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Brand News: Forevermark Surpasses 2,000 Doors; De Beers Reports Lower Production, Higher Revenue February 22, 2017 (0 comments)
Forevermark Passes 2,000 Global Retail Doors
London, United Kingdom—Forevermark, the diamond brand from The De Beers Group of Companies, this week announced it has passed 2,000 retail doors globally, following the opening of the Zen Diamond Anatolium store in Bursa, Turkey. Editor’s note: A separate release from De Beers’ parent company Anglo-American this week lists the total number of Forevermark doors worldwide at 2,010.
The opening of the 2,000th Forevermark retail door follows a strong 2016 for the brand, which saw the following milestones: a 14% increase in door numbers; expansion into three new markets, Hungary, South Korea and Thailand; and a 21% year-on-year increase in inscription numbers.
Since the launch of the Forevermark brand in 2008, it has grown to 25 markets worldwide. De Beers’ 2016 investment in the brand was US $85 million spent on consumer-facing marketing activities to help stimulate global demand for diamond jewelry. Left: An ad featuring the brand's "Ever Us" two-stone product.
Stephen Lussier, CEO of Forevermark, said, “Opening our 2,000th global retail door around eight years after launching the brand is an amazing achievement. We will continue to invest significantly in the brand to support its fast growth. In 2017 we will inscribe our two millionth Forevermark diamond, highlighting just how strong demand is for diamond jewelry that’s not only beautiful and individual, but also responsibly sourced. Meanwhile, we will also expand further through our licensee model in Western Europe and Asia in 2017, meaning that the Forevermark promise will reach even more consumers around the world.”
Emil Güzeliş, Zen Diamonds chairman, said the company established its exclusive licensee partnership for the Turkish market in 2014 and now has 54 Forevermark doors in the country. “It’s a young but very popular brand and offers real opportunity to engage consumers with diamonds in different ways. The product message is very strong and our customers are responding very well to the jewelry designs as well as the diamonds themselves.”
De Beers’ Year End Financials: Production, Prices Down; Revenue And Sales Volume Up
Gaborone, Botswana—In its year-end financial statement for 2016, De Beers posted a slight drop in total carats produced, but a significant jump in sales volume by carats.
In millions of carats, production dropped from 28,692 in 2015 to 27,339 in 2016. But sales volume jumped by 10 million carats, from (in millions) 19,945 in 2015 to 29,965 in 2016. Revenue in millions shot up from $4,671 to $6,068, which translated into a 42%, or $500 million, jump in EBITDA from $990 to $1,406 (in millions) year-on-year. By EBITDA, De Beers’ was Anglo-American’s third-highest producing category behind coal (1,646) and iron ore and manganese (1,536.)
Sustained diamond jewelry demand growth in the United States coupled with marginally positive growth for the year in China (in local currency, though declining slightly in U.S. dollars) contrasted with weakening demand in the other main diamond markets. In India, a month-long jewelers’ strike in March and the government’s surprise demonetization program that started in November had a considerable negative impact on demand. For the full year, global consumer demand, in U.S. dollars, is estimated to be in line with 2015. Additional marketing in the United States, China, India, and Japan in the final quarter of the year, the main selling season, had a positive impact.
Producers destocked during 2016, as sentiment in the midstream improved and rough and polished inventories normalized, supported by a series of initiatives put in place by De Beers starting in the second half of 2015. These included lowering rough prices, providing flexibility to Sightholders for their purchase arrangements, and increased marketing activity to drive consumer demand.
De Beers’ Forevermark brand continues to expand its retailer network and is available in 2,010 outlets (a 14% increase) in 25 markets. In June 2016, Forevermark launched the Black Label collection of fancy-shape diamonds and, in the final quarter of the year, launched a U.S. national television campaign featuring the trademarked Ever Us two-stone diamond collection. In the first half of 2016, De Beers also invested in category marketing campaigns to stimulate diamond jewelry demand during key gifting periods in both China and Hong Kong, as well as India, the latter in partnership with the Gem & Jewellery Export Promotion Council (JEPC), commencing in the second half of 2016. In the third quarter, The Diamond Producers Association, co-funded by De Beers and other leading producers, launched “Real is Rare,” a new marketing platform targeting millennial consumers in the United States.
De Beers Diamond Jewellers, the joint venture between LVMH Moët Hennessy Louis Vuitton and De Beers, maintained its focus on fast-growing markets, with 34 stores in 17 key consumer markets around the world. The significant growth in mainland China sales helped to offset the impact of lower Chinese tourist levels in France and Hong Kong, while the highlight of the year was the successful relocation in November of the New York flagship store to a new location on Madison Avenue, completing the repositioning of the brand in the United States.