Harry Winston CEO says will keep luxury brand for now
By Julie Gordon
TORONTO (Reuters) - Harry Winston Diamond Corp HW.TO has no plans to sell or spin off its watch and jewelry division from its mining division in the next year, though the retail arm will eventually stand on its own, the company's chief executive said on Friday.
"In the fullness of time, it will certainly either become separated or be sold to someone that can do better with it than we would be able to," Chief Executive Robert Gannicott said in a conference call with investors.
"But clearly that time is not now," he said. "It still requires further investment and it still needs to get through at least another year."
Harry Winston's shares fell more than 2 percent on Friday, the day after the diamond miner and retailer revised down its full-year diamond production targets.
A source close to the matter said in October that the company had looked to sell its watch and jewelry business to concentrate on mining and that it had approached potential buyers. The company later said it was not in active talks regarding any such transaction.
Harry Winston then agreed in November to buy BHP Billiton's (BHP.AX: Quote) Ekati diamond mine in northern Canada for $500 million. It said it would fund the cash deal with existing resources and debt, including a $400 million term loan and a $100 million revolving credit facility.
"In order to purchase Ekati we have taken on a debt facility," said Gannicott. "We don't have any great pressure to dispose of the diamond luxury retail business."
The luxury business, which includes retail salons around the world, functions as an information base for Harry Winston by providing insight into consumer trends, allowing the miner to better anticipate rough diamond demand and pricing. Continued...