De Beers' sales up 10 percent

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De Beers' sales up 10 percent

July 23, 2008

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London—Total sales increased 10 percent in the first half of the year for the De Beers Group, but the diamond giant is approaching the second half of the year with caution due to weakness in the U.S. market, the company reported on Wednesday.

In what De Beers Group Chairman Nicky Oppenheimer described in a Webcast as a "very satisfactory, pleasing first half," total sales rose to $3.74 billion, up from $3.40 billion in the first half of 2007.

This increase included a 10 percent climb in sales of rough by the Diamond Trading Co. (DTC) arm of De Beers. The DTC recorded $3.3 billion in sales. Client demand, De Beers said, has enabled the DTC to continue to steadily increase prices.

The company's retail division, De Beers Diamond Jewellers, also experienced double-digit sales growth over 2007, driven by purchases of high-end pieces and bridal.

The company now has 32 stores worldwide, including eight in the United States, and De Beers Group Managing Director Gareth Penny said the company would be moving "toward the 50 mark by year-end."

Despite De Beers' gains in the first half, Penny acknowledged that economic issues, particularly in the United States, have impacted mass-market retail sales.

And, despite growth in China, Russia, India and the Middle East, De Beers is approaching the second half of the year with caution.

"We are obviously living in uncertain times and that requires a more cautious outlook," he said.

Also on Wednesday, De Beers announced that Gary Ralfe, the company's former managing director and director, was retiring from the board of De Beers after 34 years of service.

Oppenheimer said Ralfe's energy and loyalty to the company have been key to its continuing success.

"Gary will be remembered for his unflagging search for innovation and continuous improvement in the way we organize our business, and for the invaluable role he played in guiding the restructuring of De Beers, including our conversion from a supply- to a demand-driven business, and in the privatization of the company," Oppenheimer said.

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