10 Things Rocking the Industry in March

1. Tucson

The down-to-earth setting of the Sonoran desert provided the backdrop last month to a market development with intriguing implications for the colored stone trade. Adam Gil, a principal with Jerry Gil & Co. in New York City, found people going for “either the most expensive or the least expensive items.” He saw particularly strong demand for Paraiba tourmaline and fire opals. Around the city’s 30-odd gem shows, lapis lazuli, turquoise, and all manner of green gems struck a chord with buyers. But some exhibitors, such as Kapil Seth of New York City’s Malhotra, noticed a worrisome decrease in big spenders from China—attributable, perhaps, to the close timing of the Hong Kong International Jewellery Show in late February. “Deals are being closed if you have really fine stones,” he said. “Buyers are very choosy.”

2. Luxury

Tank Anglaise watch in 18k white gold; $33,200; Cartier, New York City; 800-CARTIER; cartier.com

Let’s hear it for the 1 percent. The ranks of the super-rich are doing wonders for the luxury business, if recent sales reports are any indication. Richemont announced sales grew 25 percent for the three months ended Dec. 31. The Asia-Pacific region reported the highest growth, up 36 percent, reflecting strong demand in Hong Kong and mainland China. But sales in the Americas also increased, to the tune of 23 percent. At LVMH Moët Hennessy–Louis Vuitton, revenues soared 16 percent to reach €23.7 billion in 2011, including a ­staggering 98 percent increase for the company’s watch and jewelry segment (undoubtedly owing to the acquisition of Bulgari). “Profit from recurring operations passed the threshold of €5 billion for the first time,” said Bernard Arnault, chairman and CEO of LVMH, in a statement.

It may not be the world’s largest, but this is definitely a real emerald.

3. Gemstones

When news broke that a Canadian auction house was selling the “world’s largest emerald,” the 57,000 ct. dark green doorstop generated a massive media frenzy. But excitement abated when it was discovered that the watermelon-size stone was dyed. (Was it even an emerald at all?) In the end, the stone failed to meet the minimum $500,000 bid at its Jan. 28 auction. The owner’s arrest on unrelated fraud charges just before the sale probably didn’t help.

4. Promotions

Would-be grooms looking for the perfect Valentine’s Day proposal got a little help from Pizza Hut and its “Tie the Knot with the $10 Dinner Box” promo. For an extra $10,000, the company added a Zales ruby and diamond engagement ring to its usual pizza, breadstick, and cinnamon stick combo. The package also included a limo, a photographer, a videographer, flowers, and fireworks. The while-supplies-last caveat came in handy: Within three days of going live, Pizza Hut received 500 orders for only 10 promotions.

The Zales-designed ruby ring, perfect for pepperoni lovers. Doesn’t it coordinate beautifully with the $10 Dinner Box (right)?

 5. Majors

Former Apple retail chain head Ron Johnson is wasting no time in trying to transform J.C. Penney, the venerable department store he took over in November. In January, he completely revamped the 11,000-store company’s pricing policy, slashing the number of sales the chain runs from 590 to 12, and valuing most of its merchandise with “everyday, regular prices.” As a JCP “pricing manifesto” proclaims: “We won’t make anyone jump through hoops to get a good price.… We won’t fill mailboxes with junk.” But so far, consumer reaction has been decidedly mixed. Moaned one online commenter: “People like coupons, sales, etc. Why would they take that away?!”

6. Embargoes

In 2008, with considerable fanfare, the U.S. government banned the import of Burmese rubies and jade, in a sign of dissatisfaction with the human rights record of the military junta running Myanmar (also known as Burma). But in January, the government released some high-profile political prisoners, leading the United States to reestablish diplomatic relations. Could an end to the ban be far behind? At press time, there were no firm efforts behind repeal, but American Gem Trade Association CEO Doug Hucker thinks things could change after the country’s April elections. He warns, however, this issue is hardly a priority. “There are much bigger issues on people’s plates,” he says. “We need everyone to get involved.”

A Burmese ruby

 7. Leaders

Matthew A. Runci

After 17 years at the helm of the most prominent U.S. jewelry organization, Jewelers of America CEO Matthew A. Runci announced he’ll step down at the end of 2012. Runci, a former academic, first became involved in the industry at MJSA, and took over JA in 1996. In recent years, in addition to his day job, he helped found the Responsible Jewellery Council and became a key player in the Kimberley Process and other industry social responsibility efforts. “I firmly believe everyone is replaceable,” he says. “I just want to move on with my life and spend a little time goofing off.”

8. Super Bowl

We already know that Super Bowl XLVI ranks as the most-watched program in TV history (111.3 million viewers) and the most-tweeted-about sports event ever (12,233 per second). We suspect it may also have been the blingiest. During Madonna’s halftime megamix, LMFAO’s sexy-and-he-knows-it rapper SkyBlu sported $1 million Beats by Dre headphones bedazzled with 1,652 stones by Graff: 114.25 cts. t.w. diamonds and 3.35 cts. t.w. rubies. Not to be outdone, the Queen of Pop expressed herself in Bulgari earrings featuring nearly 20 cts. of brilliant-cut diamonds. Hey, they don’t call her the Material Girl for nothing.

9. Diamonds

An Arkansas couple certainly had a profitable day sightseeing last March when they unearthed a 2.44 ct. piece of clear white rough at the Crater of Diamonds State Park in Murfreesboro, Ark. The stone, christened the “Silver Moon,” has since been sawed down to a 1.067 ct. F VVS2 pear shape, and valued at more than $20,000 retail. “It was beautiful in the rough, and even more beautiful after it was cut,” raves Arkansas jeweler Bill Underwood. Meanwhile, the park—the only public space that lets visitors hunt for diamonds—will celebrate its 40th anniversary in March and its 30,000th diamond find sometime soon.

Courtesy of the Arkansas Department of Parks & Tourism
The finished 1.067 ct. $20,000+ stone The 2.44 ct. rough Silver Moon diamond

10. Stats

Industry numbers showed some improvement in 2011, but that wasn’t enough to stop the industry from shrinking, says Jewelers Board of Trade president Dione Kenyon of the group’s year-end statistics. At the end of 2011, the industry credit monitor listed 28,706 jewelry-related companies in the United States—a slight decrease from last year’s number of 29,092. On the positive side, bankruptcies decreased markedly, and JBT upgrades outpaced the number of downgrades for the second year in a row. “Things didn’t get much worse last year,” Kenyon says. But they also “didn’t get much better for people who were trying to hang on.”