UpFront

Dangerous Rubies Enter the U.S.

Look out for radioactive rubies. They appear normal, but you shouldn’t touch them. The little beauties are dangerous to your health.

The rubies reportedly come from the same nuclear reactor in Indonesia that produced the radioactive cat’s-eye chrysoberyls we wrote about in January. A number of rubies were examined by Mahardi Paramita, the director of the Gemological Institute of Indonesia in Jakarta, who notified the International Colored Stones Association in New York. An alert went out in May.

At that time, only five or six orangy-red rubies had been detected with high levels of radiation. According to Paramita, they have “a brownish tint, looking very much like African stones.” No one knows how many treated stones have entered the United States since the alert, and there’s no way to distinguish them from others without testing for radiation with a Geiger counter.

Gem merchants in Indonesia we interviewed feel that the radioactivity is no more dangerous than that given off by any other irradiated gem, but after testing the rubies ourselves, we determined that’s not the case.

Agreeing with us is Kurt Nassau, Ph.D., a respected research scientist in Lebanon, N.J., and author of Gemstone Enhancement (2nd ed., Butterworth-Heinemann, 1994). “They are dangerously radioactive,” he states flatly. Nassau speculates that the stones were irradiated in an effort to change their color to padparadscha (pink-orange), which is one of the most prized hues of corundum. Apparently the treatment didn’t work. “Now they’re only good for burying,” Nassau says.

– Gary Roskin

CSO SALES PLUNGE, BUT THAT’S GOOD

De Beers’ Central Selling Organisation’s policy of restricting diamond sales has succeeded in stabilizing the market, but the CSO is paying a hefty price. Sales of diamonds during the first half of this year plunged to $1.7 billion – 41% below the $2.9 billion in sales for the same period last year. It was the CSO’s worst first-half performance in more than a decade.

De Beers officials explain that contraction of the Asian markets, coupled with high levels of supply remaining from early 1997, left the industry in “an overstocked position.” The CSO began its cutback late last year, slashing second-half 1997 sales by 16% from those of the corresponding period in 1996.

In a statement, the CSO says its sales cutbacks are working: “The CSO’s restricted sales and the absence of any significant flows of diamonds from other centers means the supply of rough diamonds is running below the level of retail consumption. This has allowed the cutting centers to run down their rough and polished stocks by an estimated $1 billion since July 1997.” The statement claims that the restricted sales kept diamond prices steady, protecting the diamond industry and preventing a decline in “consumer confidence in diamonds.” Wall Street analysts agree with this interpretation.

On the brighter side, strong increases in retail diamond-jewelry sales are expected in the United States, Canada, India, and Europe, with modest growth forecast in China, Taiwan, and the Middle East. As these markets strengthen, the CSO says, it is “modestly increasing” its mid-year sights and plans to add gradual increases throughout the year “provided retail consumption remains at present levels.”

DE BEERS RAISES ITS PROFILE

If you’re hearing the name “De Beers” a little more lately, it’s no accident. After years of crouching below the radar screen – especially during the darkest days of apartheid – De Beers is spending its considerable advertising budget on promoting not just diamonds, but also itself. While De Beers used to limit its presence in its black-and-white “Shadows” commercials, the company’s name is now prominently displayed and spoken at the end of every ad.

De Beers officials give a variety of reasons for the increased visibility, from wanting the jewelry trade to know what it’s doing for the industry to simple corporate pride. “The people at De Beers are very proud of their name and wanted to give it more visibility,” says Joan Parker, director of the Diamond Information Center at J. Walter Thompson, the big New York advertising agency. Parker says that the company’s research found “increased awareness of the De Beers name but a decreased awareness of what it does. We want consumers to know the expertise behind the name.” Thompson officials also note that focus groups respond well to the De Beers name and that they like the idea of a venerable mining company standing behind its products.

Yet many in the diamond business have mixed feelings about De Beers showing its corporate face. The South African connection has been an occasional image problem for diamonds; in the 1980s, several members of Congress even considered banning diamond imports as a sanction against apartheid. And while De Beers historically has been a staunch proponent of racial equality, consumers may still have a negative reaction to a white-run South African corporation, no matter how progressive it is. But Parker says De Beers research found consumers have rarely associated the company with South Africa, even during the height of the anti-apartheid movement. “We were always worried that would become a big issue, but it never was,” she says. – Rob Bates

AGS ADDS PROGRAMS AS ITS LAB BOOMS

The American Gem Society is adding workshops for its members in conjunction with national and regional trade shows. The half-day programs will feature speakers from the Jewelers Education Foundation and will cover sales, marketing, business, and gemological topics.

The first workshops were scheduled to be held during the Jewelers of America International Jewelry Show in New York City last month, the Pacific Jewelry Show in Los Angeles (Aug. 22-24), and the Columbus Jewelry Show in Columbus, Ohio (Aug. 29-30).

AGS has also announced that:

  • The AGS laboratory, established in 1995, already examines about 2,000 gemstones a month. Growth has been so rapid that AGS has converted its board room into a lab facility and may soon expand its new Las Vegas headquarters building.

  • Starting this summer, each jeweler will receive a free diskette containing complete information on the stones graded by the AGS lab.

Meanwhile, AGS membership is about to take a significant jump. The society received more than 80 applications during The JCK Show in June. If accepted, these newcomers would represent a 5% increase in AGS’s current membership of 1,400.

VERNERABLE STORE CHANGES ITS NAME

What could induce a jeweler that pulls in more than $2.5 million in revenues each year in the Westwood neighborhood of Los Angeles – one of the most competitive retailing markets in the United States – to change its name? After more than half a century in business, that’s what Crescent Jewelers is doing later this year.

According to Jeffrey Abell, Crescent Jewelers’ vice president, the company has reached a settlement with Crescent Jewelers of Oakland, Calif., through which the latter firm acquired the right to use the trademark and name. The Oakland-based firm is a growing credit jewelry chain with $150 million in revenues and 152 locations in California, Arizona, New Mexico, Nevada, Oregon, Texas, and Washington.

Though both firms were founded more than 50 years ago, competitive issues between the two didn’t arise until the late 1980s, when the Oakland group began expanding into the Los Angeles market.

Crescent Jewelers will ask customers and the public at large to vote on a new name for the store from among several options. Their votes will be entered in a random drawing with the winner receiving a $5,000 shopping spree at the store. The new name will be unique to the firm and registered nationally so that similar conflicts don’t occur in the future. It will be announced this fall.

DIAMOND GIANTS MERGE IN NEW YORK

Two of New York’s premier diamond companies, Ferman & Roisen and Kwiat Inc., have merged. The new firm is known as Kwiat, Roisen & Ferman Inc.

Kwiat, founded in 1907, sells loose diamonds and finished jewelry to retailers throughout the United States. Ferman & Roisen, which has one of the largest diamond manufacturing facilities in New York, specializes in selling large, high-quality diamonds internationally.

Kwiat vice president Lowell Kwiat says the merger cements an informal alliance dating to the 1930s. “My grandfather, Samuel, was Ferman & Roisen’s best customer then,” says Kwiat.

“We’ve always had one of the strongest inventories in the United States,” Kwiat adds. “We are able to fill virtually every request for goods. This will make us even stronger.”

Jacques Roisen of Ferman & Roisen says he will “remain as active as ever” in the business he’s headed for more than 50 years. Roisen is a past president of the Diamond Manufacturers and Importers Association of New York. The new combined firm will keep separate offices for some time because of lease commitments, according to Roisen.