10 Things Rocking the Industry



1. Celebrities

Elizabeth Taylor had her share of romances—some longer-lived than others—but one love remained constant: jewelry. When the Oscar-winning actress died of congestive heart failure March 23, the industry lost one of its most passionate supporters. Taylor was, of course, known for her love of big rocks—particularly the 68 ct. Taylor-Burton D-flawless pear-shape diamond that memorably starred in a 1970 Here’s Lucy episode. But she also headed her own jewelry line and chronicled her infatuation with all things sparkly in a 2002 book, My Love Affair With Jewelry. “Jewelry is something that strikes a chord in you, or it doesn’t,” she told JCK in a 2007 interview. “But that chord can set you all a-quiver.”

2. Basel

The recent Baselworld show was generally a very upbeat affair. (See Show Biz, page 215.) But on March 30, the good feelings were dampened by one of the biggest thefts in its 94-year history. According to reports ­quoting the Swiss prosecutor’s office, on the fair’s second-to-last day, three men stole an estimated $10 million in gems from a distracted exhibitor. The brazen theft temporarily closed one of the show’s halls, and made attendees a lot more wary of doing business the European way. “Basel is not like America—the displays are very open,” one exhibitor told JCK. “I think they are going to tighten things up.” At press time, the thieves were still at large, though authorities reportedly turned the case over to Interpol.


Baselworld
Inside Baselworld

3. Websites

Daily-deal service Groupon has spawned a parade of imitators backed by such big names as Amazon, Google, and AOL. Now Facebook is getting into the social commerce act. On March 16, the Palo Alto, Calif.–based Internet giant confirmed it would let local businesses offer group discounts through its Deals program, beginning in five cities: Atlanta, San Francisco, San Diego, Dallas, and Austin, Texas. “Local is the last frontier that the Internet has not conquered,” one analyst told Bloomberg news service. “Everyone is going after it with a vengeance.”

 

4. Labs

Officials at the Gemological Institute of America’s grading lab have sounded alarms over an increase in the amount of large HPHT-processed stones submitted without disclosure. Now they are taking action. Lab senior vice president Tom Moses told JCK on March 22 that the Institute had cut off a number of clients who had repeatedly sent in processed gemstones without disclosure. Clients are required, said Moses, “to disclose their knowledge—or even suspicion—that their gem material has undergone” treatment. Even so, the Institute stressed it will only axe clients it fears are trying to fool the GIA: “The overwhelming majority of GIA clients ­operate with integrity and good faith.”


Gia

A 20.36 ct. HPHT-treated D-color diamond sent to GIA’s New York lab, where high-tech equipment (below) aids detection


Gia

5. Legacy

Pearl dealers are mourning the loss of ­industry legend Salvador J. Assael, who died April 1 at age 89 after a brief illness. A World War II ­veteran, he fought in the famed Battle of the Bulge, and entered his family jewelry business after the war. Assael is credited with helping to bring Tahitian pearls to the market in the 1970s. His enthusiastic promotion eventually made them so popular that in 1998, the Italian-born dealer was honored by the Order of Tahiti Nui, which recognizes distinguished service to French Polynesia. That year, he told the PBS program NOVA: “I love pearls beyond anything. I love my family most of all, I love my office staff most of all, but, after that, I love pearls.… There’s a warmth to [the pearl] that no other gemstone has.”


Assael baroque pearl and diamond brooch

6. Luxury

Cartier belongs to Richemont, as does Van Cleef & Arpels. Bulgari just joined LVMH. Could Tiffany be the next name swallowed by a luxury conglomerate? Some market watchers think so. “Analysts and bankers say the U.S. jeweler, which has a market capitalization of $8 billion, is likely to be snapped up,” according to a March 16 Reuters article. One financial adviser told the newswire that French conglomerate PPR, which owns Gucci and Parisian jeweler Boucheron, “looked seriously” at buying Tiffany in the past, but couldn’t finance it. In the wake of the Bulgari deal, “they may start looking at it again.”


iStockphoto

7. Diamonds

Diamond prices rose an average of 6 percent in March, according to ­Rapaport Research, leading some to wonder whether the rapid upward spiral has more to do with speculation than with market fundamentals. Now that view has been endorsed by one of the most powerful men in the industry: Fyodor Andreev, CEO of Alrosa, the world’s largest diamond producer. In a March 18 interview on Bloomberg.com, Andreev noted his company’s rough prices are now 8 percent higher than they were in 2008 before the financial crisis, even though the retail market hasn’t fully recovered. For rough and polished to be so out of whack is “dangerous,” Andreev said—implicitly warning that regardless of how fast something rises, it can fall just as quickly.

 

8. Law

Jewelers had long been wary about the provision in the Affordable Care Act that would require them to file 1099 forms for most of their vendors; one Maryland retailer, Seth Shipley, even testified in Congress against it. On April 5, the Senate voted to eliminate the provision, following in the House’s footsteps. At press time, the measure seemed certain to be repealed; all that remained was for President Obama to sign the bill.

 

9. Crime

Here’s a (good) news flash about the jewelry industry: It’s getting safer. According to the Jewelers’ Security Alliance, the total number of crimes against the jewelry industry decreased 4.5 percent in 2010, and total losses declined 17.3 percent. JSA executive director John Kennedy attributes the drop to increased efforts by the FBI and local law enforcement agencies, but stresses that the fight against jewelry crime is far from over: “Much progress has been made in the last decade. But the risk of crime and violence is something that jewelers still face every day.”

 

10. Stats

The numbers “are still showing improvement,” says Jewelers Board of Trade president Dion Kenyon. “From a macro sense, things are definitely getting better.” Still, she feels “things quieted down for the industry” a bit in March. “Consumers seem to be a little more cautious,” she says. “But the top end is still seeing a strong performance. We are not going backwards, but I feel like the momentum has slowed a bit.”