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DIAMOND AND LUXURY PROFITS SOAR IN FIRST HALF OF 2011 July 28, 2011 (1 comment)

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London, UK—De Beers more than doubled its net profits in the first half of 2011, from $255 million to $694 million, according to this article in the London Financial Times. This gives its new chief executive, Philippe Mellier, time to plan, he told the paper, a luxury not enjoyed by either his predecessor Gareth Penny or by other CEOs. Mellier, a French auto executive with no experience in either diamonds or mining, began this week. The profits were achieved under the interim leadership of Stuart Brown and Bruce Cleaver, acting co-CEO’s until Mellier’s arrival. De Beers’ share of the overall diamond market has shrunk to about 35%, said the FT; its production now is about equal with Alrosa, the Russian company that is its biggest competitor. This report by JCK’s Rob Bates indicates the company plans more diamond price increases; this report in National Jeweler details its plans as well.

Paris, France—LVMH Moet Hennessy Louis Vuitton posted a 25 % increase in profits for the first half of 2011, confirming the strength of the luxury sector, says a report in Women’s Wear Daily. Among first-half activity was LVMH’s $6 billion deal to absorb the Italian jeweler Bulgari; the merger was cleared by the European Commission last month. For the six month period ending June 30, net profits rose to $1.84 billion from $1.39 billion a year ago. Other European luxury brands, including Hermes and Burberry, also showed strong double-digit increases, said WWD.

New York—The Luxury Institute in May released its 2011 Luxury Status Brand Index for jewelry, watches, and cars costing more than $100,000. Consumers earning more than $200,000 annually were asked to rank brands according to quality, exclusivity, social status, and overall ownership experience. The top three jewelry brands were Graff, Buccellati, and Asprey London; the top watch brands were Blancpain, Rolex, and Vacheron Constantin. Among autos, the top brands were Maybach, Bentley, and Bugatti Veyron, a brand which, at $2.6 million per car, is far more exclusive than the luxury standards like Mercedes and BMW.

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