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A saleswoman displays brands belonging to the Swiss Swatch Group in this file photo.SIGGI BUCHER/Reuters

Harry Winston Diamond Corp. is selling its storied luxury retail unit to Switzerland's Swatch Group Ltd., leaving the company to focus squarely on the business of mining after eight years as a high-end jeweller.

Months after the company said interested parties were circling its diamond jewellery and watch business, Harry Winston said on Monday that it's selling the operation to Swatch for $750-million (U.S.), giving it a healthy cash injection as it eyes an industry ripe for consolidation.

Including $250 million in assumed net debt, the deal has an enterprise value of $1-billion, worth nearly three times what Harry Winston paid for the assets.

For Swatch, the world's number one maker of finished watches, the deal fills a gap in the high-end jewellery business after the collapse of a partnership with Tiffany & Co. in 2011.

"It's a match made in heaven," said Jon Cox, head of Swiss research with Kepler Capital Markets in Geneva.

Once the deal closes, Harry Winston is to be renamed Dominion Diamond Corp., its latest move in recent months to push deeper into diamond mining after agreeing in November to buy a controlling stake in Ekati, Canada's oldest diamond development, from BHP Billiton Ltd.

Analysts say Harry Winston will likely now go after the 60 per cent it does not already own in Diavik, the mine in the Northwest Territories that is adjacent to Ekati and which is majority controlled by global miner Rio Tinto Ltd.

"This transaction represents a sound return on our original investment. It will leave us well equipped to realize upstream opportunities in an environment where cash has become a strategic resource while preserving and expanding our relationship with the downstream diamond business," CEO Robert Gannicott said in announcing the transaction.

BMO Nesbitt Burns analyst Edward Sterck said other companies exploring in northern Canada could also pique the interest of a new Harry Winston, including Mountain Province Diamonds and Stornoway Diamond Corp.

"But I suspect the focus will be more toward Diavik, which is in production and where it is a minority shareholder," he said.

"There are several companies with projects and short of capital; HWD (Harry Winston Diamonds) has experience in diamond mining and now has capital," Irene Nattel, an analyst with RBC Dominion Securities, said in a research report.

Harry Winston was turned into the miner and retailer it is today in 2004, when Canada's Aber Diamond Corp. acquired a controlling stake in Harry Winston Inc., the 70-year-old legacy of a U.S. jeweller famous for lending choice pieces to Hollywood stars and starlets for appearances at the Academy Awards. It acquired the rest of the company in 2006.

Speculation that the retail business would be spun off has swirled for years, but talk intensified in October when the company said it received several expressions of interest.

In selling its retail arm, Harry Winston Diamond becomes one of only a few pure-play diamond miners in the world at a time when prices appear poised to pick up after falling off a cliff in 2011.

Demand could rise as economies recover in the United States and Europe and as the ranks of the middle class swell in China and India, creating new customers for the gemstones.

Harry Winston will retain a relationship with Swatch, one of the world's largest buyers of polished diamonds, in sourcing polished diamonds for the watch company, Harry Winston Diamond said in the news release.

The two companies also plan to explore the potential for a joint diamond-polishing venture.

"Harry Winston does brilliantly complement the prestige segment of the group," said Swatch chairwoman Nayla Hayek.