Up Front

JCK Announces Two Promotions

Shawn Mery has been appointed publisher and Frank Dallahan associate publisher of the JCK International Publishing Group, announced Rick Bay, group vice president of JCK and Cahners Business Information, which publishes the magazine.

“The outstanding job done by Shawn Mery as associate publisher and Frank Dallahan as executive director of trade relations merits their well-deserved promotions and their stronger involvement in the overall operation and management of the JCK Group,” says Bay.

Mery, a native of Rutherford, N.J., started his career in 1981 as the owner of a Florida advertising and marketing firm with regional offices in New York and New Jersey. After selling the business in 1987 he stayed on in a management role for two years. From 1989 until 1991 he held various sales management positions for retail-related magazines in New York. In 1991 he became sales manager of another New York publishing company and later was promoted to group publisher. He joined JCK in October 1997 as associate publisher. Mery lives with his wife and son in Valley Forge, Pa.

Dallahan, a graduate of the Wharton School of the University of Pennsylvania, has held executive positions with ArtCarved Bridal, the Diamonique division of QVC, William Schneider Jewelry, and Kurt Gutman Jewelry. His marketing experience includes work for Lenox China and Crystal and Krementz & Co. He has also been a member of the JCK Show Advisory Board since its inception in 1992.

Dallahan, who joined JCK in December 1997, writes a column for the magazine called “Counterpoint” and will continue his role as director of trade relations. He and his wife live in Bucks County, Pa. They have three children.

The JCK International Publishing Group, based in Radnor, Pa., publishes JCK, High-Volume Jeweler, New York Diamonds, Luxury International, the JCK Show Guides, and the annual JCK Jewelers’ Directory.

Diamonds:

Lazare Kaplan Takes Steps to Ease Fears About ‘Whitening’

Lazare Kaplan International recently announced steps to assuage industry fears about its diamond “whitening” process. The company will laser-inscribe all “whitened” stones with the acronym “GE POL” to ensure future disclosure. (“GE” stands for General Electric Co., the developer of the procedure; “POL” stands for LKI’s new subsidiary, Pegasus Overseas Ltd., which will market the diamonds.)

When the stones are submitted to the Gemological Institute of America’s Gem Trade Lab, the lab will note under its “comments” that “this diamond has been processed to improve its appearance by General Electric Company.” LKI officials’ decision to mark the stones came out of an April 16 meeting in New York with representatives from GIA and GE.

GIA will also get a chance to view the diamonds before and after the process and to research possible identifying characteristics. While in the past LKI insisted that GIA sign a confidentiality agreement before examining the stones, GIA sources said they signed no such agreement and will publish their findings in a future issue of Gems & Gemology.

“We will be able tell the industry what it needs to know,” says GIA president William Boyajian. “I feel we’ve done our best to avoid a potential crisis.” He notes that finding a detection method may not be easy, as both LKI and GE officials say the process is “undetectable.”

“GIA views that almost as a challenge,” says Boyajian. “A lot of work needs to be done.” Says Sheldon Ginsberg, LKI’s executive vice president, “We’ve answered every objection the industry could have.”

Eli Haas, president of the Diamond Dealers Club of New York, commends Boyajian and GIA for their role in the issue. “It was their insistence that all parties ‘do the right thing,’ coupled with GIA’s reputation, that created the framework for the agreement,” he says.

The “whitened” stones will be sold beginning this month in Antwerp by POL. According to company officials, the stones will range from D to L color, from .50 ct. to 10 cts., and from flawless to I1 clarity. They’ll be predominantly fancy-shaped. The company hopes to sell $30 million worth of stones in the first year, $50 million in the second year, and eventually $100 million a year.

LKI officials confirm accounts in the Rapaport Diamond Report that the company has been buying up brown stones on the Antwerp market. But they say they’ve been buying other stones as well and note that only 1% of the world’s diamonds are eligible for the process. Most observers believe this is a reference to boron- and nitrogen-free Type II-a diamonds.

For now, LKI still refuses to disclose the nature of the process. Most gemologists think it’s some sort of high-temperature, high-pressure treatment (see “Gemology’s Outer Limits,” p. 126).—Rob Bates

Litigation:

Ward Emerald Case Finally Closed

Following a bizarre turn of events, Fred Ward, the Maryland gem dealer who fought a four-year legal battle over a damaged 3.65-ct. emerald, has been forced to settle. His only other option was bankruptcy.

In 1994, Dorree Waldbaum Lynn admitted smacking the emerald ring she’d bought from Ward against the kitchen sink and cracking the emerald. She filed a claim with State Farm Insurance Co., which later denied it. In the meantime, she gave the ring to a still-undisclosed second jeweler, who apparently further damaged the emerald by placing sizing beads inside the shank.

Miffed at State Farm’s denial of her claim and holding an obviously cracked emerald, in June 1995 Lynn sued Ward for misrepresenting the stone, alleging that it had been enhanced. Also sued were Ward’s business partner, an independent appraiser, and State Farm.

Ward responded that he disclosed to his client that the emerald had been oiled and went to court to contest the charge. In non-binding arbitration in April 1996, Lynn lost her claim against Ward but won against State Farm, which was to pay Lynn and her husband $58,650.

Still denying the claim, State Farm escalated the case to a jury trial. Ward eventually was held responsible for the stone’s condition and ordered to buy back the damaged emerald and now-destroyed mounting for $38,600. He also had to pay Lynn’s lawyers’ fees of $186,000.

Insisting that State Farm should pay the damage claim, Ward consulted fracture experts and obtained convincing evidence that the emerald had been damaged by a sharp blow, as Lynn herself admitted from the outset. The courts would not consider the new evidence.

Ward had to “quit” the case following legal maneuvers by Lynn’s lawyers. They maintained that Ward had committed “an error in not responding to a related legal proceeding,” he says. “A default was entered that, if allowed to stand, would have devastating financial consequences for my wife and me.” Under the terms of the settlement, he can’t comment on the amount.—Gary Roskin

Internet:

Cyber-Auctioneer eBay Acquires Butterfield & Butterfield

In a move likely to transform the growing online jewelry auction arena, eBay has surprised industry observers with a $260 million purchase of San Francisco auction house Butterfield & Butterfield.

A giant Internet auctioneer with 3.8 million registered users, eBay (www.ebay.com) hopes to benefit from Butterfield & Butterfield’s experts who can authenticate, appraise, and market jewelry as well as other high-priced goods such as art, fine collectibles, paintings, and furniture. A spokesperson for Butterfield & Butterfield says the firm expects to retain its name and identity within the eBay site, but that the extent to which Butterfield would authenticate the jewelry eBay sells hadn’t yet been determined.

The hope is that Butterfield will help eBay attract more affluent customers. According to Rich Goldstein, president of iJeweler in Austin, Texas, an Internet consulting firm serving independent jewelers, the bulk of jewelry sold on eBay costs $75 to $200. By contrast, Butterfield & Butterfield’s goods typically sell at conventional auctions at two price tiers: $600-$900 and $1,000-$7,000, according to Gail Brett Levine, publisher of Auction Market Resource for Gems and Jewelry, a Rego Park, N.Y., periodical that tracks jewelry auction results.

Other auction houses are soon to come online. This summer, Sotheby’s plans to launch sothebys.com to auction jewelry, art, antiques, and other collectibles. And this fall Christie’s is expected to launch christies.com, with online auctions that initially focus on books and manuscripts, photographs, prints, and other collectibles. A Christie’s source says jewelry will be sold through the site sometime in the future.

Levine says eBay’s purchase of Butterfield & Butterfield “sets the bar higher” for Sotheby’s, Christie’s, and other traditional auction houses that plan to hold jewelry auctions online. She notes that “eBay has a cutting-edge automated infrastructure that will force virtually every auction house with an Internet presence to make things easier for the consumer. Most online auction houses are wimpy. You wonder why they bother being on the Internet. They don’t even post prices realized online.” By contrast, eBay automatically and continually posts sale results from the prior three days. —Jessica Stein Diamond

For late-breaking news, go to www.jckgroup.com. You’ll find 40-50 new stories from around the world every day.

Diamonds:

De Beers Appoints New Millennium Sightholders

De Beers has appointed four new sightholders to sell its limited-edition millennium diamonds, bringing the number to 14. The new sightholders are New York’s Hasenfeld-Stein and Star Diamond Trading, and Antwerp’s Eurostar and Overseas Gems. The diamonds and the countertop readers needed to view their millennium inscriptions will be available to retailers only through the sightholders.

The firms were chosen based on the marketing plans they submitted to De Beers. Previously named millennium-diamond sightholders are W.B. David Inc., New York/Israel; Schachter & Namdar, Israel/New York; Codiam-Rand Diamond Cutting Works, South Africa/New York; Fabrikant, New York/Israel; Tache SA, Antwerp; S. Muller & Sons Diamonds, Antwerp; R. Steinmetz & Sons, Antwerp; Rosy Blue, Antwerp; Tasaki Shinju Ltd., Japan; and Chow Tai Fook, Hong Kong. All of De Beers’ clients will get a chance to market its “Millennium Time Capsule,” which includes two loose stones in special packaging meant to serve as an heirloom.

The 14 sightholders, expected to market nearly 25,000 mostly 1-ct. branded round brilliants, have appointed the Gemological Institute of America’s Gem Trade Laboratory to be the “official grading laboratory” for the De Beers Millennium Diamonds. Each diamond will be cut using proportions specified by De Beers. The diamonds will then be returned to De Beers, where they will be branded with a three-line inscription. Located on the table of each diamond, the first line will read “2000,” followed on the second line by “DE BEERS,” and on the third line by a serial number and the name of one of 10 stars. The first sight’s star-name is Antares, a giant red star, the brightest in the constellation Scorpio.

Once returned to their manufacturer, the diamonds are expected to be submitted to GIA for grading and any other girdle laser inscription requirements. The De Beers Millennium inscription will be noted in the “comments” section of each GTL report.—Rob Bates and Gary Roskin

New Indy 500 Crown

For the first time in 40 years, there was a new crown for the Festival Queen of the Indianapolis 500 race held last month. Designed and sculpted by goldsmith Ross Arterberry of G. Thrapp Jewelers in Indianapolis, the crown has a sterling silver frame set mainly with cubic zirconia but also with diamonds, emeralds, and pearls. The headband’s checkered-flag motif is achieved with interspersed black onyx and mother-of-pearl. Each was hand-cut by lapidary Phil Zinc at Jox Rox in Lawrence, Ind. The crown, along with 33 mabé pendant necklaces for the “500 Festival” princesses, were donated by G. Thrapp.

Robberies of Traveling Salespeople on the Rise in California

There’s been an alarming increase this year in robberies of traveling jewelry salespeople in California, according to the Los Angeles Police Department. By late April, there had been 50 robberies statewide, 22 in Los Angeles alone, says Detective Mike Woodings. Losses totaled more than $13 million. “This looks like it will be a banner year for [the robbers],” says Woodings. (Nationwide, though, jewelry crime is way down; see p. 92.)

Part of the problem is the concentration of jewelry wholesalers in Southern California. Compounding the risk is the tendency of some salespeople to take their jewelry samples home rather then store them in a secure facility.

For their part, the robbers, many of them members of South American gangs that prey on jewelry salespeople, have become more brazen. In years past, their method was to distract a salesperson or disable his or her car and then grab the goods. Now, says Woodings, the robbers simply follow an intended victim until he or she stops, surround the person with three or more armed men, and then “put a gun in the person’s face and demand the bag.”

Woodings’s advice to traveling salespeople echoes that of the Jewelers’ Security Alliance. First, find an alternative means of moving your wares or use a security service rather than carry it with you. Second, if you’re held up, don’t resist. “If you resist, they’ll kill you,” says Woodings.

Third, don’t take jewelry samples home at night. “That just puts you and your family at risk,” says Woodings, noting that some robberies have occurred at victims’ homes.

If you have information about any of these robberies, contact Woodings at the Los Angeles Police Department, at (213) 485-2524.—William George Shuster