Mining the glitter
Ian Lindsay/Vancouver Sun
When Bob Gannicott first bought the Harry Winston chain, he hoped to sell diamonds from his Diavik mine (above) at the high-end salons
Janet Whitman, Financial Post · Saturday, Jul. 31, 2010
NEW YORK -- About a decade ago, Bob Gannicott, a prospector and geologist by trade, walked in the doors of Harry Winston Inc.’s flagship salon on Manhattan’s Fifth Avenue and made a rare and unexpected discovery: The iconic diamond business known as the “jeweller to the stars” was for sale.
Mr. Gannicott was only hoping to work out a partnership with the ultra-luxury diamond retailer to help glean better price information for the hundreds of millions of dollars worth of rough diamonds his firm, Canada-based Aber Diamond Corp., was about to start hauling from a mine in an Arctic lake 300 kilometres north of Yellowknife.
But with cash set to roll in from the mine — one of the richest diamond finds in the world — the idea of owning the upper-crust jeweller outright was starting to make sense, Mr. Gannicott said.
He was coming to realize, after a previous pact with Tiffany & Co. failed to pan out, that the only way a rough diamond marketer like his company was going to secure price information on finished diamonds would be to own a retailer outright.
An acrimonious two-decade family feud between two brothers — Ron and Bruce Winston, who were heirs to the company’s eponymous founder — had made some sort of sale or investment a necessity.
The deal took a few years to crystallize but by 2004, Aber had closed on an acquisition for a 51% stake in Harry Winston for US$85-million. In 2006, the diamond maverick bought the remaining 49% for US$157-million.
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