Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Irene Nattel - RBC Capital Markets.
Irene Nattel - RBC Capital Markets
I was wondering if you could just address what you are seeing in the market place as we move through Q4, both from the retail demand perspective, as we have seen commodity prices continue to come down, what you are seeing and you’re experiencing from a rough diamond pricing perspective, and whether as we look into FY2010 you would give any consideration to perhaps reducing the number of your rough diamond sales.
Robert A. Gannicott
Just on the rough diamond side, the only bit of, perhaps slight scintilla of good news at the moment, is there does seem to be a sense of some sort of stability returning to some extent. Some customers that had disappeared back in October that have now got their hands up again to come back in on the market, and so on. But I would stress that one has to look pretty hard at the moment for signs of stability.
Going forward from here, obviously the process that is going on at the moment is classic leveraging. There is a diamond supply chain, known as the diamond pipeline, as you know, and that is sort of being emptied out as the jewelers at one end don’t replace sold inventory because of concern about looking forward and that means they don’t reorder jewelry; that means the jewelry manufacturers don’t reorder polished; it means that the people that are polishing rough diamonds don’t be getting rough diamonds in the meantime.
So the market is sort of somewhat stuck at the moment, but perhaps there is a sign of this beginning to open up again.
Would we consider reducing the number of sales? No, because a lot of our regular customers depend on regular supply to feed their factories. And most of these businesses are still moving forward in a quite significant way.
Would we consider holding back some material that is difficult sell during this sort of period? Yes, we would. In fact, we do have some quite modest, but we do have some stocks on hand at the moment.
Thomas J. O'Neill
Alan talked a little bit about the third quarter in terms of our retail segment sales. August, the first month of the quarter, actually was fairly strong. It was consistent with the first six months. Even the first two weeks of September were good for us. We hit a point in mid-September where business became very difficult, but then in October it went up again. So it was spotty for us through the third quarter.
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