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Collectors Universe exiting grading business

Fate of AGL remains unclear

March 03, 2009

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Newport Beach, Calif.--The company that owns both the Gem Certification and Assurance Laboratory (GCAL) and the American Gemological Laboratory (AGL) is getting out of the business of grading diamonds and gemstones, it announced on Monday.

Following the announcement, GCAL President Don Palmieri issued a statement that The Palmieri Group, the founder of the lab, is purchasing GCAL and keeping it up and running.

The deal includes the purchase of the lab and "certain intangible assets used in GCAL's business, including its name," from Collectors Universe, according to a statement issued by The Palmieri Group.

Palmieri will maintain his position as GCAL president, and the lab will continue to offer diamond-grading services uninterrupted from its offices on Fifth Avenue in Manhattan, pending the signing of the purchase agreement.

The fate of the AGL, however, remained unclear at press time.

Newport Beach, Calif.-based Collectors Universe Inc.--which deals in the valuations of collectibles including stamps, coins and autographed sports memorabilia, in addition to owning both GCAL and AGL--announced it was exiting the jewelry business due to what company CEO Michael Haynes cited as "uncertainties" about the future of the business brought on by the global economic crisis.

Collectors Universe saw jewelry-grading revenues fall 25 percent in the second quarter ended Dec. 31, 2008.

"The continuation and possible extension of these economic conditions has led us to conclude that it is unlikely these businesses will be able to achieve the goals we had established for them when we first acquired those companies," Haynes said. "As a consequence, management and the board of directors have decided to exit the jewelry businesses, which will enable us to give full attention to and focus our significant resources, energy and liquidity on our core businesses in collectibles, where we have decades of experience and a proven record of success."
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