Signet Jewelers Ltd., parent of Akron-headquartered Sterling Jewelers Inc., has bought a diamond polishing and cutting facility in Gaborone, Botswana, as it seeks to ensure more consistent, cost-effective access to diamonds.
Sterling operates Kay and Jared the Galleria of Jewelry stores, among other retailers.
The facility, in Botswana’s capital city and with 230 employees, is Signet’s first diamond factory.
Signet [NYSE: SIG] bought the facility for an undisclosed sum from H&A Cutting Works Ltd., a subsidiary of Exelco International Ltd. in the United Kingdom.
National Jeweler magazine noted that this is not the first time Signet has sought a direct supply of diamonds through a polishing facility.
Signet, according to National Jeweler, subcontracted a diamond polishing facility in Vishakhapatnam, India, but closed it in 2008. National Jeweler pointed out that the global financial crisis was beginning in 2008.
Signet CEO Mike Barnes indicated in a statement that there may be other such acquisitions.
“We are committed to further developing this initiative,” he said, “as well as building our relationships with our established vendors of polished diamonds and diamond jewelry, who will continue to account for the majority of our diamond sourcing.”
Signet, the largest operator of jewelry stores in the United States and the United Kingdom, said that more than 75 percent of its U.S. sales come from diamonds or diamond jewelry. Sterling, based on Ghent Road in Akron, is Signet’s U.S. retail division.
Signet spokesman David Bouffard confirmed via email that currently the Botswana facility accounts for only a small amount of the company’s diamond sourcing.
He said the vast majority of diamonds the company procures are, and will continue to be, either in finished jewelry or loose, polished stones.
Bouffard noted that the supply of diamonds is forecast to be declining over time, while demand is expected to grow.
“Signet’s financial strength has allowed it to acquire this new diamond-polishing facility in Botswana, the new heart of the diamond world,” Bouffard said.
“By owning this state-of-the-art facility, Signet can ensure more consistent, cost-effective access to diamonds in the shapes and cuts it needs with less vulnerability to the fluctuations of the overall diamond market.”
Earlier this fall, publications reported that Alrosa, the Russian diamond mining company, was close to signing a supply contract for $80 million worth of diamonds.
Bouffard said via email that the company does not comment on “market speculation.”
Sterling, the Akron-headquartered division, operates more than 1,300 stores nationwide, including the Kay and Jared chains.
Earlier this year, Sterling reported that in had more than 2,000 employees in the greater Akron area.
Katie Byard can be reached at 330-996-3781 or kbyard@thebeaconjournal.com.