Harry Winston to Use Swatch Cash for Diamonds Purchases

Posted January 21st, 2013 by Brahm Canzer & filed under Company Analysis, Financial analysis, Financial Planning, Growth & Valuation, Industry Analysis, Management Issues.

Description: Harry Winston Diamond Corp. (HW)’s $1 billion sale of a luxury unit to Swatch Group AG (UHR) provides the cash to invest more in diamond mining, a business that last year was more than twice as profitable as jewelry.

Source: Bloomberg.com

Date: Jan 15, 2013

Link: http://www.bloomberg.com/news/2013-01-15/harry-winston-to-use-swatch-cash-for-diamonds-purchases.html

Questions for Discussions:

Explain the logic of selling the retail division to Swatch in order to finance the development of more mining.
How else could the firm have financed more mining?
Do you think the decision was a good one?
Would you be an investor in either firm today?