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Marketing shift on horizon for Charles and Colvard

By Michelle Graff
February 12, 2009

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Morrisville, N.C.--Less than a week after announcing it latest leadership changes, struggling Moissanite maker Charles and Colvard Ltd. revealed a major shift in its marketing focus.

In a conference call for shareholders held earlier this week, Richard Bird, the new chief executive officer of the Morrisville, N.C.-based company, took a no-holds-barred approach to breaking down the company's ills, citing a culture that lacks accountability and a marketing campaign that is "overly defensive" and "narrow" in its focus as two of the major problems.

"The reality that we face is that Charles and Colvard is a very troubled company that needs several things," Bird said during the call.

Currently, marketing of the company's product, which is a lab-created diamond-like jewel, is focused on the female self-purchaser, a segment that has lost steam in the struggling economy.

Going forward, Bird said, the company will broaden its approach, marketing its product as a potential gift for men looking to get something for the women in their life and as bridal jewelry.

Customer focus groups conducted by Charles and Colvard reveal that consumers see Moissanite as a lower-priced, value alternative to diamonds that is still a step up from cubic zirconia in terms of price.

"It gets the look of the diamond...they like that," Bird said.

He said he believes there is also a market for the stone among people who own plenty of diamonds but don't want to don them for everyday purposes, such as trips to the grocery store.

"We want to tap all of that," he said.

Charles and Colvard's board of directors announced on Feb. 6 that is had appointed Bird CEO and, among other management changes, elected company director George R. Cattermole as chairman of the board of directors, the second major management shuffle at the company in the last five months.

In addition to electing Bird, Charles and Colvard announced that it had entered into a management services agreement with Bird's company, Bird Capital Group Inc.

All the changes implemented are intended to help turn around the struggling company, which closed its Hong Kong office and reported a 37 percent drop in third-quarter sales last year.

Charles and Colvard faces delisting from the Nasdaq Stock Market Inc. if its stock does not rise above $1 per share for 10 consecutive business days before April 19.
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