Aber Wants to Expand Downstream, Shopping for Retailer

Aber Diamond Corp., part owner of Canada’s ‘second’ diamond mine Diavik, is in the market for a diamond retailer of an international scale with a strong brand and an upscale presence.

Aber CEO Robert Gannicott says that Cartier is the type of retailer possessing the “kind of level of name recognition” the he has in mind, but it is not looking at Cartier as a possible candidate or at shareholder and client Tiffany, for that matter.

Gannicott says the company is not interested in establishing a retailing operation from scratch, but rather jumpstart their venture into retailing by purchasing an established business with an existing strong recognition.

Aber has plenty of cash in its coffers and wants to invest it wisely to increase shareholder value. The sentiment in Aber is that it should capture the value of both ends of the diamond pipeline – where the margins are wider - and avoid the in-between section of polishing where competition is fierce and margins are relatively narrow.

The company has already started looking at possible candidates and hopes to complete the move within a year.

Just as expansion towards retailing is being considered, Gannicott also hinted that an expansion into mining is a possibility. Rio Tinto manages mining at Diavik, allowing Aber to concentrate on marketing its share of the mine’s rough.

A foray into high-end retailing is new to upstream companies, so far attempted only by De Beers who partnered with LVMH to establish De Beers LV.