December 7, 2012 / 4:03 PM / 6 years ago

Harry Winston CEO says to keep luxury brand for now

* Company eyes eventual sale or spin out of retail arm

* Luxury brand still growing, needs investment

* Shares fall 2.9 percent

TORONTO, Dec 7 (Reuters) - Harry Winston Diamond Corp has no plans to sell or spin out its watch and jewelry 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 added. “It still requires further investment and it still needs to get through at least another year.”

Harry Winston’s shares were down more than 2 percent on Friday, the day after the diamond miner and retailer revised down its full-year diamond production targets.

The company looked to sell its watch and jewelry business to concentrate on mining, and approached potential buyers, a source close to the matter said in October. The company later said it was not in active negotiations regarding any such transaction.

Harry Winston agreed in November to buy BHP Billiton’s Ekati diamond mine in northern Canada for $500 million. It said it will 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.”

Harry Winston owns retails salons around the world and also holds a 40-percent stake in the Diavik diamond mine in Canada’s Northwest Territories. Rio Tinto Plc owns the remaining 60 percent stake in the remote mine.

The stock fell 2.9 percent to C$13.86 on Friday morning on the Toronto Stock Exchange.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below