At Tiffany, Tanzanite is Back in the Case

By Gary Roskin, G.G., FGA, Senior Editor -- JCK Online, 9/1/2002 2:00:00 AM

Tanzanite is on the rebound: With little fanfare, retail giant Tiffany quietly put tanzanite jewelry back in its showcases in late June. "Based on lack of credible evidence linking tanzanite and terrorism as well as progress to further controls over trade in tanzanite, Tiffany & Co. has resumed the sale of jewelry containing this gemstone," said Tiffany public relations director Linda Buckley.

Following a report in the Wall Street Journal last October alleging an al Qaeda-tanzanite connection, major retail jewelers including QVC, Birks, Peoples, Wal-Mart, Zale Corp., and Tiffany & Co. suspended sales of the gem. Since February, U.S. State Department representative Michael O'Keefe has repeatedly told the jewelry industry that there is no evidence that any terrorist organization is funding operations through the sale of tanzanite.

"The decision by Tiffany and Zale to embrace tanzanite is a result of the industry working to transform, regulate, and revitalize the tanzanite trade, with the support of trade organizations, the Tanzanian government, and the U.S. government," says AFGEM spokesperson Joanne Herbstein. AFGEM is the South African mining firm that leases Block C, a large portion of Tanzania's Mererani tanzanite deposit. AFGEM plans to launch an international marketing campaign once steady production has been achieved, presumably sometime during the next few months.

Boscov's department stores ran a successful series of tanzanite trunk shows in July, advertised as the "world's largest exclusive Arusha tanzanite gem show and sale." Boscov's, founded in 1911, is a family-owned company based in Reading, Pa., that operates 38 stores in Pennsylvania, Delaware, Maryland, New Jersey, and New York.

Debra Puzio, a fine-jewelry buyer for Boscov's, said the store never pulled tanzanite from its showcases, "even in the wake of all of the allegations."

Suspending tanzanite sales was too dramatic a response, says Puzio—and inconsistent. "Nobody pulled diamonds from the shelf when they were being labeled as 'conflict' diamonds," she notes. "We have a moral obligation to our customers, and that was a good, positive thing. So we put together the show with Le Vian. The desire [for tanzanite] is still very strong. And we have had no negative feedback from anyone [regarding] the alleged connection."

The Arusha tanzanite comes from Le Vian, a well-known supplier of high-end colored stone and diamond jewelry. CEO Eddie LeVian is thrilled that the allegations of a tanzanite-terrorist connection have been found to be false. "I'm patriotic, and nothing would be worse for me than to unwittingly help the enemy," he says.

LeVian, who has been in the tanzanite business since 1980, notes that tanzanite sales had tapered off even before the Wall Street Journal story but have rebounded in the past few months and are once again brisk. "I attribute the cycle to the availability of fine goods," he says. "When the fine goods were not available, and lighter stones were on the market, sales declined. More recently, with many finer stones being released, customers started to buy again. The consumer seems to understand quality and seems to respond to it."

According to LeVian, fine-quality goods should be commanding high prices. "I believe that the lower-quality goods will actually be the same or lower in value, but the finer gems will increase dramatically," he says.

LeVian also points out that the supply of tanzanite is finite, since there is only one source. "There's probably about an 18-year to 19-year supply left before it's completely depleted," he says. He sees the future tanzanite market as one where it's not "who has a tanzanite," but "which lady has the nicest tanzanite."