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10 Things Rocking the Industry

Jewel Box
By JCK Staff
This story appears in the June 2011 issue of JCK magazine
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1. Royals

The furor over Kate Middleton’s wedding jewels suggests one of two things about Americans: Either we’re bigger fans of the British monarchy than the Brits themselves, or we like a good knockoff. The diamond acorn–and–oak leaf earrings Middleton wore at her April 29 wedding to Prince ­William—designed by Robinson Pelham, the ­London jeweler who used the Middleton family’s coat of arms as inspiration—appeared on QVC just days later in faux pearls and simulated diamonds. Created by Kenneth Jay Lane, they retail for $39.62. The cable channel sold 7,900 units the night the earrings debuted.

(Above) The Duchess of Cambridge was bedecked in diamonds on her big day; (right) QVC’s earrings use simulated stones.

2. Sales

Mother’s Day 2011 showed that things continue to improve for jewelers, even if they still haven’t returned to the level of the good old days. Susan Eisen, owner of Susan Eisen Fine Jewelry and Watches in El Paso, Texas, described her holiday sales as “very good,” theorizing that “people haven’t been spending for the last few years, so when there is an occasion to spend, they spend a little more.” The biggest seller, a few retailers told JCK, was Pandora. Demand for the charm line is “just explosive,” said Mike Warren, owner of Warren Jewellers in Lancaster, Pa., who thinks Pandora’s low price points are attracting new customers: ­“Jewelers were never in competition with flowers or candy. But we are now.”


Pandora’s new macrame bracelet

3. Las Vegas

This month’s JCK show in Las Vegas, in its new sunlit home at the ­Mandalay Bay, has the makings of a blockbuster. (Hotel rooms at Mandalay, ­THEhotel, and the Four Seasons sold out in January!) So do all of the market week shows. Despite soaring material costs, it seems retailers have (mostly) put the recession behind them and are ready to do some serious ­buying. “We finally have people coming in the door,” says Tommy Aucoin Jr., president of Aucoin Hart ­Jewelers in Metairie, La. “Over the last two years, people were resisting temptation. Now, they see an ad, and they come in wanting it.”


Courtesy of Las Vegas News Bureau

The jewels might just outshine the lights of the Vegas strip.

4. De Beers

De Beers has seen a lot of dramatic change over the past decade, but even bigger transformations could be yet to come. On May 16, the diamond giant announced that Philippe Mellier, president of Alstom Transport, would be its new CEO, replacing Gareth Penny, who resigned last July. The 55-year-old Mellier—who has spent most of his career in the car business—is the first outsider in De Beers’ 123-year history to take its top job. Chairman Nicky Oppenheimer told Reuters he hoped Mellier would bring “fresh eyes” to the post.


Philippe Mellier, De Beers’ new CEO

5. Taxes

With governments strapped for cash, many are starting to wonder why Internet merchants don’t have to charge the same sales tax that brick-and-mortar stores do—­particularly for jewelry, where such levies can yield a pretty penny. On April 8, Arkansas Gov. Mike Beebe signed a law requiring online retailers to collect sales tax if they have affiliates in the state. Similar laws are already in place in Hawaii, Illinois, New York, North Carolina, and Rhode Island; at least a dozen other states are considering them. Now Sen. Dick Durbin (D-Ill.) plans to reintroduce the Main Street Fairness Act in Congress; a Durbin spokesman stresses that the legislation, which will be co-sponsored by Sen. Mike Enzi (R-Wyo.), “is not a new tax; it just ensures that the required sales tax is being collected.”


iStockphoto

6. Costco

Costco has come a long way from supersize packs of paper towels. The discount retailer raised eyebrows in April when its website showcased a platinum-set, 6.77 ct., D-color IF diamond solitaire ring retailing for $1 million. That makes it the priciest jewelry item the 480-store chain has been known to offer. (In fact, the site’s next most-expensive diamond ring sells for less than $200,000.) While the Issaquah, Wash.–based company says the ring didn’t find a buyer, Costco is seeking new “extraordinary items” to sell. And it certainly made a statement: Asked London’s Daily Mail, “Is Costco the new Cartier?” 


Arnold Katz
Costco: Where else can you pick up a six-month supply of toilet paper and a 6 ct. diamond ring?

7. Conclave

The American Gem Society ­Conclave is usually all about business. But the most talked-about presentation at the April gathering in San Francisco went straight for the heart. Jim Abbott, the one-handed pitcher who threw a no-hitter for the Yankees in 1993, captivated a lunchtime reception with a candid assessment of his career ups and downs, as well as the struggles that result from being born without a right hand. There weren’t many dry eyes when Abbott recounted his response to his daughter, who asked if he liked his “little hand”: “For a while I didn’t like it,” he said. “It hasn’t always been easy. But it’s taught me that life isn’t always easy, and it isn’t always fair. It’s also taught me that if you believe in who you are, you can accomplish amazing things in this life.” (For more on the AGS Conclave, see News Gems.)


Courtesy of the American Gem Society
Former major league pitcher Jim Abbott

8. Gold

For a while this spring, it seemed the whole world had caught the “gold bug.” It wasn’t enough for the metal to cross the $1,500 barrier for the first time on April 20. Less than two weeks later, on May 2, it smashed another record—$1,570. All this for a commodity that had only surpassed $1,400 for the first time last November. And while at press time gold’s spot price had dipped back down below $1,500, many suspect its incredible bull run is not yet over. When Reuters surveyed 12 leading analysts about the metal’s prospects, the consensus was it could reach $1,700 by 2015.


iStockphoto

9. Papal Jewels

In 1965, Pope Paul VI donated his personal papal ring and ­pectoral cross to the United Nations during a visit to America, in the hope that the items would be auctioned off to benefit charity. Forty-six years later, his wish was granted—sort of—in an unlikely venue: eBay. The platinum 12.75 ct. diamond solitaire ring and the gold-mount pectoral cross—both featuring Pope Paul VI’s seal—went live on eBay April 11, with ­starting bids of $800,000 each. The widow of the man who bought the ring and cross in the 1970s approached Alan Perry, the owner of Perry’s Emporium in Wilmington, N.C., to help her sell the items. Though Perry says the jewels garnered great interest and multiple offers (up to $600,000), they ultimately failed to find buyers. He will, however, continue to peddle the papal pieces offline. “I really want to sell it for [the owner] because her children get funds from the sale,” he says.


The jewels of the late Pope Paul VI, a.k.a. Giovanni Battista Montini

 

10. Stats

“Everything continues to turn slightly upwards,” says Jewelers Board of Trade president Dione Kenyon. “Anecdotally, people tell me things got quieter in April, but they are still doing business. It’s mostly silver, but at least it’s business.” And while luxury shoppers seem to be returning to stores, other ­consumers remain cautious. “We still have a lot of issues with the ­housing ­market and the job market,” Kenyon says. “A lot of people aren’t out of the woods yet.” One growing issue for diamond wholesalers: the increasing gap between rough and polished prices: “I’m sensing that’s beginning to be a problem.”

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