What Recession? DeBeers Cranks Out the Diamonds
Will it be a very bling-y Christmas?
(That’s right, we’re not waiting for Christmas in July — we’re tappin’ that tree in June!)
As we dig around the rubble of the economy for some glimmer of hope, DeBeers gives us a real shiner: They’re ramping up diamond productionin anticipation of a better Christmas this year than last, Reuters reports.
That may sound ridiculous, given that three-quarters of retailers reporting chain-store sales this morning missed analysts’ targetsand tomorrow's jobs report is expected to show the unemployment rate topped 9 percent last month.
But when you consider the industry has all but collapsed since the recession started, forcing DeBeers to slash production by more than 90 percent in the past year, it makes a little more sense.
"We're looking at a comparable period [last year] that was very depressed," said Des Kilalea, an analyst at RBC Capital Markets.
"It's not necessarily a statement that the world will be very healthy come Christmas — I don't think anybody believes that," Kilalea said. "I think everyone believes it will be a better Christmas compared to last year."
And DeBeers CEO Gareth Penny says demand isn’t down as much as you might think (tell that to Harry Winston) and is even up in China, leaving retailers to burn through their dwindling inventories.
"A large part of the market still grows — bridal jewelry, special-occasion jewelery, etc." Kilalea said. "That's probably as much as 50 percent of the market."
Plus, prices are down more than 20 percent and retailers want to move that bling, which means, providing you have a job, that it’s a great time to — Here comes the bride ... here comes the bride — get married!
Well that and the fact that Brad Pitt just bought his daughter, Shiloh, a $15,000 diamond and platinum necklace for her — wait for it — THIRD BIRTHDAY.
So, you know diamonds are totally in this year.
Losing your job is so last year.
Browsing the Diamond Counter:
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