De Beers CEO, Al Cook, says diamond sales over the key holiday season, are proving surprisingly stronger than expected.
Speaking at the FACETS diamond conference in Antwerp, Belgium on Tuesday, Cook said early indications were that retail demand for diamond jewellery was warmer than the diamond giant had expected this season.
Traditionally for De Beers, the period between Thanksgiving in the United States and the Chinese New Year in January, represents the strongest sales period for diamond jewellery. The diamond giant annually focuses its marketing efforts on this holiday season, spending upwards of $100 million annually to create demand.
This year, the holiday season marketing is more critical than ever, as De Beers and the broader natural diamond industry need higher sales to reduce the glut in the retail market that has caused a prolonged downturn in the industry, forcing producers such as Botswana to sharply reduce output this year.
“We are positively surprised by what we are seeing in this holiday season,” Cook told the conference. “We are seeing signs of a holiday period that will be probably above the expectations that we had. “In India, we have seen a stronger holiday season than we thought, although China remains a black spot.”
The CEO cited data from diamond retail market watchers such as Tenoris which showed jewellery sales up seven percent year-on-year in October. Another firm, Edge, noted a 15% increase in sales amongst independent jewellers in the United States, as well as a nine percent increase in prices.
“That speaks about the desire of the US consumer to buy higher priced natural diamonds,” Cook said.
Independent jewellers are a key sales channel for diamond jewellery in the US, as well as a bellwether on the health of the retail end for major producers such as De Beers.
Cook added that the positive sentiment was being seen elsewhere.
“In India we have seen double digit growth this year as well as a strong holiday season thus far,” he said.
The diamond retail market has been experiencing subdued demand since the second half of last year, causing the mid-stream, which consists of cutting and polishing firms, to build up high inventories. These high inventories have in turn required producers such as De Beers and Debswana to cut production.
From an initial target of as much as 32 million carats at the beginning of the year, De Beers revised its maximum output this year to 29 million carats, then in July lowered this to 26 million carats. Debswana produces about two-thirds of De Beers’ annual output.
Traditionally for De Beers, the period between Thanksgiving in the United States and the Chinese New Year in January, represents the strongest sales period for diamond jewellery. The diamond giant annually focuses its marketing efforts on this holiday season, spending upwards of $100 million annually to create demand.
This year, the holiday season marketing is more critical than ever, as De Beers and the broader natural diamond industry need higher sales to reduce the glut in the retail market that has caused a prolonged downturn in the industry, forcing producers such as Botswana to sharply reduce output this year.
“We are positively surprised by what we are seeing in this holiday season,” Cook told the conference. “We are seeing signs of a holiday period that will be probably above the expectations that we had. “In India, we have seen a stronger holiday season than we thought, although China remains a black spot.”
The CEO cited data from diamond retail market watchers such as Tenoris which showed jewellery sales up seven percent year-on-year in October. Another firm, Edge, noted a 15% increase in sales amongst independent jewellers in the United States, as well as a nine percent increase in prices.
“That speaks about the desire of the US consumer to buy higher priced natural diamonds,” Cook said.
Independent jewellers are a key sales channel for diamond jewellery in the US, as well as a bellwether on the health of the retail end for major producers such as De Beers.
Cook added that the positive sentiment was being seen elsewhere.
“In India we have seen double digit growth this year as well as a strong holiday season thus far,” he said.
The diamond retail market has been experiencing subdued demand since the second half of last year, causing the mid-stream, which consists of cutting and polishing firms, to build up high inventories. These high inventories have in turn required producers such as De Beers and Debswana to cut production.
From an initial target of as much as 32 million carats at the beginning of the year, De Beers revised its maximum output this year to 29 million carats, then in July lowered this to 26 million carats. Debswana produces about two-thirds of De Beers’ annual output.
