices in New York, Antwerp, Mumbai, Dubai, and Shanghai. To get on the fast track, email your resume to careers@rapaport.com.
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INDUSTRY
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Chinese New Year Jewelry Sales +16%
Chinese consumers celebrated the Year of the Dragon and drove retail sales higher by 16.2% year on year to $74.6 billion during the traditional New Year Golden Week. The country’s Ministry of Commerce reported jewelry sales grew 16.4% during the week, which began January 23, with gold bars, gold ingots and other dragon-themed jewelry ranking among the favorite items.
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Jewelry Spending Surveys Point Higher
Watch Full Coverage. Surveys from American Express, Sears, and the National Retail Federation (NRF) point to strong jewelry sales leading up to Valentine's Day, February 14. Of those who celebrate the holiday, consumers plan to spend $126.03, up 8.5% from 2011, according to the NRF, and 19% of consumers plan to buy jewelry. American Express determined that 15% of consumers intend to buy jewelry for Valentine's Day and also shared what consumers felt to be resonable price ranges for engagement rings. Sears, which boosted its jewelry offerings for February 14, found that 40% of those in a relationship intend to get engaged on Valentine's Day.
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RETAIL & WHOLESALE
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LVMH Revenue +16%, Profit +22%
Luxury group LVMH’s revenue rose 16% year on year to $31.2 billion during 2011 and profit jumped 22% to $7 billion. Specifically for the watches and jewelry segment, revenue nearly doubled to $2.6 billion in large part due to the integration of Bulgari. LVMH reported that organic revenue, which reflects comparable-store sales and exchange rates for the watches and jewelry segment rose 23%. LVMH watch and jewelry brands continued sustained growth across all geographies.
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Titan's 3Q Sales +25%, Profit +19%
Titan Industries Ltd. reported that net sales rose 25% year on year to $493.3 million during its third fiscal-quarter that ended on December 31, 2011. Net profits grew 19% to $33.1 million Titan's jewelry sales increased by 25% to $401.6 million while sales at its watch division rose 17% to $77.5 million.
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Shantivijay Jewels 3Q Sales -20%
Shantivijay Jewels Ltd. reported that group net sales fell 20% year on year to $3.2 million during its third fiscal-quarter that ended on December 31, 2011. Net profit slumped 48% to $63,438 as interest expense rose 201% to $48,103 and other income declined 22% to $29,49. Total expenditures fell 20% to $3.1 million during the quarter.
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Renaissance Jewellery Sales -2% in 3Q
Renaissance Jewellery Ltd. reported that net sales fell 2% year on year to $69.8 million during the third fiscal-quarter that ended on December 31, 2011 as jewelry and diamond revenues declined. However, net profits increased by 40% to $4.4 million during the quarter largely due to lower expenses. The company’s jewelry segment sales declined 12% to $62.7 million and sales at its diamond business fell 43% to $5.8 million.
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Brooke Burke Partners with Chad Allison
Television personality Brooke Burke will launch a jewelry line with the label ''Brooke Burke Collection by Chad Allison.'' Her partnership with the brand created 30 jewelry styles consisting of bracelets, pendants, earrings, and rings in black and white diamonds and colored gems in gold and sterling silver. The pieces will retail from $149 to $3,000 and Chad Allison targets a distribution channel of 700 doors across the U.S. The official launch for Burke is planned for Luxury by JCK in May.
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GENERAL
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Antwerp Hosts Third Annual Diamond Trade Fair
The Antwerp Diamond Bourse and the Diamond Club of Antwerp hosted the third edition of the Antwerp Diamond Trade Fair (ADTF), as diamond buyers from Europe, the Middle East and Turkey visited the booths of some 70 Antwerp diamond firms. Many exhibitors noted a sizable delegation of Middle Eastern buyers at the fair, from countries such as Saudi Arabia and Lebanon, who were seeking high-end goods in the form of large, loose diamonds and jewelry. Raphael Rubin, a member of the ADTF's organizing committee, also revealed that buyers from North America, China and Southeast Asia would be invited to take part in the 2013 fair.
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Zale Promotes Brumfield to SVP
Ken Brumfield has been appointed senior vice president of financial products for Zale Corporation. He will be responsible for all customer financing, warranty, insurance and repair product offerings, and will to report to Matt Appel, Zale’s chief administrative officer. Prior to joining Zale in September 2010, Brumfield was a director of sales at Alliance Data Systems and a senior vice president of credit services at Stage Stores Inc.
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Cavalieri Receives Award of Order of Carl Faberge
CIBJO's president, Gaetano Cavalieri, received the Award of the Order of Carl Faberge at a ceremony held February 1 in St. Petersburg, Russia, during the opening of the International Jewellery Forum, JUNWEX Petersburg 2012. The awards committee of the Carl Faberge Memorial Foundation said it was honoring Cavalieri for his contribution to the preservation and maintenance of the art of jewelry, as well as for the substantial part he has played in the development of the jewelry industry. The Order of Carl Faberge is an initiative of Tatyana Fedorovna Faberge, the great granddaughter of the famous jeweler, and was envisioned by its founders to become a Russian equivalent of the Nobel Prize.
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STATS
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Japan
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Dec. |
%Chng. |
2011 |
%Chng. |
| Polished imports |
$67M |
28% |
$814M |
17% |
| Price per carat |
$479 |
76% |
$401 |
41% |
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MINING
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Petra Diamonds Revenues +13%
Petra Diamonds' revenue rose 13% year on year to $101.4 million in the first fiscal-half of 2012 as production grew and rough markets stabilized. The company reported that group production grew 64% to 953,553 carats during the six months that ended on December 31, 2011 due to the addition of the Finsch mine, which Petra bought from De Beers for $192 million. The company noted that while jewelry sales during the Christmas season in the U.S. and Europe registered only modest growth, strong increases continued in emerging markets.
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Stellar Diamonds Releases Interim Results
Stellar Diamonds reported, in an interim financial statement for six months that ended in December, that it held $1 million in cash reserves and approximately $600,000 in rough diamonds in inventory that were ready for sale. The company spent approximately $4.2 million developing the Droujba, Guinea and Tongo, Sierra Leone diamond resources.
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Paragon Diamonds Raises Nearly $3M
Paragon Diamonds Limited completed a placement of 5,948,275 new ordinary shares at 29 pence each on London's Alternative Investment Market (AIM) and raised gross proceeds of approximately $2.71 million. The new shares will rank pari passu with existing ordinary shares, and dealings on AIM are expected to commence in the new ordinary shares next Wednesday, February 1.The company's issued share capital now consists of 194,125,329 ordinary shares of 1 pence each.
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ECONWATCH
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Diamond Industry Stock Report
Stocks traded more calmly this week and were mostly on the upside. Biggest movers were Birks & Mayors (-10%), Charles & Colvard (+14%), Scio Diamond (-8%), Chow Tai Fook (-9%), Ren. Jewellery (+11%), Lucara (+21%), Stornoway (+11%). Read the extended industry stock report for this past week.
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Feb. 3 |
Jan. 26 |
Chng. |
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| $1 = Euro |
0.760 |
0.760 |
0.000 |
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| $1 = Rupee |
49.03 |
50.11 |
-1.1 |
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| $1 = Israel Shekel |
3.72 |
3.76 |
-0.04 |
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| $1 = Rand |
7.67 |
7.79 |
-0.12 |
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| $1 = Canadian Dollar |
0.99 |
1.00 |
-0.01 |
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| Precious Metals |
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| Gold |
$1,759.50 |
$1,721.60 |
$37.90 |
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| Platinum |
$1,626.00 |
$1,609.00 |
$17.00 |
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| Stock Indexes |
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Chng. |
| BSE |
17,431.85 |
17,077.18 |
354.67 |
2.1% |
| Dow Jones |
12,707.08 |
12,735.63 |
-28.55 |
-0.2% |
| FTSE |
5,796.07 |
5,793.10 |
2.97 |
0.1% |
| Hang Seng |
20,739.45 |
20,439.14 |
300.31 |
1.5% |
| S&P 500 |
1,325.54 |
1,318.45 |
7.09 |
0.5% |
| Yahoo! Jewelry |
1,098.16 |
1,099.45 |
-1.29 |
-0.1% |
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INDIA MARKET REPORT
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Polished and rough trading activity
The polished market is already slow and demand is further reduced. Rough diamond sellers hold firm on prices. Read the full report.
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