Following De Beers’ annual Friday breakfast at the JCK show in Las Vegas, CEO Al Cook spoke with JCK about the flurry of initiatives he announced at the event, plus recent reports about sightholder deals and possible attempts by two former De Beers CEOs to purchase the company..
Any thoughts on the reports that two of your predecessors, Bruce Cleaver and Gareth Penny, may be bidding on the company?
[Laughs] I guess there’s something about De Beers that makes you fall in love.
It does seem we are seeing a lot of names pop up as prospective buyers, including some sovereign wealth funds and specific diamond companies.
Anglo American is running the [sales] process, but they are very pleased with the level of interest. I can’t comment on individual countries or companies.
You have said you want to establish 100 De Beers London [formerly De Beers Jewellers] stores, as well as 100 Forevermark retail stores. Some have suggested those are ambitious plans for two unproven retail concepts. Is this part of the sales process, to get a bigger multiple because De Beers is considered a luxury brand?
First of all, the strategy we developed for De Beers was largely developed before there were any announcements on separation [from Anglo American]. So my job is not to manage the sales process. My job is to create the most value.
Our retail strategy is entirely consistent with creating value. The way we look at the two opportunities—Forevermark and De Beers London—is very different. As far as Forevermark, what we’ve got in India is the world’s fastest-growing jewelry market and you’re seeing investors look at India not just in jewelry, but in everything. It’s a fantastic place to invest right now. We are just extraordinarily lucky that the world’s fastest-growing economy happens to be the place that’s loved diamonds for longer than any other nation of the world.
We’ll be opening stores in India through a combination of owned stores and franchise—more franchises than owned. So that gives us the ability to ramp up in a faster way.
We see De Beers London as the epitome of luxury; it’s everything we want a diamond to be. I think it’s very important that diamond companies like De Beers have a boutique that really sets out our vision on how diamonds should be sold. And that’s what De Beers London does. There, our focus is certainly on scale, but quality comes before quantity. I would rather have one truly stunning store on Rue de la Paix in Paris than 10 not-so-quite-stunning stores in other places. So our focus for De Beers London is very much going to be on these flagship stores that epitomize everything we want our company to be. And you saw that with our new store in Dubai Mall, which is just beautiful, and once we open the store in Paris later this year, people will see what {De Beers Brands CEO] Sandrine Conseiller and her team created.
The De Beers retail chain is nearly 25 years old. Why do you think it will become more successful now?
A few things are very different. The first is that we will focus on De Beers London as a profit center. It’s a place to create value, and it needs to stand on its own two feet. The whole business plan is based on that. We will ensure the financials are as beautiful as the jewelry.
Beyond that, we can provide in our boutiques polished diamonds from our polished division, drawn from our mines. That’s a chain of ownership that no one else can match. In this world where people are concerned about authenticity, ethics, and sustainability, we can say that these diamonds never left our hands. We feel that’s a proposition no one else can match.
Last month, Bloomberg reported that certain sightholders were getting special deals. Can you comment on that?
We won’t comment. I would say, we work very close with our sightholders. We work very closely and transparently with our host governments. And we have a sales model that we are very proud of.
Top: Al Cook during the De Beers breakfast at JCK (photo by Camilla Sjodin)
Source : jckonline