Harry Winston sells luxury diamond jewelry and timepiece subsidiary to Swatch Group

Harry Winston Diamond Corporation is selling its luxury brand diamond jewelry and timepiece division, Harry Winston Inc., to The Swatch Group Ltd. for $750 million plus the taking over of up to $250 million of pro forma net debt.

Harry Winston Chairman and Chief Executive Officer, Robert Gannicott says, "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.

"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."

Engineering and Brand Expertise

Gannicott said the Swatch Group has an "unparalleled combination of expertise in both engineering and brand management" which makes it the right place for such a prestigious brand.

Under the terms of the purchase agreement, Harry Winston has agreed to trade under a new name as of the time of closing of the transaction and will therefore change its name to Dominion Diamond Corporation.

Harry Winston will continue its relationship with the Swatch Group, which is one of the world's largest buyers of polished diamonds, in sourcing polished diamonds for them, Gannicott said.

The two companies will also explore the opportunities for a joint diamond polishing venture bringing together the manufacturing and diamond expertise of the two companies.

Swatch Group Chairwoman Nayla Hayek says, "Harry Winston brilliantly complements the prestige segment of the group."