10 Things Rocking the Industry

1. Gemstones

What better way to celebrate autumn than with a room full of extraordinary colored-stone jewelry and exceptional gemstones? On Oct. 25, the American Gem Trade Association announced the winners of its 28th annual Spectrum Awards. The AGTA received 454 entries for its 10 categories, which included Best Use of Color (Deidre Featherstone of Featherstone Design), Bridal Wear (Maria Canale of Richard Krementz Gemstones), and Business/Day Wear (Belle Brooke Barer of Belle Brooke Designs). For the second year in a row, Best of Show went to raw diamond pioneer Todd Reed for a palladium and gold moonstone-, diamond-, and sapphire-covered locket. “Peaceful Place is a piece that holds much of my personal thoughts and feelings,” says the Boulder, Colo.–based designer. Not to mention, it’s “a sexy, beautiful, and dramatic locket.” (Inside the locket: a 76.03 ct. moldavite Buddha.) All the winners will be honored—and their pieces displayed—during this year’s AGTA GemFair in Tucson, Ariz., at a Feb. 4 gala.

2. Watches

Datograph flyback chronograph in 41 mm platinum case; price on request; A. Lange & Söhne, New York City; 800-408-8147; alange-soehne.com

When 19 of the world’s best watchmakers gather in Geneva Jan. 16–20 for the Salon International de la Haute Horlogerie, the prospect of another recession is not likely to be discussed. Swiss watch exports are on track to surpass the 17 billion Swiss francs they achieved in 2008—the best year in the trade’s history. Driven by luxury demand in Asia, sales of high-end watches are so robust as to suggest that the disparity between rich and poor is as wide as ever—and growing wider. Says Hugues de Pins, president of Vacheron Constantin North America: “Touch wood, but I think we are not truly affected by economic trends.”

3. De Beers

For more than eight decades, the diamond business and De Beers were synonymous with one family: the Oppenheimers. On Nov. 4, however, company chairman Nicholas (“Nicky”) F. Oppenheimer announced his family was selling its 40 percent stake in De Beers to Anglo American. The $5 billion transaction will take nine to 12 months to close, after which Nicky and son Jonathan will likely step down. (Recently appointed De Beers CEO Philippe Mellier is expected to keep his post.) No reason was given for the dramatic move, but reports say Nicky grumbled that “proper corporate governance” now looked down upon dynastic succession. As one analyst told the Financial Times: “Are Bill Gates’ kids going to run Microsoft?”

4. Chains

They were two of the best-loved names in retail, but in the end, they were, sadly, unable to sell themselves. On Nov. 2, Syms Corp., a Northeast and ­Midwest powerhouse known for its slogan “An educated consumer is our best ­customer,” as well as subsidiary Filene’s Basement—a legendary discounter that Syms ­purchased in 2009—announced they filed for Chapter 11 and plan to liquidate. Both stores dabbled in jewelry: Several Syms outlets carried a ­selection of fine items, while Ultra Diamonds ran the jewelry departments in a dozen Filene’s stores. But the two noted names became victims of what court papers called “increased competition” in the discount sector. The stores’ liquidation is expected to run through January.

5. E-Commerce

Blue Nile shareholders had the blues on Nov. 8, when CEO Diane Irvine resigned and the Seattle-based e-tailer’s stock fell nearly 33 percent. No reason was given for her exit, but profits slid 30 percent for the third quarter, partly due to rising diamond prices, which led the company to slash margins. And while sales for the quarter jumped 11 percent, many analysts called that subpar by ­dot-com standards. Former CFO Vijay Talwar is filling Irvine’s role on an interim basis. Meanwhile, chairman Mark Vadon says it plans to branch out beyond its core bridal business, but observers remain skeptical: Blue Nile, one commenter wrote on the Motley Fool, “seems like a long, tearful river.”

6. Labs

Talk about congestion. The Gemological Institute of America recently acknowledged it was coping with its worst grading backlog in at least five years—with turnaround times running as long as six weeks. Tom Moses, the GIA’s senior vice president of lab and research, tells JCK the problems began in April, when the diamond market was seeing huge price increases and the lab saw a 40 percent jump in intake. “We have added significant staff, and we have been working six, seven days a week, 10, 12 hours a day,” he says. “We are doing everything we can to get control of this.” While he hopes to shave a week off turnaround times around January, he says it still won’t be “where we want it to be or where clients expect it to be.” New York dealers, meanwhile, are frustrated but sympathetic. Says Hertz Hasenfeld, the co-chair of the Diamond Manufacturers and Importers Association of America: “The last thing you want to see them do is cut corners to shorten delivery time.”

7. Auctions

Courtesy of Sotheby’s
The Sun Drop diamond tips the scale at 110 cts.

It’s an egg-size marvel that, according to Sotheby’s David Bennett, regularly draws cries of “Oh my God!” And on Nov. 15, the Sun Drop—a 110.03 ct. fancy vivid yellow diamond—made people gasp yet again when it sold for $12.4 million at Sotheby’s Geneva. Why did it earn so much? There is, of course, its size: The gem currently ranks as the world’s largest known pear-shape vivid yellow diamond. But the Sun Drop’s record-breaking price may also have something to do with yellow’s reigning popularity: Just one month earlier, the Vivid Yellow, a pear-shape fancy vivid 32.77 ct. yellow diamond, sold for $6.5 million at Christie’s.

8. Diamonds

Ryan McVay/Getty Images

The Kimberley Process finally made up its mind about what to do with diamonds from the Marange region of Zimbabwe—but the debate over whether it made the right call is far from finished. On Nov. 1, the certification scheme announced it was ­allowing exports from the two “compliant” mines in the region, ending a two-year ban that had divided the organization and almost brought it to the edge of extinction. Most trade leaders said they were happy to move on, but human rights groups immediately denounced the accord, complaining that the KP has lost its leverage over the country. More troubling for ­jewelers: Because of U.S. sanctions against entities connected to Robert Mugabe’s government, certain diamonds from Marange are now illegal to buy and sell in America. Brad Brooks-Rubin, the State Department’s special adviser on conflict diamonds, tells JCK, “We will continue to enforce sanctions and trade restrictions against Zimbabwe.… [Retailers need to] exercise due diligence to know whether their diamonds come from Marange.”

9. Innovation


A future in which diamonds are sold by vending machine was once the stuff of sci-fi industry fantasy. Now it’s reality—and, ironically, it’s a well-known jeweler that’s making it happen. On Oct. 22 in ­Mumbai, the Gitanjali Group, which owns the Samuels chain in the United States, debuted what it calls “the first ATM for jewelry,” a machine that lets shoppers buy gold and diamonds much like they buy candy. The machine, which the company hopes to roll out throughout India, features 36 options, with prices up to 30,000 Indian rupees (about $600). Items can be purchased with a credit card, debit card, or cash.

10. Stats

Source: Jewelers of America’s 2011 Cost of Doing Business survey

Jewelry sales climbed an impressive 6.9 percent in 2010—the first time they have risen since 2006, according to Jewelers of America’s annual Cost of Doing Business survey. Still, the survey found that many jewelers are still struggling to be profitable; only 28.7 percent said they are currently making money. “JA is positively delighted to see a uniform strong increase in sales,” chief operating officer Robert Headley tells JCK. “Our retailers are breathing a sigh of relief, but it is simply a fact of life that some firms are still not profitable.”

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