JVC Names New Executive Director
After a long search, the Jewelers Vigilance Committee has chosen Cecilia L. Gardner, a tough-minded former prosecuting attorney, as its new executive director and general counsel.
Gardner began her career in 1977 as an examining attorney with the New York City Department of Investigation, successfully prosecuting a ring of jewelry store thieves and New York’s Josi Jewelers for a fraudulent $4 million insurance claim.
Her appointment paves the way for the JVC board to begin a review of the group’s industry role. The full board will hold a special, day-long “retreat” July 15 to set its new priorities, including a three-year strategic plan and a new approach to marketing. To aid its marketing efforts, the board will name a new advertising agency.
The drive for change reflects the determination of JVC’s president, Lee Berg of Lee Michaels Fine Jewelry in Baton Rouge, La., to reestablish JVC as a credible industry force. Declining membership with a related loss of funding, along with lack of continuity in the executive director post, have taken a toll at the organization. Michael D. Roman, former chairman of Jewelers of America, came out of retirement last year to become acting executive director until a new candidate could be recruited.
Gardner says she will try two approaches to attract new members. One will involve providing “real tools” – including, for example, a how-to package explaining the impact of the Federal Trade Commission Guides for the Jewelry Industry on day-to-day store operations. The other is to elevate the jeweler’s reputation in the marketplace.
Gardner realizes there’s a way to go to clean up some of the misrepresentation – of quality and price – that too many jewelry retailers indulge in. This may take legal action, and “I will get more involved in this aspect [of JVC’s] work,” she says.
Gardner is a graduate of Hofstra University School of Law, where she teaches international criminal law as an adjunct professor. She has served as a special attorney with the U.S. Department of Justice Organized Crime and Racketeering Section and as an assistant U.S. attorney in the Eastern District of New York. For her work on the Josi Jewelers case, she received the prestigious Director’s Award from U.S. Attorney General Janet Reno.
VIRUS DEVASTATES JAPANESE AKOYA
For years, the Japanese have been predicting shortages of pearls with attendant price increases. Now there truly is a shortage, and a price increase has already begun.
The suspected culprit is a virus. To meet demand, the Japanese began importing Chinese akoya a few years ago, and it’s these imports that are blamed for killing off so many pinctada martensie oysters in Japanese waters. Cultured pearl production has plummeted 50% this year and could drop sharply again next year. The Japanese government has permanently banned importing Chinese akoyas.
“It’s been going on for a year now,” says Ray Mastoloni of Frank Mastoloni & Sons Inc. in New York. “We saw it coming to fruition in the bleak harvest last November and December.”
During past disasters, caused by the red tide, hurricanes, and changing water temperatures, the akoya were also hard hit, but prices remained relatively stable because wholesalers could draw on inventory to meet demand. The virus disaster is different. Inventories weren’t built up in advance, and now supply is reaching a crisis stage.
“What’s mostly affected is the better merchandise,” says Mastoloni. “It has been very difficult to find clean, unspotted pearls.”
Price increases by the Japanese have been somewhat blunted in the United States because of the falling yen. “The Japanese raised prices, but with the falling yen, the increase might average 20-30% in the finer quality, and in lesser-quality merchandise, 10-15%,” says Mastoloni.
Rick Matsui, vice president of Hikari Southsea Pearl Co. Inc. in Los Angeles, sees the virus crisis enduring through 1999. “The offspring of the next generation seem to be rebounding, and by 2000, we should begin to see more harvest,” he says. It takes two to three years to raise an oyster capable of taking implantation and another two to three years to build up the nacre.
PLATINUM JEWELRY STILL STRONG
The popularity of platinum jewelry is strong and growing, according to data released by the Platinum Guild International, USA Jewelry Inc. Sales have risen 700% since 1992. Last year alone, U.S. platinum manufacturing increased 75%, a new record, in part because of strong Mother’s Day sales.
“Platinum is the fastest growing precious metal category in the U.S.A. today,” said Laurie Hudson, president of PGI-USA, at its annual breakfast and fashion show during last month’s JCK Show in Las Vegas.
Much of that growth is due to the efforts of Hudson and her staff, said James Courage, chief executive of the Platinum Guild International worldwide. In 1992, when PGI opened its U.S. office, few American jewelers stocked platinum jewelry, he noted. Today, 10,000 do, almost a third of the total 35,000 platinum-selling retailers around the globe. Bridal jewelry, especially, is claiming a bigger share of the pie. Today, 22% of all engagement rings are in platinum, he said.
Little Switzerland Deal is called off
A deal to combine the two biggest jewelry chains in the Caribbean has been called off. Little Switzerland Inc., with 24 stores on 10 islands, said it terminated its proposed merger with Destination Retail Holdings Corp., which has 60 stores, including those operating under the Colombian Emeralds and Diamonds in Paradise names.
Little Switzerland said it ended the deal because Destination could not come up with the cash for the buyout and is unlikely to do so. Citing irreparable harm to the company as a result of Destination’s inability to honor its contract, Little Switzerland said it is beginning legal action against Destination and others seeking damages.
Little Switzerland said that since the announcement of the proposed merger, it has “suffered the loss of certain key managers as well as adverse changes to certain of our vendor relationships.” Reportedly, the Rolex brand, which accounted for about one-quarter of total company sales, will now be sold by a number of competing Caribbean jewelers.
Little Switzerland will continue to operate as an independent company.
Cheaper Certs for Smaller Diamonds
Starting this fall, the Gemological Institute of America will issue diamond mini-certificates that will cost about 25% less than its existing grading service. The passport-size reports will be limited to stones ranging from 0.23 ct. to 0.99 ct. They will carry color and clarity grades but will eliminate the inclusion plot, the most labor-intensive part of grading.
The new report, which will include proportion and measurement information, is designed to make GIA grading affordable for smaller diamonds, says GIA president William Boyajian. Dealers and retailers have long complained that the profit squeeze in diamonds makes the GIA Gem Trade Laboratory’s standard $93 grading fee uneconomical for smaller stones. Labs offering lower cost have won much of the business.
To identify graded diamonds, GIA will use new micro-laser technology to inscribe report numbers. The new process uses “much more advanced technology” than the 20-year-old system licensed from Lazare Kaplan International, Boyajian says. Inscriptions are shallower and smaller – only 60 microns high – but can be read with a 10x loupe, according to GIA.
“We have noticed a dramatic increase in inscription requests,” says Tom Yonelunas, the GIA lab’s CEO. “The trade has seized on diamond inscription as a huge value-added marketing opportunity. Consumers love the security and personalization of an inscription.”