Richline Group Acquires Rio Grande

Fine jewelry manufacturer and marketer, Richline Group, Inc., said Friday that it has acquired Rio Grande, effective Jan. 1, 2013.

Rio Grande, an Albuquerque, N.M.-based company founded in 1944 by Saul Bell, is an international distributor of jewelry making equipment, jewelry packaging and displays, and other jewelry related products for jewelry designers, manufacturers and retailers. It remained family owned and operated under the Bell Group, Inc. Meanwhile, Richline Group, a wholly-owned subsidiary of Warren Buffet's Berkshire Hathaway Inc., is a multi-national holdings company of jewelry manufacturers and distributors. 

Under the new corporate structure, Alan Bell and Molly Bell will remain to run the company as president and executive VP, respectively, Richline said in a statement. Eddie Bell will continue to oversee the Santa Fe Symposium and Neutec. The Santa Fe Symposium is an annual gathering of jewelry industry professionals involved in cutting-edge technology in jewelry making who share their insights with in-depth papers. Neutec, also included in the acquisition, is a manufacturer of lost-wax jewelry casting equipment (grain-making and casting machines), laser-welding machines, as well as the accessories and supplies that support them.

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Georg Jensen Acquired by Investment Group for $140 Million

Georg Jensen Fusion Rings

Investcorp, a group that invests in what it calls “alternative products,” said Monday that it has signed a definitive agreement to acquire Danish luxury silver brand, Georg Jensen, for $140 million from private equity group Axcel Capital Partners.

With the sale comes a change in key personnel. David Chu, founder of Nautica, will join the company on closing as chief creative director and co-chairman of the Investcorp board. Also joining the board on closing will be Guy Leymarie, former CEO of DeBeers Diamond Jewellers, Cartier International and Dunhill.

Georg Jensen is a global luxury brand that designs, manufactures and distributes silver jewelry, watches, fine silverware and high-end housewares. With a history that spans more than 100 years, the Georg Jensen brand has a deep heritage in fine silver goods and represents quality craftsmanship and timeless designs.

“We are pleased to be entrusted with taking Scandinavia's preeminent luxury brand to a global level. We believe that in partnership with the current solid management team, said Hazem Ben-Gacem, head of Investcorp's European corporate investments activities. “Georg Jensen stands to become one of the leading hard luxury brands in the 21st Century.”

Georg Jensen was founded by the eponymous Danish designer in 1904. Today the business has 94 fully owned stores and three franchised stores around the world. The vertically integrated company has approximately 1,200 employees worldwide. In 2011, the company had sales of approximately $160 million. Georg Jensen is part of the Royal Scandinavia Group, which was bought by Axcel in 2001. 

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LVMH Increases Stake in Hermès

LVMH continues to slowly add to its ownership of Hermès International saying it now owns 21.4 percent of the Parisian luxury jewelry house, up from 20.2 percent. Company representatives made the announcement Tuesday during LVMH's half-year earnings report conference call with investors and journalists.

Bernard Arnault

In October 2010, LVMH shocked the luxury and investment industries and enraged the family that owns Hermès by announcing that it bought a 14 percent stake in the firm in a complex derivatives trade that occurred years earlier without public knowledge and resulted in the purchase of the shares at less than half of the market value. Bernard Arnault, LVMH chairman and CEO, said at the time LVMH would continue to buy more shares but did not intend to take control, to make a public offer for the company nor to seek seats on the board.

Two months later LVMH announced that it has increased its holdings on Hermès to 20.2 percent. During this time descendants of Hermès founder Thierry Hermes, who between them hold 73.4 percent of the company's capital, first demanded that LVMH sell its shares then took the unusual step of pooling their shares into a separate holding company. In January, they received the approval of the French stock market regulator to do this. Based on previous statements by the family members in published reports, the new holding company will have more than 50 percent of the capital and have first right of refusal on the remaining shares held directly by the family.

Anglo American Receives Regulatory Approval for De Beers Acquisition

London-based mining giant Anglo American said Friday that it has received final regulatory approval to acquire the Oppenheimer family’s 40 percent stake in the De Beers Group.

“Now that all the conditions to the transaction have been satisfied, a formal pre-emption offer will be served by CHL Holdings Limited (representing the Oppenheimer family interests) on Anglo American and the Government of the Republic of Botswana under the terms of the De Beers Shareholders' Agreement,” Anglo-American said in a statement Friday.

The Oppenheimer family, which has owned the De Beers Group for more than 80 years, announced in November that it will sell its remaining 40 percent stake in the diversified diamond company to Anglo American plc for $5.1 billion in cash. Consent under Section 11 of the South African Mineral and Petroleum Resources Development Act 2002 was the final approval required for this transaction to proceed.

The pending acquisition means that Anglo American will increase its current 45 percent shareholding in the world's largest diamond company to up to 85 percent, subject to adjustment as provided for in the agreement. In January 2012, the transaction was approved by Anglo American shareholders, with 99.94 percent voting in favor.

The Government of the Republic of Botswana, which currently owns a 15 percent stake in De Beers has the opportunity to participate in the transaction and increase its interest in De Beers, on a pro rata basis, to up to 25 percent.

In the event that the GRB exercises its pre-emption rights in full, Anglo American will acquire an incremental 30 percent interest in De Beers, taking its total interest to 75 percent, and the consideration payable by Anglo American would be reduced proportionately.

Anglo American expects the transaction to close in the second half of 2012, in line with its previously stated timeline.

De Beers is a family of companies that dominate the diamond, diamond mining, diamond trading and industrial diamond manufacturing sectors. De Beers is active in every category of industrial diamond mining: open-pit, underground, large-scale alluvial, coastal and deep sea. Mining takes place in Botswana, Namibia, South Africa and Canada. The company’s subsidiaries also include the Diamond Trading Company, the rough diamond sales and distribution arm of the company, the Forevermark diamond brand and De Beers Diamond Jewellers, a luxury joint-retail operation with LVMH-Moët Hennessy Louis Vuitton.

Anglo-American is one of the world’s largest mining companies with a portfolio that includes iron ore and manganese, metallurgical coal and thermal coal; base metals – copper and nickel; and precious metals and minerals – in which it is a global leader in both platinum and diamonds. The company operates in Africa, Europe, South and North America, Australia and Asia.

A French Company Acquires Another Prestigious Italian Jewelry Brand

Tilda Swinton, a spokesperson for Pomellato.

Less than two years after French conglomerate LVMH acquired luxury Italian jewelry brand Bulgari; its French competitor, holding company Kering, finalized its acquisition of Italian jewelry brand Pomellato.

The agreement for Kering to purchase a majority stake in Pomellato was announced in April. On Thursday, Kering, formerly known as PPR, announced in a brief statement that the agreement received clearance from the antitrust authorities and has been finalized.

Pomellato was one of the few truly prestigious independent Italian jewelry brands left to acquire. The brand was founded by Pino Rabolini in Milan in 1967, pioneering the concept of ready-to-wear jewelry. The idea was that jewelry is not just a status symbol but an accessory to be worn and replaced at any time of the day. The current CEO, Andrea Morante, will remain in this position with the company.

Pomellato ranks among the top five European jewelers by sales, with 2012 revenues of €146 million ($190 million). It has a distinct style, an international following and an aura of exclusivity. The brand is known for its colorful rounded cabochon gems and its tactile forms. For example, pavé patterns are created with gemstones of various sizes and irregular forms. In recent years, the company was also known for its advertising partnership with actress Tilda Swinton, who appeared in company photographs and videos.

In 1995, Pomellato launched a second brand, Dodo, an accessible line of 18k gold charms in the shapes of animals. The name, after an extinct bird, was chosen as a way to exemplify the need to protect nature. The brand supports the Italian World Wildlife Fund, working to prevent the extinction of other animal species.

Pomellato’s distribution network includes 86 mono-brand stores (45 Pomellato, 41 Dodo) as well as approximately 600 independent points of sale around the world. More importantly for Pomellato and Kering is that there is plenty of room for growth. Pomellato has expressed an interest to extend its international distribution. Kering, with its immense size as an international player in the apparel and accessories markets, can fuel that growth.

Kering is present in more than 120 countries and generated revenues of €9.7 billion ($12.4 billion) in 2012. With the acquisition Pomellato finalized, the company now has a majority stake in 19 brands that include international luxury fashion brands Gucci, Bottega Veneta and Saint Laurent; French luxury jewelry brand, Boucheron; Chinese luxury jewelry brand, Qeelin; luxury Swiss watch brands, Girard-Perregaux and Jewn-Richard; and sports brand, Puma.

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Jewelry Tradeshows and National Jeweler Acquired By Private Equity Firm

Buyers and exhibitors conduct business at the recently concluded 2013 Couture Show in the Wynn Las Vegas. Photo credit: Anthony DeMarco

Toronto-based private equity firm, Onex Corp., said Tuesday that it has acquired Nielsen Expositions, which includes the jewelry tradeshows Couture Show in Las Vegas, JA New York, JA Special Delivery New York, and the online jewelry publication, National Jeweler.

Onex paid the Nielsen Expositions’ parent firm, an affiliate of Nielsen Holdings N.V., $950 million in cash consideration. With the closing of the acquisition, the company was renamed Emerald Expositions, Inc., based in San Juan Capistrano, Calif. It produces more than 65 business-to-business tradeshows and conference events per year across nine markets, including general merchandise, sports, hospitality and retail design, jewelry, photography, decorated apparel, building, healthcare and military.

Onex Partners III made an equity investment of approximately $350 million, of which Onex’ share was $85 million as a Limited Partner in the Fund.

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Kering Acquires Pomellato

Tilda Swinton, brand ambassador for Pomellato.

The rumors have been swirling for some time but now they are verified.  PPR, which will soon officially change its name to Kering, has acquired Pomellato, the Italianjewelry company that has both broad and growing appeal.

Kering will hold a majority stake in the Pomellato group and its CEO, Andrea Morante, will remain in this position with the company.

Pomellato, whose 2012 revenues reached €146 million ($190 million), is one of Europe’s major jewelry groups, with a strong international position. The company’s success is based on the personality and style of its creations with a blend of colors, stones and shapes as well as their fine Italian craftsmanship. The Pomellato group is a profitable and growing Italian business with two brands, Pomellato and Dodo. The first positioned within the fine jewelry segment and the latter within the accessiblejewelry segment. Its distribution network includes 86 mono-brand stores (45 Pomellato, 41 Dodo) as well as approximately 600 independent points of sale around the world. There is plenty of room for growth for this company and Kering said its expertise and resources in real estate, distribution, media and brand management will help in that area.

With this acquisition, Kering is extending and reinforcing its portfolio of luxury brands in the high growth jewelry market.

“Synonymous with Italian style, Pomellato and Dodo rank among the most beautiful and innovative jewelry brands in the world,” said François-Henri Pinault, chairman and CEO of Kering . “We have great ambitions for the Pomellato group, which, with access to our expertise and know-how, will be able to step up the pace of its growth and expand its geographic footprint while preserving the values that underpin its Italian identity.”

Andrea Morante, CEO of Pomellato, added: “Becoming global brands is no longer an option for Pomellato and Dodo; it is a necessity. With this consideration in mind, we have undertaken a lengthy review of our best strategic alternatives and reached the conclusion that joining Kering was far and away the most favorable course of action. First, we will instantly join one of the most prestigious groups in the world; second, we will have a unique opportunity to preserve and enhance the Pomellato and Dodo success stories on a global scale.”

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Swatch Group Finalizes $1 Billion Acquisition of Harry Winston

The Harry Winston Salon in Harrods London department store.

The world-renowned Harry Winston luxury brand is now under new ownership. The Swatch Group Ltd. said late Tuesday that it has successfully completed the acquisition of the jewelry and timepiece retailer.

Swatch and Harry Winston Diamond Corp.,  now the prior owner of the brand, announced in January that the Harry Winston luxury retail division was being sold for $750 million plus the assumption of up to $250 million of pro forma net debt.

In addition to being a luxury jeweler and timepiece company, Harry Winston Diamond Corp. operates as a diamond mining business with a 40 percent ownership interest in the Diavik Diamond Mine. It is finalizing the purchase of the Ekati Diamond Mine, including its diamond sorting and sales facilities. Both mines are in the Northwest Territories of Canada.

Following the transaction, the company now is solely a diamond company and operates under the new name, Dominion Diamond Corp., while Swatch Group retains the Harry Winston brand name.

The U.S.-based luxury retail business was bought by the Canadian diamond mining group, Aber Corp., in 2006 to create the Harry Winston Diamond Corp., with divisions in luxury retail and diamond mining. It was listed on the New York Stock Exchange in 2007.

The brand’s namesake (Harry Winston, March 1, 1896 – December 28, 1978) founded the luxury retail company in 1932. He was among the most famous jewelers in the world and the first jeweler to lend jewels to an actress for the Oscars red carpet in 1944. He was also famous for donating the Hope Diamond to the Smithsonian Institution in Washington.

The luxury diamond jeweler and timepiece retailer has salons in key locations—including New York, Paris, London, Beijing, Shanghai, Hong Kong, Singapore, Tokyo and Beverly Hills.

The Swatch Group, based in Biel, Switzerland, is the world’s leading supplier of finished watches and watch movements and one of the world’s largest buyers of polished diamonds. The two companies previously said that they will explore the opportunities for a joint diamond polishing venture bringing together the manufacturing and diamond expertise of the two companies.

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Harry Winston Diamond Corp. Receives Approval to Sell Luxury Brand to Swatch Group

Harry Winston Diamond Corp. said Thursday that it expects the sale of its luxury diamond jewelry and timepiece division, Harry Winston, Inc., to the Swatch Group to close on or around March 26. The Toronto-based company said it has received regulatory approval to complete the sale.

The two companies announced in January that the Harry Winston luxury division was being sold to the Swatch Group for $750 million plus the assumption of up to $250 million of pro forma net debt.

In addition to being a luxury jeweler and timepiece company, Harry Winston Diamond Corp. operates as a diamond company with a 40 percent ownership interest in the Diavik Diamond Mine. It is finalizing the purchase of the Ekati Diamond Mine, including its diamond sorting and sales facilities. Both mines are in the Northwest Territories of Canada.

Upon completing the sale of its luxury retail business, the company will be solely in the diamond mining and distribution business operating under the new name, Dominion Diamond Corp. The Swatch Group will retain the Harry Winston brand name.

The U.S.-based luxury retail business was bought by the Canadian diamond mining group, Aber Corp., in 2006 to create the Harry Winston Diamond Corp., with divisions in luxury retail and diamond mining. It was listed on the New York Stock Exchange in 2007.

The brand’s namesake (Harry Winston, March 1, 1896 – December 28, 1978) founded the luxury retail company in 1932. He was among the most famous jewelers in the world and the first jeweler to lend jewels to an actress for the Oscars red carpet in 1944. He was also famous for donating the Hope Diamond to the Smithsonian Institution in Washington.

The luxury diamond jeweler and timepiece retailer has salons in key locations—including New York, Paris, London, Beijing, Shanghai, Hong Kong, Singapore, Tokyo and Beverly Hills.

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Georg Jensen Names David Chu as CEO

David Chu

Danish luxury silver brand and global retailer, Georg Jensen, said Friday it has appointed fashion designer and entrepreneur, David Chu, as its chief executive officer. Chu is well-known in the world of fashion for founding Nautica, the global lifestyle and clothing brand, in 1983 and turning it into a company with $1 billion in sales by the time he sold it in 2003 to Vanity Fair Corp.

Chu has been with Georg Jensen since November 2012, when the company was acquired by Investcorp. Chu was brought on as co-chair of Georg Jensen’s board of directors and chief creative officer. He will continue to serve as a board member as well as CCO to oversee the design direction and strategy for all products.

“My goal is to bring Georg Jensen to the design conscious community all over the world,” Chu said in a statement.

Among his many positions since selling Nautica, Chu served as chief creative officer of Tumi, the global luggage, travel and accessory brand.

Founded in 1904, Georg Jensen is known for its collaborations with leading artists and designers of the 20th century, including Henning Koppel, Johan Rohde and Arne Jacobsen, who are among the masters of 20th century modernism and Scandinavian design.

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Signet Jewelers To Acquire Zale Corp.

Mike Barnes, Signet CEO, will lead the combined companies.

In a surprise announcement two of the largest retailers in the US have agreed to become one company. 

Signet Jewelers Limited, the largest specialty retail jeweler in the US and the UK, and Zale Corporation, a leading specialty retailer of fine jewelry in North America, said Wednesday that they have entered into a definitive agreement for Signet to acquire all of the issued and outstanding stock of Zale for $21 per share in cash, or $690 million. Including debt, the deal values Zale at $1.4 billion. 

The transaction brings together two of today's leading jewelry retailers with six of the most recognizable brands across four countries. The combined company will have approximately 3,500 retail locations in the US, Canada, Puerto Rico and the UK with combined sales of $6.2 billion “and enhanced operating capabilities expected to generate approximately $100 million in annual synergies within three fiscal years,” the two companies said in a joint statement released Wednesday morning. 

Mike Barnes, Signet CEO  will hold the same position in the combined company, according to the statement. Theo Killion, Zale CEO, will continue to operate the Zale portion of the business and report to Barnes.

"This transformational acquisition further diversifies our businesses and extends our international footprint, opening the door to greater growth and innovation across the enterprise," Barnes said. "The addition of Zale to the Signet family is consistent with our long-term growth strategy and leverages our combined operating expertise to create better choices for our customers, new opportunities for our employees, and makes us a more attractive partner to our vendors. In addition, it allows us to better optimize our balance sheet, creating long-term value for our shareholders. We are excited about the prospects for the combined company and the many opportunities that this creates for our future.”

Killion added, "Having successfully completed our multi-year turnaround program to return to profitability, Signet's operating strengths will enable us to accelerate Zale's performance improvement for the benefit of our current and future guests."

Signet's offer represents a premium of 41 percent over Zale's closing price as of February 18, according to the statement. It represents 7.4 times the EBITDA value over a 12-month period. As part of the transaction, Signet has entered into a voting and support agreement with Golden Gate Capital, the beneficial owner of approximately 22 percent of Zale's common stock. The transaction is expected to be high single-digit percentage accretive to earnings in the first full fiscal year after the close of the transaction, excluding acquisition accounting adjustments and one-time transaction costs.

The acquisition is expected to be financed through bank debt, other debt financing and the securitization of a significant portion of Signet's accounts receivable portfolio.

Signet has 1,400 retail locations that operate under the brands Kay Jewelers, Jared The Galleria Of Jewelry and regional brands. Signet's UK division operates approximately 500 stores primarily under the brands of H.Samuel and Ernest Jones.

Zale Corp. has 1,680 retail locations in the US, Canada and Puerto Rico. Its brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda.

The transaction is subject to Zale stockholder approval, certain regulatory approvals and customary closing conditions.

J.P. Morgan Securities LLC acted as exclusive financial advisor and provided a fairness opinion to the board of directors of Signet and J.P. Morgan Chase Bank, N.A. committed to provide bridge financing for the transaction. Weil, Gotshal & Manges LLP acted as legal counsel to Signet in connection with the transaction. BofA Merrill Lynch acted as exclusive financial advisor and Cravath, Swaine & Moore LLP acted as legal counsel to Zale in connection with the transaction.

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Swatch Group Acquires Harry Winston’s Luxury Retail Division for $1 Billion

The Swatch Group has acquired the famed Harry Winston luxury diamond jewelry and timepiece retail business for $750 million plus their assumption of up to $250 million of pro forma net debt. When this transaction is completed the company, Harry Winston Diamond Corp., will be solely in the diamond mining and distribution business.

The U.S. based division (Harry Winston Inc.) is a premier diamond jeweler and luxury timepiece retailer with salons in key locations—including New York, Paris, London, Beijing, Shanghai, Hong Kong, Singapore, Tokyo and Beverly Hills. The possible sale of the retail division was the subject of rumors for months, which the company denied in a statement issued in October.

The company’s namesake (Harry Winston, March 1, 1896 – December 28, 1978) founded the company in 1932. He was among the most famous jewelers in the world and the first jeweler to lend jewels to an actress for the Oscars red carpet in 1944. He was also famous for donating the Hope Diamond to the Smithsonian Institution in Washington.

The jeweler was bought by Canadian diamond mining group, Aber Corp., in 2006 to create the Harry Winston Diamond Corp., with divisions in luxury retail and diamond mining, which was listed on the New York Stock Exchange in 2007.

The transaction does not include the Canadian-based diamond mining activities of Harry Winston Diamond Corp., which has a 40 percent ownership interest in the Diavik Diamond Mine and is finalizing the purchase of the Ekati Diamond Mine, including its diamond sorting and sales facilities. Both mines are in the Northwest Territories of Canada.

When the transaction with Swatch is completed, this diamond business will operate under the name: Dominion Diamond Corporation.

Robert Gannicott, Harry Winston chairman and CEO, said changes in both luxury retail and the diamond markets, as well as the need for cash, led to the decision to sell its luxury retail operation.

“At the time that we purchased the Harry Winston brand, resource investment opportunities for diamonds were rare and expensive following the euphoria of the Canadian diamond discoveries, and the involvement of the large international mining companies,” Gannicott said in a statement. “The Harry Winston brand was competitively priced compared with its peers and we could bring diamond expertise and strategic connections to enhance value. Today there is a range of diamond resource opportunities while the value of heritage luxury brands has increased dramatically. This transaction represents a sound return on our original investment. It will leave us well equipped to realize upstream opportunities in an environment where cash has become a strategic resource while preserving and expanding our relationship with the downstream diamond business.”

The Swatch Group, based in Biel, Switzerland, is the world’s leading supplier of finished watches and watch movements and one of the world’s largest buyers of polished diamonds. The two companies said that they will also explore the opportunities for a joint diamond polishing venture bringing together the manufacturing and diamond expertise of the two companies.

“Harry Winston does brilliantly complement the prestige segment of the Group,” said Nayla Hayek, chairwoman of The Swatch Group Ltd. in a separate statement. “We are proud and happy to welcome Harry Winston to the Swatch Group family—diamonds are still a girl’s best friend.”

The transaction is subject to the approval of the different regulatory authorities.

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Fabergé and Gemfields Finalize Merger

Gemfields has already started promoting its emeralds through an advertising campaign.

The iconic luxury brand, Fabergé, has completed its merger with colored gemstone miner and distributor, Gemfields. The merger, first announced in November, creates what has been planned all along for Gemfields since its founding fewer than 10 years ago: a way to produce a mine-to-market template for its colored gemstones.

Gemfields owns a majority stake of the Kagem mine in Zambia, which produces emeralds and amethysts, a mine in Mozambique for rubies, and prospecting licenses for other gemstones in Madagascar. Emeralds from Kagem are by far the company’s biggest product.

The plan is that Gemfields will provide an ethical and traceable source of providing its gemstones to consumers, thus fueling demand for its product. To help create this demand, Gemfields already begun an advertising and marketing campaign for its Kagem emeralds.

The merger was managed by private equity mining giant, Pallinghurst, which owned indirect equity interests of 33 percent in Gemfields and 49 percent in Fabergé and also held certain loan interests in Fabergé. After the transaction, Pallinghurst now owns 48 percent of the enlarged Gemfields. The deal reportedly values Fabergé at $142 million and was funded with 214 million shares in Gemfields.

Arne H. Frandsen, Pallinghurst chief executive, previously said that the merged company is the “next step in realizing our vision and strategy for our gemstones and luxury platform…. Once consummated, we will be well on the way to creating the colored gemstone equivalent of what De Beers has created for diamonds.”

“This transaction creates the world’s number one colored gemstone company, operating at both critical ends of the value chain,” Brian Gilbertson, Pallinghurst chairman, said Wednesday. “Gemfields can now take its vision for colored gemstones to the next level and Fabergé becomes the obvious consumer choice for high‐end, ethically supplied colored gemstone jewelry.”

Gemfields previously articulated a number of benefits of the transaction. They include:

* Positioning U.K.-based Gemfields with Fabergé’s heritage operating in the two most profitable segments within the gemstone supply chain;

* Advancing Gemfields’ “Mine and Market” strategy;

* Positioning Fabergé as the colored gemstone retailer of choice within the hard luxury retail sector, a sector with an estimated turnover of $54 billion in 2011 according to the Bain Luxury Market Study;

* Creating marketing, communication, management and supply synergies to deliver operational efficiencies; and

* Creating a platform to further increase Gemfields’ market share within the colored gemstone sector, while gaining exposure to luxury sector multiples and greater influence over product positioning and consumer awareness.

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