DTC Reports Strong First Quarter in Retail


June 9, 2004

DTC Reports Strong First Quarter in Retail

De Beers' Diamond Trading Co. says retail sales for the first quarter of 2004 showed strong growth, and credit the boost to DTC's marketing program. The strongest players were the U.S., Japan, other Asian markets, the United Kingdom and France. "Consumer confidence remains strong in both the U.S. and Japan," says Stephen Lussier, DTC marketing director. "While there are downside risks to the continuation of these trends – in particular, the impact of rising interest rates and high oil prices on consumer spending – the outlook remains good."

The results in the U.S. are driven in part by sales of three-stone jewelry and the right-hand ring, says DTC. High-income households and married women segments also saw double-digit growth. "Whilst this is encouraging, it should be seen in the context of a lacklustre Q1 last year," says Lussier. "But the outlook for the remainder of the year is strong with trade sentiment being very positive."

Japan is also a bright spot. Diamond jewelry sales were up with primary growth continuing in the three-stone category which is a direct result of the Supplier of Choice strategy and the launch of Trilogy there, says DTC. DTC is forecasting positive growth for the rest of 2004 with growing popularity of both Trilogy and Diamond Line.

Elsewhere in Asia, markets have shown strong sales and the outlook for the second half of 2004 is upbeat. In China, diamond jewelry sales outperformed platinum and gold and the Valentine's Day and love gifting messages for diamonds drove total sales for the Chinese New Year gifting season. In Taiwan, diamond sales outperformed all other jewelry with significant increases in sales over the first quarter. In Hong Kong, first quarter sales were up significantly over the same period last year and the trade is cautiously optimistic for the full year, says DTC. In Thailand, diamond jewelry sales again fared better than sales of other types of jewelry, especially gem-set colored stone jewelry.

In India it is too early to say how the surprise election results will affect the diamond market. Reports for the first quarter say growth in diamond jewelry was up over the same period in 2003.

DTC says the Supplier of Choice strategy, to transform the trade pipeline to become more growth-driven and consumer-focused, is delivering new products to the marketplace, resulting in an increase in marketing expenditure and rising polished prices.



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