On Tuesday, July 27, jewelry industry leaders met with leaders of the Gemological Institute of America at the Plaza Hotel in New York. During the meeting, GIA president William Boyajian reviewed its accomplishments of 2004 to date and shared the organization’s goals for 2005.
Highlights of his remarks focused on stretching to achieve GIA’s potential; investing in GIA’s core functions; and maintaining the present five-year plan. In his detailed review of GIA’s activities during the year, Boyajian told the group of approximately 70 that the demand for grading reports from the GIA lab had hit record levels. But despite the increased demand for the reports, he noted, the turnaround time for the reports had decreased.
In addition to the update on lab activities, Boyajian told the group that strong demand for GIA’s educational products continued for both home-study products and the new business school. He added that the Institute’s fund-raising efforts were doing well, as were the research and instrument divisions of GIA.
Plans for 2005 include expansion of educational facilities; additional lab space in the Carlsbad, Los Angeles, and Hong Kong operations; establishing a facility in India; and the acquisition of 10 acres of land adjacent to the Carlsbad facility.
Boyajian concluded his remarks by telling the group that the GIA Library and Museum was the foremost repository of gemological information in the United States.
Boyajian then introduced Tom Moses and Tom Yonelunas, who presented the Institute’s update on its cut grade project, which will be detailed in the October issue of Gems &Gemology. The effort will focus on round diamonds only and will cover colors from D to Z and all clarities. Grading reports will include cut information in addition to the presently reported data, and a narrative will be provided on each diamond. The Institute is aiming to implement its cut grade project during the first half of 2005.
Following the presentations by Yonelunas and Moses, members of the diamond industry met in a panel format to discuss the impact of the new cut grade development. The panel included diamond dealer Sheldon Kwiat and manufacturer Eli Haas, both of New York, and Louisiana-based retailer Lee Berg, along with Moses and Yonelunas. Kwiat offered the opinion that the cut grade will cause a paradigm shift in the business at every level—consumers, diamond cutters, and sales personnel at retail—and that communication will be key.
Haas posited three points: First, what is considered “premium” today may not be premium after the implementation of the cut grade. Second, prices will be affected by at least 10% to 15% by the cut grade. And third, specialty cuts will not have a cut grade.
Berg provided a thoughtful perspective on the implementation plan, arguing that more time is needed to effect the change at retail. There are practical questions concerning the addition of cut grades to existing inventory tags, training personnel, providing proper lighting and viewing environment in store, providing full disclosure of information, and communicating it effectively to sales staff and consumers. Berg also questioned how old inventory should be handled.
Another member of the audience, Ed Bridge of Ben Bridge Jewelers, applauded the work of GIA but raised similar concerns about dislocations and implementation of the cut grade. Bridge raised the practical question of the low inventory turn of diamond products at an industry average of 1x plus the inventory at the manufacturing/supplier level, which might require an implementation time frame of one to two years.