Color Primer

Gem week may come and go in February, but consumers will be clamoring for gemstones all year round.

Thanks to recently engaged princess-to-be Kate Middleton and actress Jessica Simpson—now donning sapphire and ruby engagement rings, respectively—2010 was a banner year for color. And with Middleton’s royal wedding to Britain’s Prince William scheduled to take place in April, more consumer requests for colored stones are inevitable.

Happily for retailers, the Tucson, Ariz., gem shows offer a one-stop shopping experience for virtually every color need imaginable, including sapphires and rubies well suited to bridal rings. Headlining the 40-some shows running concurrently throughout the city in early February is the American Gem Trade Association (AGTA) GemFair show at the Tucson Convention Center Feb. 1–6.

For Tucson-bound retailers, there’s no better place to source these stones or similarly hued options—including affordable blue sodalite and red garnet.

Celebrity engagements are not, however, the only factors impacting sales of colored stones. Fashion trends play a critical role in the colors—and gems—that will top consumers’ wish lists this spring. If you have to remember just one detail about the fashion palette this season, as Kay Thompson famously sang in Funny Face: Think pink! Then look to the gem world, which is brimming with accessory options.

“When J. Lo got the pink diamond”—a Harry Win­ston ring from former fiancé Ben Affleck—“many people couldn’t afford one, but they could buy pink ­sapphires or spinel,” says Stuart Robertson, JCK ­columnist and research director of ­Gemworld International, publisher of The GemGuide, in Glenview, Ill. Likewise, rubellite and garnet sales will trend up as a result of Simpson’s ruby. “What people want is the look—not necessarily the specific variety of gem materials.”

Betsy Suhey, owner of Aurum Jewelers & Goldsmiths in State College, Pa., plans to be in Tucson for a month this year, from mid-January to mid-February. During this time, she’ll take in many of the loose gem shows as well as Centurion, the high-end finished-goods show run by H2 Events. In years past, Suhey has bought diamond bead strands and peridot; this year she’ll bring a list, as well as an open mind. “I like to see what’s new, and what’s going on in the world,” she says.

In terms of pricing, Suhey and others should expect to pay more for many gem materials. Price points for high-end sapphires, for example, have changed considerably. “We are looking at 20 percent to 35 percent—big increases,” says Robertson, citing the ­market’s nascent recovery as a major reason high-end production is bouncing back more quickly.

The lower end—price points of a few hundred dollars—is strong, as is the $6,000-plus category, but the $1,500 to $4,000 range (middle-class buyers) remains weak. “They are more concerned about trying to save money,” explains Robertson.

When it comes to rubies, Burmese stones are still the benchmark for look, quality, and price—in spite of the ban on Burmese rubies, which is very much in effect. In fall 2009, the Government Accountability Office issued a report to assess the effectiveness of the Tom Lantos Block Burmese JADE Act of 2008. As a result, the GAO recommended that the Department of Homeland Security and relevant agencies “take additional steps to issue guidance regarding imports of non-Burmese-origin goods.”

There’s been no news since—yet stones from Burma continue to surface. “One would be naive to think that some new Burmese material isn’t coming into the United States,” says Robertson.

The high-grade rubies at the show are likely stones that have already been here and are being reintroduced into the market as a result of public buying; prices for these stones could run as high as 50 percent more than jewelers are accustomed to paying.

Other similarly hued stones may help fill ruby’s void. “Spinel is an alternative when quality ruby is not available,” observes Russell Shor, senior industry analyst for the Gemological Institute of America (GIA). Plus, some of the fracture-filled rubies look good, but disclosure can be an issue, thereby discouraging purchases. “A lot of jewelers do not want to deal with them,” adds Shor.

Meanwhile, the price of tourmalines is moving up because of availability (or lack thereof), and some tanzanite prices—namely, for stones weighing between 2 cts. and 4 cts.—are down 20 percent to $500 per carat wholesale. The reason? “There’s been no success in developing a single-tier price system,” explains Robertson.

Rising prices notwithstanding, most foresee a robust GemFair this year. The industry mood is more upbeat than one year ago, trade sales have been improving since the summer, retail inventories are depleted, and demand is greater for custom work, which bodes well for gemstone dealers. Some expect increased demand for nontreated gems and more requests for certified ones. “Consumers want to shop with confidence,” says Mitch Jakubovic, director of EGL USA in New York.

“Last year the market was scared, and buyers were going for need only,” says Salim Mansuri, president of Taj Co. in New York, a seller of loose gemstones with booths at the AGTA show, the Gem & Jewelry Exchange show, the Gem & Lapidary Wholesalers show, and the Howard Johnson Gem and Mineral Show. This year should be different, and Mansuri is packing for the occasion. “We have seen the market improving since the JCK show,” he says. “We are taking all of our merchandise with us to Tucson.”

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