JA Unveils Comprehensive Action Plan

After a year of pilot programs and intensive study of its own organization, the jewelry market and consumers’ interests and needs, Jewelers of America has redefined its purpose and identified projects to focus on in the future.

JA’s new mission statement reads: “The Jewelers of America is the national trade association for its member jewelers. JA is both a center of knowledge for the jeweler and advocate for professionalism and high ethical standards in the jewelry trade.

“The JA mission is to assist all members in improving their business skills and profitability. JA will provide access to meaningful educational programs and services, leadership in public and industry affairs and encourage members with common interests to act in their and the industry’s best interests.”

JAidentifies three key trends:

* A rapidly changing retail marketplace that continues to diversify.

* Challenges to everyday business success that include gemstone treatment, consumer disclosure, appraisals, truth-in-content and truth-in-pricing.

* A negative perception among consumers of jewelry retailers.

JA’s response to these trends is:

* To develop a standard of ethics for jewelers.

* To act as a leader, unifier and healer so the industry presents a united front on enhancing consumers’ perception of jewelers’ honesty and integrity.

* To offer top-quality educational programs that are available to owners, managers and bench jewelers even at the most local level.

* To offer better services.

* To improve its relationship with state affiliates through teamwork and increased interaction between the national and state levels.

JA identified its goals and wrote the mission statement after a year of research. During the year, the national organization also supported affiliates’ pilot programs on organizational development, education and truth-in-pricing. JA directors, affiliate representatives and members also are working on task forces on membership, technology, the Internet and JA’s governance. In addition, JA held forums with leaders of industry organizations to discuss how to work together and cut down on duplication of effort.

From the American Gem Society to the Gemological Institute of America, from the Jewelers Vigilance Committee to the Jewelers’ Security Alliance and many more organizations, all have made a commitment to follow JA’s lead and work cooperatively rather than competitively with each other.

JA also will support affiliates with its new Venture Fund, which will give affiliates money to develop revenue-producing programs. Once an affiliate has a program in place and revenue is flowing, it will return JA’s investment without

interest.

To help reach all the new goals, JA has reorganized and expanded its staff, says Matthew Runci, JA’s executive director. Dave Rocha, who was chief operating officer and senior vice president at Manufacturing Jewelers & Silversmiths of America, was hired as deputy director of operations of JA; Cindy DiCaro was promoted to office manager; Beverly Hori-Ankrom, formerly head of corporate and association education at GIA, was named director of education; Mark Mann, formerly head of the jewelry manufacturing arts department at GIA, was named director of professional certification; and Alan Leopold was named deputy director of affiliate relations.

Since JA sold its trade shows to the Blenheim Group for $36.5 million in 1991, the pressure has been on to spend more on member affiliates. But preserving capital is a top priority. Close to 90% of JA’s $4 million annual budget derives from the interest and dividends on its principal, which had grown to nearly $60 million by the time Runci took over last year. The remaining 10% comes from membership dues and royalties from the JA shows. (All but $10 of JA dues are sent to member affiliates).

NEW DETECTORS REVEAL SYNTHETIC DIAMONDS

Jewelers and the diamond trade shouldn’t worry about synthetic diamonds slipping through as naturals. The reason: a new detection system developed by De Beers can effectively screen them out, according to a report in the Fall ’96 issue of Gems & Gemology, the Gemological Institute of America’s quarterly magazine.

The report was written by De Beers researchers Christopher M. Welbourn and Paul M. Spear and Research Director Martin Cooper.They tested two units — DiamondSure and DiamondView — and found them to be effective on known synthetics. They also say the detectors probably can be manufactured in sufficient volume to be used by the industry in general.

The first line of defense is DiamondSure, which can view 10 to 15 stones per minute. It uses a pen-like probe to measure light concentrated into a small region of the spectrum centered on 415 nanometers. This “415 line” is present in 95% of naturals but no known synthetics.

If the machine detects the 415 line, it displays the message “pass.” If it does not see the line, the message reads “refer for further tests.” If dark or strongly colored yellow or yellow-brown diamonds are measured, the unit may flash the message “insufficient light.” However, researchers were able to get a reading for every diamond tested. Large diamonds may trigger the “insufficient light” message also, but repositioning the probe on the stone will often produce a valid measurement.

De Beers tested the unit with 1,808 randomly chosen polished natural diamonds, most weighing 0.25 carat to 1 carat, but some as small as .006 carat and some as large as 15.06 carats. The colors were D to R, along with browns and fancy yellows. The unit was less effective with D colors because of their near total lack of body color. Of 20 such diamonds of various shapes that GIA tested, eight were referred for further testing.

The test then evaluated 98 De Beers-produced synthetic diamonds in different shades and intensities of yellow, blue and near colorless. A number of Russian-produced synthetics were tested also. In all cases, the machine referred the synthetic diamonds for further testing.

Further testing: When the DiamondSure refers a stone for further testing, the DiamondView comes into play.This larger, more sophisticated detector measures a type of fluorescence unique to all known synthetics.

This works, say the authors of the report, because the basic growth structure of synthetics is quite different from that of natural diamonds. These details can be measured from the fluorescence pattern created by differing impurity concentrations between growth sectors and growth bands. These distinctive patterns are “quite easy to recognize,” says the report, and positively identify synthetics.

The researchers tested 150 randomly chosen natural diamonds, including a .03-ct. diamond mounted in an eight-claw ring setting. The unit was tested on “a complete range” of synthetics, including Russian, De Beers and Sumitomo products. All were recognized quickly as synthetic.

The two units are not in mass production yet, though some are being installed in gem labs around the world for further testing and possible “defense” use should commercial synthetics enter the market in more significant numbers. The authors estimate that commercial models of the DiamondSure will cost a few thousand dollars, while the DiamondView may cost 10 times that amount.

DEALERS IGNORE BIG STONES AT NEW YORK AUCTIONS

A 101.31-ct. heart-shaped diamond and some million-dollar necklaces and rings grabbed advance publicity for Christie’s and Sotheby’s in New York City this fall, but passed through auctions with little notice from dealers.

In accordance with low presale expectations from the auction houses’ jewelry departments, bidding was slow and interest limited to lower prices at the sales of Magnificent Jewels the week of Oct. 21. Sotheby’s achieved a disappointing total of $22.5 million, selling 71% of the lots offered. Christie’s did better two days later, selling 79% of the lots for a total of $31.4 million.

“There was a lot of interest up to the $300,000 to $400,000 range, and then resistance over that,” says John Block, international jewelry director for Sotheby’s. The top lot, a 19th

century necklace with 23 cushion-shaped sapphires within borders of old-mine-cut diamonds, sold for $2.7 million after auction-goers watched $3 million pieces pass with no bids.

Sotheby’s did not expect a great sale because the high-priced lots were dominated by trade goods, Block says. “This is what happens when you don’t feature really interesting estate pieces,” he says. He also says there’s a thin market for colored stones now.

Pearls bucked the trend. Nearly all pearl pieces sold, including several exceptional South Seas pearl necklaces and a strand of natural pearls.

Broken heart for big stones: The much-publicized 101.31-ct. heart-shaped diamond went down without meeting the reserve price at Christie’s. Bidding began at $8 million but never came close to meeting the $14 million to $15 million reserve. “We probably wouldn’t have put this stone into the sale, but because it was so very rare, we thought it might sell,” says Francois Curiel, Christie’s international jewelry director. “What we probably won’t do for a while now is handle very large stones from cutters.”

Sheikh Ahmed Hassan Fitaihi, the Middle Eastern diamond buyer who has been known to make or break sales at the auction houses, bid on the piece and made a low offer after the sale, but did not extend his price to purchase the diamond. Like Curiel, he believes the days of big stones are over. “I was saying two years ago that there was no space for the big stones anymore,” Fitaihi says. “The ladies are not using as much jewelry now.”

Fitaihi did buy the top lot of the day, a diamond cluster necklace (about 252 carats t.w.) for $1.9 million. Christie’s also sold a fancy intense blue and colorless diamond ring for $1.2 million and a Harry Winston diamond necklace from the collection of Lyn Revson for $904,500.

Fitaihi says Christie’s set its reserves lower than its estimates in this sale, so bidding reached the reserves and pieces sold more frequently than in the Sotheby’s sale.

GIA NAMES CAMPUS AFTER DONOR

The Gemological Institute of America announced that Robert Mouawad of the Mouawad Group has made a $6.8 million donation. This prompted GIA to name its new world headquarters in Carlsbad, Cal., the Robert Mouawad Campus. The announcement came during the dedication of the Carlsbad facility in November.

Mouawad is a familiar bidder for top diamonds at Christie’s and Sotheby’s and also heads his family’s jewelry operations, which include a manufacturing site in Bangkok; jewelry-making operations in Paris and Jeddah, Saudi Arabia; and diamond buying and cutting offices in Antwerp.

“Robert Mouawad and his sons have made their hundred-year-old firm into one of the largest jewelry concerns in the world through their dedication to exploring new directions for the jewelry industry and continually improving its standards,” says GIA President Bill Boyajian. “As such, Robert Mouawad’s goals are a perfect fit with those of GIA. We are pleased and honored to receive this very generous contribution.”

REAL JEWELRY MONTH PROMOS SPARKLE

Jewelers of America’s celebration of Real Jewelry Month in November was aided by consumer magazines, trade groups and individual jewelers tying in with the association’s promotion efforts.

The Diamond Information Center and Elle magazine presented the Diamonds Today Signature Collection of 30 award-winning pieces at jewelry stores around the country. The International Colored Gemstone Association sponsored ruby jewelry events at five stores (see cover story “Oh Heavenly Rubies!” p. 40). And the Jewelry Information Center invited readers of Elle and Elle Decor magazines to explain in 10 words or fewer why they think fine jewelry is special. The winning entry will receive a $2,000 gift certificate to use at a favorite jeweler.

JA also provided copy and photographs to regional magazines, which resulted in over 20 special advertising sections. Many JA jewelers participated in these sections. Such well-known regional magazines as New York, Philadelphia, Baltimore, Seattle, Tucson Lifestyle and Aloha ran the sections.

Included were radio spots and newspaper articles announcing free jewelry cleaning by JA jewelers.

Coordinated by Eileen Farrell, JA’s director of marketing and communications, Real Jewelry Month shows all indications of growing even more significant for two reasons. First, JA’s Call to Action Council, a network of jewelry association executives, has started a task force to study how they can work with even more synergy on all public relations efforts. Second, JA will begin a task force on Real Jewelry Month to see how it can enhance efforts to reach consumers with the fine jewelry message.

INVESTOR GROUP PLANS TO CLOSE ALL BEST STORES

Best Products Inc., which created the catalog showroom industry in the 1950s, is going out of business.

The Richmond, Va., company announced in October an investor group would pay$410 million for its assets and close its 88 catalog stores and 11 jewelry stores.

The investor group comprises Jubilee Limited Partnership III (affiliated with the Schottenstein family of Columbus, Ohio, which owns Value City department stores and has worked with or liquidated distressed retailers), Bernstein Financial Group, Nassi Group and Alco Capital Group Inc. Jubilee first planned to operate the stores but later decided to close them.

The deal is subject to the approval of U.S. Bankruptcy Court.

Best filed for bankruptcy protection in September, its second filing in five years, after a $95.7 million loss for the fiscal year. Under the new plan, the investor group would conduct liquidation sales through February then close the stores. About 10,000 employees in 17 states would lose their jobs.

CORRECTION

A photo caption in the “What’s New/Gifts” section of JCK, October 1996, p. 154, listed the incorrect area code of Reed &Barton Silversmiths. The company’s address and correct telephone number:144 W. Britannia St.,Taunton, MA 02780; (508) 824-6611.

In the “What’s New/Jewelry” section of the same issue (p. 126), JCK inadvertently published an old picture of bracelets that are no longer available from Contempo Elegá#-31#nce, Fort Lauderdale,Fla.

AGTA HIRES NEW EXECUTIVE DIRECTOR

Ron Ainsworth is the new executive director of the American Gem Trade Association.

Ainsworth started with AGTA as membership services manager in 1995 and served as administrator after Peggy Willett stepped down as executive director this year to become associate publisher of JCK.

Though the new director started his career at age 16 as a sales associate in a jewelry store in Jackson, Miss., he has not always been in the industry. He brings years of diverse experience in customer service, public relations, marketing, management, administration and team motivation as the owner of small and successful businesses. His service-based background and talents in coordinating team efforts were particularly attractive to AGTA.

“Ron’s understanding of AGTA, its member needs, his managerial skills and working relationship with the AGTA staff made him our primary candidate,” says Simon Watt, search committee chair.

CANADIAN DIAMOND MINE WINS FINAL APPROVAL

The BHP/Dia Met diamond mine in Canada’s Northwest Territories won final approval from the Canadian government in November.

The mine will cost $821 million to develop. The first diamonds should reach the market in the second half of 1998, but the company won’t announce who will market them until production begins.

Annual production is expected to be 3 million carats at the outset and 5 million within five years.

GIA BACKLOG: LITTLE RELIEF IN SIGHT

The diamond grading backlog at the Gemological Institute of America grading labs has been reduced somewhat, but turnaround time remained three to four weeks at press time in early November. GIAPresident Bill Boyajian stresses that it remains “unacceptably high.”

Diamond dealers and retailers alike complain that the grading backlog has cost huge amounts of money in lost sales and tied-up inventory.

Boyajian says the problems began in mid-August when GIA put its new Horizons computer lab system on line. Much of the hardware did not meet specifications and had to be replaced while the systems engineers were trying to overcome bugs in the software.

At the same time, the labs were hit with a “four times normal” rush of diamonds submitted for grading while personnel and equipment were being moved toGIA’s new campus in Carlsbad, says Boyajian.

“It was an unbelievable confluence of events,” he says. “However, we make no excuses. We’ve let ourselves and the trade down.”

NO COMMENT

Some innovative designers hope consumers will be thinking diamonds when they shop for Christmas gifts this month or for a wedding gown this coming spring. For the woman who has everything, Victoria’s Secret offers a diamond-studded bra as part of its “Christmas Dreams & Fantasies” marketing campaign. The handmade Miracle Bra®#-82# is decorated with more than 100 carats of real diamonds and semiprecious stones and packaged in a red velvet presentation box. It can be the delight of any gift-giving occasion for a mere $1 million. Claudia Schiffer is not included. At press time, Victoria’s Secret had not received any orders for the bra. Meanwhile, Asia’s most precious wedding gown was displayed by the De Beers Diamond Information Center at the recent Hong Kong Jewelry & Watch Fair. Designed by local fashion talent Barney Cheng, the diamond-studded gown can be paired with matching diamond shoes. Together they incorporate 100 carats of diamonds and are valued at more than $260,000.