DTC sightholder cuts run deep, but no major impact for U.S. retailers

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DTC sightholder cuts run deep, but no major impact for U.S. retailers

By Michelle Graff

January 20, 2008

London—The Diamond Trading Co. (DTC) says the recent sightholder reshuffling, which slashed the number of companies receiving its loose diamonds by 15 percent, will not impact U.S. retailers.

The list of sightholders for London and South Africa for the 2008 through 2011 contract period, released on Dec. 17, included 75 companies, down from the previous 93, with six new applicants added and 24 companies ousted. Counting sightholders in Namibia and Botswana, there are 79 names total.

Losers included New York-based diamond dealers Hasenfeld-Stein, which lost its sight, and sightholder applicant Sterling Jewelers, which was rejected.

Notable companies retaining their sightholder status include New York-based Lazare Kaplan International, which also has a Botswana sight, and Rand Precision Cut Diamonds Ltd., which supplies Tiffany and Co.

DTC Managing Director Varda Shine would not tell National Jeweler which diamond centers were hit hardest by cuts.

Out of nine U.S. sightholders, at least one—Hasenfeld-Stein—was cut, but six companies confirmed that they retained their sights—Julius Klein Diamonds LLC, Lazare Kaplan International, Louis Glick Diamond Corp., Michael Werdiger Inc., Premier Gem Group and Stuller Inc. Meanwhile, the fates of Almod Diamonds Ltd. and Dynamic Diamond Corp. remained unclear at press time.

"There hasn't been one center that has done better or worse than another," Shine says.

The only exception is southern Africa, where De Beers has been concentrating its beneficiation efforts, siphoning off supply from traditional diamond centers to develop and sustain diamond-polishing industries in Botswana, Namibia and South Africa, she adds.

Shine also says she "really can't see" that the trimmed-down list will have an impact on U.S. retailers, pointing out that many of the same companies that have been suppliers for years remain on the list.

Ben Janowski of Janos Consultants agrees, adding that U.S. retailers won't have problems buying diamonds, whether they come from a De Beers sightholder or another source. He also points out that retailers are no longer impressed by the prestige associated with being a De Beers sightholder.

In fact, between the negative publicity the company received over the Blood Diamond movie controversy and the opening of its eponymous retail stores, displaying the De Beers name might be something retailers are working to avoid.

"It certainly doesn't have the impact it used to," Janowski says.

While Shine says that the revised sightholder list won't impact supply, she did admit the DTC would have "a little bit" less supply in the future due to a court-mandated phase-out of DeBeers' purchases of Alrosa rough in an effort to create more competition in the diamond market. Though the ruling is being appealed, DeBeers is set to get its last batch of Alrosa diamonds, $400 million worth, in 2008.

Editor's note: For earlier developments in this story, see Majority of U.S. companies retain sightholder status
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