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Graff Diamonds’ Profit Slumps 74% in 2015

May 24, 2016 10:32 AM   By Rapaport News
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Graff Diamonds Limited, the U.K. subsidiary of Graff Diamonds Holdings, reported sales slid and profit nosedived last year as tougher market conditions in the global gem industry hit the high-end London-based jeweler.

Revenue fell 32 percent to $500.2 million and profit for the year plummeted 74 percent to $32.1 million in 2015, Graff Diamonds said in a filing to the UK’s Companies House, a registrar for businesses. Revenue from countries outside the U.K. plummeted 34 percent to $464.1 million, outweighing an 11-percent jump in domestic sales to $36.1 million.

Revenue for Graff Diamonds Holdings, which includes the group’s international businesses, was $723 million.

“Emoluments” for the company’s highest-paid director dived 31 percent to $6 million, according to the earnings statement.

The slide in sales and profit – for a company that gets 93 percent of its revenue from outside the U.K. – comes amid lower demand for diamonds around the world and a dampening of consumer sentiment in Hong Kong and China.

Gerrard, another upmarket London jeweler, reported a 20-percent sales slump and a 25-percent fall in international revenue in the year to March 31, 2015, and saw profit nosedive 98 percent. While large Europe-based luxury groups such as LVMH and Richemont posted higher jewelry revenue in their latest fiscal years, the larger Hong Kong-headquartered jewelers including Chow Tai Fook, Luk Fook and Chow Sang Sang have mostly seen a significant reduction in sales.

Graff declined to comment on its results when contacted by Rapaport News over and above the chairman’s statement and company report. Laurence Graff, the jeweler’s chairman, claimed in the report the financial results were ”robust.”

“Despite economic challenges in some regions where we operate, we have delivered robust financial results at the Graff Diamonds Holding Group level by managing our inventory levels whilst maintaining investment on profitable long-term developments,” Graff (pictured left, with chief executive officer Francois Graff) said.

The directors are “satisfied” with the results, Bryan Bamberger, Graff Diamonds’ company secretary, added.

The company introduced new outlets in 2015 in Nagoya, Japan, at Studio City in Macau and on the promenade in Gstaad, Switzerland. It also enlarged its presence at Harrods, the London department store, and said stores that opened in 2014 in Zurich, Hong Kong and Japan “continued to trade successfully.” Further stores are scheduled to open in 2016 at the Place Vendôme in Paris, at the Wynn Palace in Macau and at Saks in Houston, Texas.

It also added a franchise partner in Cyprus last year and will open a franchise store in Melbourne in “early 2016.” The company now trades from 50 locations worldwide.
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Tags: Graff Diamonds, jewelers, Laurence Graff, Rapaport News, results, retail, retail sales, U.S. Sales
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