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