NEW YORK — Aber Diamond Corp., a Canadian diamond mining company, has acquired the remaining minority interest of iconic Fifth Avenue jeweler Harry Winston for $157 million.
The move means that for the first time in 74 years, there will not be a Winston family member at the helm of the company that has a legacy of creating some of the most expensive diamond jewelry in the world.
Aber acquired a 51 percent controlling stake in Winston for $85 million in April 2004, with the option to purchase the remaining shares by 2010 from chairman Ronald Winston, founder Harry Winston’s son, and Fenway Partners, a New York-based private equity firm.
After almost two decades of a sometimes acrimonious battle, Ronald Winston bought out his brother Bruce’s half of the company in the Nineties with Fenway Partners. Ronald Winston will no longer be on the board and has been named honorary chairman.
“Clearly, we had a strategy that we developed that must have been about three-and-a-half, or four years ago,” said Thomas O’Neill, Aber president and chief executive officer of Harry Winston. “The business plan we put together is something that was rather aggressive. The business was below what it is today and we stuck with it because we thought its become something substantial for our shareholders. We have more than doubled the value of the company in two-and-a-half years.”
Aber estimated Winston’s total value to be at $330 million.
Since the Aber acquisition, Winston has embarked on an aggressive international retail expansion on a path to as many as 45 stores. This year alone, the company opened boutiques in Beverly Hills, London and Osaka, Japan. The company now has 12 outposts.
Some industry sources questioned the brand’s swift expansion, when dealing with merchandise that can escalate into the megamillions. Not long ago, Harry Winston was a red-carpet staple for Hollywood A-listers like Gwyneth Paltrow, Kate Hudson and Jennifer Lopez. Winston suddenly seems absent from the wrists and necks of women who helped boost its brand image and legacy. Red-carpet ladies often opt to wear Fred Leighton, Cartier or Van Cleef & Arpels.
Ronald Winston said that he had “mixed emotions,” about the deal. Winston, who took the reins of the company in 1978 after his father’s death, is credited with starting the firm’s now-thriving watch business, as well as initiating its push in Asia.
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“I think the company is given a certain immortality beyond me and a destiny beyond me, and I think it’s in good hands, I wish Aber continued success,” said Winston, 65. “We were a family business before and we still have a lot of earmarks. Their vision is to take advantage and leverage the name, and make more stores.”
The firm has slowed its production of custom pieces, which is a substantial part of its business, according to Winston, due to the rarity of high-quality stones and the time it takes to craft jewelry pieces.
“There are more [ready-to wear] collections, but there’s a limit to how many iconic important jewelry you can make….you can’t put a $700,000 wreath necklace in every store,” he said.
Winston said that his two-year-old son, Blaise, has the contractual option to be a jeweler for one day a year at the firm to retain the company’s family legacy.
“Looking on the outside, [Harry Winston] is one of the few luxury brands we ever created in America,” he said. “My grandfather and father recognized luxury. I have a most romantic feeling in my heart for what we’ve created and what the team has created.”