Blue Nile Chairman to Step Down As Company Posts 5th Consecutive Quarter of Double-Digit Growth

Blue Nile Starlight Diamond Eternity Ring in platinum

Blue Nile, Inc. said Thursday that year-over-year net sales increased 18.7 percent to $108 million for the second quarter ended June 30. Operating income for the quarter totaled $3.4 million, representing an operating margin of 3.2 percent of net sales. Net income totaled $2.2 million, or $0.17 per diluted share. It’s the fifth consecutive quarter of double-digit growth, the company said.

In addition, the Seattle-based online retailer that specializes in diamonds and diamond jewelry announced that its founder, Mark Vadon, will step down from his role as chairman and director of the board effective December 31. Blue Nile President and CEO Harvey Kanter will assume the role of chairman.

"Founding and being a part of Blue Nile for the past 14 years has been a great honor, and I am tremendously proud of the entire team for fostering our culture of innovation and obsession over each and every customer," Vadon said. "After working with Harvey and his leadership team over the last year and seeing the impressive growth trajectory of the business, the entire board and I feel confident passing the chairmanship to Harvey to continue to build a global consumer brand."

"Mark revolutionized the diamond industry and founded Blue Nile on the principle that there is a better way to buy diamonds and fine jewelry by offering unique online tools, high quality diamonds, and incredible values," Kanter added. "That is and will always be his legacy, and the company will continue to execute his vision."

Non-GAAP adjusted EBITDA for the quarter totaled $5.5 million. For the trailing 12-month period ended June 30, net cash provided by operating activities totaled $26.1 million compared to $18.7 million for the prior 12-month period. For the same period ended June 30, non-GAAP free cash flow totaled $22.9 million, as compared to $15.6 million for the prior.

Other second quarter highlights include:

* U.S. engagement net sales increased 22 percent to $63.9 million.

* U.S. non-engagement net sales increased 11.3 percent to $27 million.

* International net sales increased 19.1 percent to $17.1 million. Excluding the impact from changes in foreign exchange rates, international net sales increased 20.6 percent.

*Gross profit totaled $20.1 million. As a percent of net sales, gross profit was 18.6 percent compared to 18.9 percent for the second quarter of 2012.

* Selling, general and administrative expenses were $16.7 million, compared to $14.9 million in the second quarter of 2012. This figure includes stock-based compensation expense of $1.3 million for the second quarter in 2013 and 2012.

* Earnings per diluted share included stock based compensation expense of $0.07 compared to $0.06 for the second quarter of 2012.

* At the end of the quarter, cash and cash equivalents totaled $47.3 million.

In its financial guidance, Blue Nile said it expects third quarter net sales are expected to be between $96 million and $100 million; and earnings per diluted share to run from $0.13 to $0.17.

For the 2013 fiscal year, net sales are projected to be between $440 million and $470 million; and earnings per diluted share are projected at $0.75 to $0.85.

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Blue Nile Starlight Diamond Eternity Ring in platinum

Blue Nile, Inc. said Thursday that year-over-year net sales increased 18.7 percent to $108 million for the second quarter ended June 30. Operating income for the quarter totaled $3.4 million, representing an operating margin of 3.2 percent of net sales. Net income totaled $2.2 million, or $0.17 per diluted share. It’s the fifth consecutive quarter of double-digit growth, the company said.

In addition, the Seattle-based online retailer that specializes in diamonds and diamond jewelry announced that its founder, Mark Vadon, will step down from his role as chairman and director of the board effective December 31. Blue Nile President and CEO Harvey Kanter will assume the role of chairman.

"Founding and being a part of Blue Nile for the past 14 years has been a great honor, and I am tremendously proud of the entire team for fostering our culture of innovation and obsession over each and every customer," Vadon said. "After working with Harvey and his leadership team over the last year and seeing the impressive growth trajectory of the business, the entire board and I feel confident passing the chairmanship to Harvey to continue to build a global consumer brand."

"Mark revolutionized the diamond industry and founded Blue Nile on the principle that there is a better way to buy diamonds and fine jewelry by offering unique online tools, high quality diamonds, and incredible values," Kanter added. "That is and will always be his legacy, and the company will continue to execute his vision."

Non-GAAP adjusted EBITDA for the quarter totaled $5.5 million. For the trailing 12-month period ended June 30, net cash provided by operating activities totaled $26.1 million compared to $18.7 million for the prior 12-month period. For the same period ended June 30, non-GAAP free cash flow totaled $22.9 million, as compared to $15.6 million for the prior.

Other second quarter highlights include:

* U.S. engagement net sales increased 22 percent to $63.9 million.

* U.S. non-engagement net sales increased 11.3 percent to $27 million.

* International net sales increased 19.1 percent to $17.1 million. Excluding the impact from changes in foreign exchange rates, international net sales increased 20.6 percent.

*Gross profit totaled $20.1 million. As a percent of net sales, gross profit was 18.6 percent compared to 18.9 percent for the second quarter of 2012.

* Selling, general and administrative expenses were $16.7 million, compared to $14.9 million in the second quarter of 2012. This figure includes stock-based compensation expense of $1.3 million for the second quarter in 2013 and 2012.

* Earnings per diluted share included stock based compensation expense of $0.07 compared to $0.06 for the second quarter of 2012.

* At the end of the quarter, cash and cash equivalents totaled $47.3 million.

In its financial guidance, Blue Nile said it expects third quarter net sales are expected to be between $96 million and $100 million; and earnings per diluted share to run from $0.13 to $0.17.

For the 2013 fiscal year, net sales are projected to be between $440 million and $470 million; and earnings per diluted share are projected at $0.75 to $0.85.

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Signet Replaces CEO for UK Division

Signet Jewelers said Tuesday that Rob Anderson, CEO of Signet's UK division, will leave the company at the end of July. He will be replaced by Sebastian Hobbs who has been promoted to the new position of managing director for the UK division, effective immediately. Hobbs will report to Mike Barnes, Signet CEO.

The Bermuda-based company is the largest specialty retail jeweler in the US and UK with approximately 1,952 stores (1,449 in the US and 503 in the UK). Its retail chains in the US include Kay, Jared and Ultra Diamonds. In the UK, it owns and operates the H.Samuel and Ernest Jones jewelry chains.

“Seb has made important contributions to our UK division and we believe his experience in UK retailing and strategy make him a perfect fit for this role,” Barnes said.

Hobbs joined Signet's UK division as commercial director in March 2011. From November 2006 till March 2011, he was commercial director of Blacks Leisure Group. Prior to this, he was trading controller for WH Smith, a retail consultant for KPMG, and held management positions at Mothercare and British Home Stores.

Signet’s UK division has been struggling since the financial crisis. In its 2013 fiscal year, the division reported that sales fell 0.8 percent to $709.5 million. Same store sales increased 0.3 percent compared to an increase of 0.9 percent in Fiscal 2012. Sales performance was primarily attributed to lower traffic particularly in the fourth quarter.

By contrast, US division sales for the 2013 fiscal year increased 7.9 percent to $3.27 billion. Same store sales increased 4 percent for the year compared to an increase of 11.1 percent in Fiscal 2012.

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Signet Jewelers said Tuesday that Rob Anderson, CEO of Signet's UK division, will leave the company at the end of July. He will be replaced by Sebastian Hobbs who has been promoted to the new position of managing director for the UK division, effective immediately. Hobbs will report to Mike Barnes, Signet CEO.

The Bermuda-based company is the largest specialty retail jeweler in the US and UK with approximately 1,952 stores (1,449 in the US and 503 in the UK). Its retail chains in the US include Kay, Jared and Ultra Diamonds. In the UK, it owns and operates the H.Samuel and Ernest Jones jewelry chains.

“Seb has made important contributions to our UK division and we believe his experience in UK retailing and strategy make him a perfect fit for this role,” Barnes said.

Hobbs joined Signet's UK division as commercial director in March 2011. From November 2006 till March 2011, he was commercial director of Blacks Leisure Group. Prior to this, he was trading controller for WH Smith, a retail consultant for KPMG, and held management positions at Mothercare and British Home Stores.

Signet’s UK division has been struggling since the financial crisis. In its 2013 fiscal year, the division reported that sales fell 0.8 percent to $709.5 million. Same store sales increased 0.3 percent compared to an increase of 0.9 percent in Fiscal 2012. Sales performance was primarily attributed to lower traffic particularly in the fourth quarter.

By contrast, US division sales for the 2013 fiscal year increased 7.9 percent to $3.27 billion. Same store sales increased 4 percent for the year compared to an increase of 11.1 percent in Fiscal 2012.

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Saint Laurent Gets a New CEO

©Hedi Slimane

Francesca Bellettini has been named the new CEO of Yves Saint Laurent. She will take over the top spot at the fashion house on September 1, replacing Paul Deneve, who has taken a position in the high tech industry.

Bellettini is currently an executive director at Bottega Veneta. Both Bottega Veneta and Yves Saint Laurent are owned by Kering, formerly known as PPR, which announced the appointment Tuesday. The French holding company specializes in owning brands in the luxury, sports and lifestyle segments of the apparel and accessories market. Yves Saint Laurent designs apparel and accessories that range from read-to-wear clothing to jewelry. While the brand is best-known to the public as Yves Saint Laurent, Kering had officially changed the brand name in 2012 to Saint Laurent.

“Her experience within the group and in the industry, her expertise and her determination persuaded me of her ability to implement Saint Laurent day-to-day strategy,” said François-Henri Pinault, chairman and CEO of Kering.

Bellettini, an Italian national, joined Bottega Veneta in November 2008 as worldwide merchandising director. She was promoted to worldwide merchandising-communications director in November 2010 and has been responsible for implementing strategic direction for the company, while overseeing all aspects of merchandising, visual display and communication.

She previously was the strategic planning director and associate worldwide merchandising director of Gucci. Prior to Gucci, she was operations manager of Helmut Lang, having previously worked at the Prada Group in 2002 as part of the planning & new business development division. After graduating from Bocconi University in Milan, Bellettini started her career in London as an investment banker, working at Goldman Sachs International, Deutsche Morgan Grenfell, and Compass Partners International.

In addition to the appointment of Bellettini, Yves Saint Laurent creative director, Hedi Slimane, will have added responsibilities that include supervising all strategic projects in a plan to transform and reposition the brand.

“Hedi Slimane has a clear creative vision for Saint Laurent,” Pinault said. “He has successfully rejuvenated and repositioned the brand in line with Yves Saint Laurent’s original message in 1966. This reform project was essential to ensure that Saint Laurent is in step with the times, and to secure its success. Today, the brand is one of the world’s most prominent fashion houses and my ambition is that Saint Laurent is able to realize its considerable long term potential for growth.”

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Website.

©Hedi Slimane

Francesca Bellettini has been named the new CEO of Yves Saint Laurent. She will take over the top spot at the fashion house on September 1, replacing Paul Deneve, who has taken a position in the high tech industry.

Bellettini is currently an executive director at Bottega Veneta. Both Bottega Veneta and Yves Saint Laurent are owned by Kering, formerly known as PPR, which announced the appointment Tuesday. The French holding company specializes in owning brands in the luxury, sports and lifestyle segments of the apparel and accessories market. Yves Saint Laurent designs apparel and accessories that range from read-to-wear clothing to jewelry. While the brand is best-known to the public as Yves Saint Laurent, Kering had officially changed the brand name in 2012 to Saint Laurent.

“Her experience within the group and in the industry, her expertise and her determination persuaded me of her ability to implement Saint Laurent day-to-day strategy,” said François-Henri Pinault, chairman and CEO of Kering.

Bellettini, an Italian national, joined Bottega Veneta in November 2008 as worldwide merchandising director. She was promoted to worldwide merchandising-communications director in November 2010 and has been responsible for implementing strategic direction for the company, while overseeing all aspects of merchandising, visual display and communication.

She previously was the strategic planning director and associate worldwide merchandising director of Gucci. Prior to Gucci, she was operations manager of Helmut Lang, having previously worked at the Prada Group in 2002 as part of the planning & new business development division. After graduating from Bocconi University in Milan, Bellettini started her career in London as an investment banker, working at Goldman Sachs International, Deutsche Morgan Grenfell, and Compass Partners International.

In addition to the appointment of Bellettini, Yves Saint Laurent creative director, Hedi Slimane, will have added responsibilities that include supervising all strategic projects in a plan to transform and reposition the brand.

“Hedi Slimane has a clear creative vision for Saint Laurent,” Pinault said. “He has successfully rejuvenated and repositioned the brand in line with Yves Saint Laurent’s original message in 1966. This reform project was essential to ensure that Saint Laurent is in step with the times, and to secure its success. Today, the brand is one of the world’s most prominent fashion houses and my ambition is that Saint Laurent is able to realize its considerable long term potential for growth.”

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GIA President Donna Baker Resigns

Donna Baker

Donna M. Baker suddenly resigned as president and CEO of the Gemological Institute of America due to “differing views on the direction of GIA,” according to a statement issued late Thursday from the organization that bills itself as “the world’s foremost authority in gemology.”

Board of Governors Chairwoman, Susan M. Jacques, president and CEO of Borsheims Fine Jewelry and Gifts, will serve as interim president and CEO while the board conducts a search for a new executive.

Tom Moses, senior VP of Laboratory and Research will continue overseeing all of GIA’s global laboratory operations. Bev Hori, VP of Education and chief learning officer, will continue to lead GIA’s gemological and industry education efforts. No other changes in management are anticipated, GIA said in its statement.

Established in 1931, the “Institute,” as it is known, invented the famous 4Cs of Color, Cut, Clarity and Carat Weight in the early 1950s and in 1953, created the International Diamond Grading System that is recognized by virtually every professional jeweler in the world. It is the leading source of knowledge, standards, and education in gems and jewelry with offices and educational facilities throughout the world. Its headquarters is in Carlsbad, Calif.

Baker is only the fifth person and the first woman to lead the organization. She joined GIA in 2001 serving as senior VP and general counsel before being named acting president in May of 2006. The position became permanent in November of the same year.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Website.

Donna Baker

Donna M. Baker suddenly resigned as president and CEO of the Gemological Institute of America due to “differing views on the direction of GIA,” according to a statement issued late Thursday from the organization that bills itself as “the world’s foremost authority in gemology.”

Board of Governors Chairwoman, Susan M. Jacques, president and CEO of Borsheims Fine Jewelry and Gifts, will serve as interim president and CEO while the board conducts a search for a new executive.

Tom Moses, senior VP of Laboratory and Research will continue overseeing all of GIA’s global laboratory operations. Bev Hori, VP of Education and chief learning officer, will continue to lead GIA’s gemological and industry education efforts. No other changes in management are anticipated, GIA said in its statement.

Established in 1931, the “Institute,” as it is known, invented the famous 4Cs of Color, Cut, Clarity and Carat Weight in the early 1950s and in 1953, created the International Diamond Grading System that is recognized by virtually every professional jeweler in the world. It is the leading source of knowledge, standards, and education in gems and jewelry with offices and educational facilities throughout the world. Its headquarters is in Carlsbad, Calif.

Baker is only the fifth person and the first woman to lead the organization. She joined GIA in 2001 serving as senior VP and general counsel before being named acting president in May of 2006. The position became permanent in November of the same year.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Website.

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Richemont Announces Leadership Changes at Montblanc and Jaeger-LeCoultre

Lutz Bethge

Lutz Bethge, CEO of luxury brand Montblanc International, will leave the post to serve as non-executive chairman and head of the Supervisory Board of Montblanc. He will be replaced July 1 by Jérôme Lambert, CEO of Jaeger-LeCoultre. Also at that time Daniel Riedo, currently Industrial director of Jaeger-LeCoultre, will become the luxury watch brand’s CEO.

The announcements were made Wednesday by luxury holding company, Richemont, which owns both brands.

In his new position, Bethge will represent Montblanc externally and will be an advisor to the luxury brand on strategic matters. Bethge has spent 23 years in various roles with Montblanc, becoming CEO in 2007. He is credited for moving the luxury brand from a traditional writing instrument manufacturer to a diverse luxury brand, adding watches, leather goods and jewelry to its product line.

“The Maison has been recognized as a legitimate player in the watch business, providing continued and significant growth,” Richemont said in its statement.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Website.

Lutz Bethge

Lutz Bethge, CEO of luxury brand Montblanc International, will leave the post to serve as non-executive chairman and head of the Supervisory Board of Montblanc. He will be replaced July 1 by Jérôme Lambert, CEO of Jaeger-LeCoultre. Also at that time Daniel Riedo, currently Industrial director of Jaeger-LeCoultre, will become the luxury watch brand’s CEO.

The announcements were made Wednesday by luxury holding company, Richemont, which owns both brands.

In his new position, Bethge will represent Montblanc externally and will be an advisor to the luxury brand on strategic matters. Bethge has spent 23 years in various roles with Montblanc, becoming CEO in 2007. He is credited for moving the luxury brand from a traditional writing instrument manufacturer to a diverse luxury brand, adding watches, leather goods and jewelry to its product line.

“The Maison has been recognized as a legitimate player in the watch business, providing continued and significant growth,” Richemont said in its statement.

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Richemont Names Joint CEOs to Replace Johann Rupert

Johann Rupert to step down as
executive chairman and CEO.

The Board of Compagnie Financière Richemont SA announced Friday that it has approved a number of senior management changes, culminating with a change at the top of the company’s management structure. The announcement came as the luxury goods conglomerate reported a 21 percent increase in sales and a 52 percent increase in profit for the first half of the fiscal year.

Bernard Fornas, currently Cartier CEO, and Richard Lepeu, currently Richemont deputy CEO, will become joint CEOs of Richemont on April 1, 2013, under a succession plan that begins to go into effect on Jan. 1, 2013.

As previously announced, Stanislas de Quercize, currently CEO of Van Cleef & Arpels, will succeed Fornas as CEO of Cartier on Jan. 1, 2013. On the same date, Fornas and Lepeu will be appointed as joint deputy CEOs, reporting to Johann Rupert, executive chairman and CEO.

Rupert returned to the role of Richemont CEO when Norbert Platt, who held the position, took early retirement due to ill health in 2010. Rupert will step down from that role on March 31, 2013.

The following day, Fornas and Lepeu will become joint CEOs. Fornas will oversee Richemont’s maisons while Lepeu will continue to oversee Richemont’s central functions. Fornas and Lepeu together with Gary Saage, CFO, will form a senior executive committee for Richemont.

In addition, the Board approved certain changes to Richemont’s Group Management Committee.

The following executives will join the Group Management Committee, effective immediately: Lutz Bethge, CEO of Montblanc; Hans-Peter Bichelmeier, Group Operations director; Stanislas de Quercize; Georges Kern, CEO of IWC Schaffhausen; Jérôme Lambert, CEO of Jaeger-LeCoultre; and Philippe Léopold-Metzger, CEO of Piaget.

The following executives will retain their responsibilities but, reflecting the changed role of the Group Management Committee, will resign from the committee by the end of the current financial year: Giampiero Bodino, Group art director; Alan Grieve, director of Corporate Affairs; Mr Eloy Michotte, corporate finance director; and Jan Rupert, executive director.

Richemont, based in Geneva, owns many of the world’s best-known luxury brands (called “maisons” by the company) including Cartier, Montblanc, Vacheron Constantin, Van Cleef & Arpels and Piaget. It also has wholesale businesses and owns the luxury retail website, Net-A-Porter.com. A list of its businesses can be found by following this link.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Web site.

Johann Rupert to step down as
executive chairman and CEO.

The Board of Compagnie Financière Richemont SA announced Friday that it has approved a number of senior management changes, culminating with a change at the top of the company’s management structure. The announcement came as the luxury goods conglomerate reported a 21 percent increase in sales and a 52 percent increase in profit for the first half of the fiscal year.

Bernard Fornas, currently Cartier CEO, and Richard Lepeu, currently Richemont deputy CEO, will become joint CEOs of Richemont on April 1, 2013, under a succession plan that begins to go into effect on Jan. 1, 2013.

As previously announced, Stanislas de Quercize, currently CEO of Van Cleef & Arpels, will succeed Fornas as CEO of Cartier on Jan. 1, 2013. On the same date, Fornas and Lepeu will be appointed as joint deputy CEOs, reporting to Johann Rupert, executive chairman and CEO.

Rupert returned to the role of Richemont CEO when Norbert Platt, who held the position, took early retirement due to ill health in 2010. Rupert will step down from that role on March 31, 2013.

The following day, Fornas and Lepeu will become joint CEOs. Fornas will oversee Richemont’s maisons while Lepeu will continue to oversee Richemont’s central functions. Fornas and Lepeu together with Gary Saage, CFO, will form a senior executive committee for Richemont.

In addition, the Board approved certain changes to Richemont’s Group Management Committee.

The following executives will join the Group Management Committee, effective immediately: Lutz Bethge, CEO of Montblanc; Hans-Peter Bichelmeier, Group Operations director; Stanislas de Quercize; Georges Kern, CEO of IWC Schaffhausen; Jérôme Lambert, CEO of Jaeger-LeCoultre; and Philippe Léopold-Metzger, CEO of Piaget.

The following executives will retain their responsibilities but, reflecting the changed role of the Group Management Committee, will resign from the committee by the end of the current financial year: Giampiero Bodino, Group art director; Alan Grieve, director of Corporate Affairs; Mr Eloy Michotte, corporate finance director; and Jan Rupert, executive director.

Richemont, based in Geneva, owns many of the world’s best-known luxury brands (called “maisons” by the company) including Cartier, Montblanc, Vacheron Constantin, Van Cleef & Arpels and Piaget. It also has wholesale businesses and owns the luxury retail website, Net-A-Porter.com. A list of its businesses can be found by following this link.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Web site.

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