UpFront

JEWELRY SALES SHINE DURING OTHERWISE DISMAL HOLIDAY, BUT PROBLEMS MAY BE IN STORE FOR ’96

Christmas 1995 was dismal for most retailers, especially apparel and discount stores. In fact, retail and financial analysts say the overall 2% retail sales increase between Thanksgiving and Christmas was the smallest since the recession of 1990.

For jewelers and other luxury retailers, however, the news was better. A poll by JCK, interviews with the leaders of jewelry industry associations who surveyed their own memberships and a study by the International Council of Shopping Centers found jewelers did well overall during Christmas 1995. Some even called it their best Christmas ever.

Among those with double-digit gains were Tapper’s Diamonds & Fine Jewelry in West Bloomfield, Mich., and James Free Jewelers, Dayton, Ohio, each up 25%; Tiffany & Co., up 23%; the 99-store Reeds Jewelers in Wilmington, N.C., and Traditional Jewelers, Newport Beach, Cal., both up more than 20%; and Seymour Gail Jewelers, Torrance, Cal., up 14%. Sterling Inc. of Akron, Ohio, the #2 U.S. jewelry chain, saw comparable-store sales rise 10%. Also reporting double-digit gains were Merksamer Jewelers, Sacramento, Cal.; Ben Bridge Jewelers, Seattle, Wash.; Riddle Jewelers, Rapid City, S.D.; and some leased jewelry departments, including J.B. Rudolph and Parisian (Wedlo).

However, most jewelers polled had single-digit gains. For example, comparable-store holiday sales rose 7.6% for Zale Corp., the largest U.S. jeweler, and 2% for Barry’s Jewelers, the fourth-largest. At Cartier, December sales were 5% ahead of projections.

Holiday sales didn’t stop on Christmas Day. Many jewelers were busy in the two weeks after the holiday with consumers who were snowbound earlier or who bought jewelry for themselves with holiday gift money, say Matthew Runci, executive director of Jewelers of America, and Tom Dorman, executive director of the American Gem Society. Runci notes it is “more important than ever” to redefine the Christmas season to include days after the holiday itself.

A hard holiday: Despite mostly upbeat results, jewelers agreed with other retailers that making holiday sales was hard this year. Even those with the most success say sales didn’t really take off until a week or so before Christmas. They noted several reasons:

  • Severe winter weather, especially in the East. “It was terrible in the Northeast,” says Joel Sneider, president of the 116-store Littman’s, Edison, N.J. “I figure snowstorms cost us 4%-5% of our expected increase, turning a potentially spectacular Christmas into a very good one [a 7.6% same-store increase].”

  • Rising consumer debt. Many shoppers couldn’t or wouldn’t run up more credit-card debt. A number of jewelers who had tightened their private-label credit card policies reported higher cash sales. The exception seemed to be in the West, where some jewelers noted more use of bank credit cards, though some of them also had higher write-offs.

  • Concern about the nation’s economy. Government and private economic reports and news about company downsizings and layoffs made some consumers concerned about jobs and the economy’s direction. Less spending was the result.
    “I think customers were scared,” says Howard Sherwood of Sherwood Management, a 34-store chain in Bell Gardens, Cal., that caters to the working class. “They all knew someone who was laid off, and held back.” Ironically, 1995 was a good year for the stock market. “But that doesn’t apply to the average Joe who goes to a small local jewelry store or catalog showroom to buy jewelry,” notes Nathaniel C. Earle, president of the Jewelers Board of Trade.

  • Concern about regional economies. Mexico’s economic problems affected some Southwest jewelers. For example, Don Roberto Jewelers in San Clemente, Cal., with many of its 41 stores near the border, had flat sales. Temporary shutdowns of the U.S. government due to stalled budget talks affected jewelers in towns with military bases or a big federal work force.

  • Competition from other traditional and non-traditional jewelers as well as from specialty retailers selling such products as electronics, cars and home furnishings. For example, “Certificate diamonds now are sold everywhere from the Internet to Wal Mart,” says Dale Perelman, president of King’s Jewelers chain covering western Pennsylvania, southeastern Ohio and West Virginia.

Christmas 1995 was a real dog fight, says Jeffrey Comment, president of Helzberg Diamonds, North Kansas City, Mo. “But when the dust cleared, we held the line without discounting and kept very close to our gross-margin plans.”

Fighting back: Many jewelers used aggressive marketing to fight these challenges. Thus, Tapper’s Diamonds “did a tremendous amount of advertising to keep our name out there,” says President Howard Tapper. It used co-op ads from the World Gold Council, manufacturers’ ads in regional issues of national magazines, ads in Detroit Monthly and stack ads in local newspapers.

In Dayton, Ohio, James Free Jewelers advertised heavily on cable TV, sent direct mail every week, placed ads on billboards, bought radio spots and used consumer-oriented promotional pieces such as JCK’s GEM magazine and the World Gold Council’s merchandise catalog.

Sterling’s new initiatives included more point-of-purchase advertising and allocating more ad money to stores in areas with the best opportunities for sales improvement.

Meyers Jewelers in Detroit, Mich., said holiday sales rose 8% due to changes in advertising (more newspapers and fliers, less radio), an upgraded look in the stores and emphasis on sales training. Riddle Jewelers “put it all together,” says Jess Riddle, with store remodeling, increased inventory, more advertising and easier consumer credit.

At Ben Bridge Jewelers, new products, more ads and sales training helped make a difference, says Chairman Bob Bridge. And Zale Corp. customers responded to “quality merchandise at affordable prices, strong marketing campaigns and top-notch customer service,” says a spokesperson.

Product: As for best-sellers, it was a “diamond Christmas,” as one jeweler put it. De Beers estimates a 5%-7% increase in diamond jewelry sales; AGS jewelers say diamonds accounted for 50%-60% of their holiday sales (some reported using lower margins than last year). While bridal merchandise was strong, other winners included tennis bracelets, diamond studs and necklaces. Sales of 1-ct. diamonds were good.

Some chains – such as Reeds and Glennpeter Jewelers in Schenectady, N.Y. – noted particular success with diamond earrings. More expensive diamond dinner rings were strong sellers for some, including Wedlo’s Parisian leased jewelry departments.

Designer merchandise and watches sold well, but colored gem jewelry seemed less popular overall, say jewelers.

Much of the diamond business was in the $500-$1,000 retail range, and a number of jewelers say customers sought better quality and larger stones. “People were watching their dollars, but looking for quality, not quantity,” says Leonore Olsen, chief operating officer of the 19-store Meyers Jewelers in Detroit, Mich. One AGS jeweler, for example, tells of a customer who heard his ad on the car radio and drove 23 miles to make a purchase. The customer said he appreciated the ad because it stressed quality, not price.

The year ahead: Because of the overall weak retail climate during the Christmas season, analysts are concerned that some middle-of-the-road and smaller operations could be forced out of business.

This should concern the jewelry industry also, says JBT’s Earle. But payment and dating arrangements in this industry mean the winners and losers won’t be known for a few more weeks. “We may not see the big retailers drop out as they did in the past, but a lot of people in the jewelry industry are discouraged,” he says.

Earle cites JBT’s weekly service bulletins, which include names of companies that have gone out of business and those affected by bankruptcy filings. “Many businesses used to file for Chapter 11 bankruptcy protection so they could reorganize business and go on,” he says. “But starting in the second half of 1995, more businesses started to discontinue operations and leave unpaid obligations. They have no intention of continuing the business.

“In the past, we had shake-ups. Now, it’s more of a shakeout.” Earle attributes this to long-term economic problems, reports of lower consumer confidence and concern about employment. “This may be the year that breaks the camel’s back,” he says.

Even though jewelers had a better-than-expected Christmas, many agree with Earle. They think the business climate will be soft this year and pressure on margins will continue for the foreseeable future. “It won’t be a good spring,” says Wedlo President Robert Keller. “Consumers are still cautious. A lot of layoffs and the federal shutdowns have taken a lot of money out of the economy.”

“It’s a hostile retail environment, and we’re getting no help from the economy,” says Sterling President Terry Burman. “But that doesn’t mean the only way to react is with [price] promotions. You separate yourself from the competition through improved staff training, customer service, merchandise and response to fast-selling items. You react to a difficult retail environment by running a sound retail business.”

A JCK staff report by William George Shuster, Jack Heeger, Ren Miller, Hedda T. Schupak, Russell Shor, Michael Thompson and Robert Weldon.

AGTA GEM CERTIFICATE? YES, MAYBE

The American Gem Trade Association is considering issuing gemological laboratory certificates and hopes to test the waters with a six-month pilot project this year.

AGTA would not create its own lab to issue gemstone certificates, but would establish relationships with existing ones. Negotiations are under way with Guild Laboratories, a Los Angeles operation run by Charlie Carmona, and the International Gemological Laboratory, a New York City operation run by Jerry Ehrenwald.

“This has been a pet project of mine for quite some time, but we are only in the beginning stages,” says Joseph Mardkha, a member of AGTA’s board of directors and owner of Colormasters Gem Corp., New York City. Late last year, Mardkha surveyed firm and affiliate AGTA members about the idea. So far, the response has been mixed to good, he says.

Treatment disclosure is the major reason AGTA is considering the certificates, says Executive Director Peggy Willett. “There is a tremendous void on treatment disclosure for gem consumers; we’re worried because they are getting little or no information,” she says. “But it’s important to point out that AGTA has made no firm decision yet to implement a certificate plan permanently. We are only in the preliminary stages and are studying form and content for the certificates. We want everything to work in tandem with our Gem Enhancement Manual and with Federal Trade Commission guidelines.” Board members are expected to iron out details at the AGTA GemFair in Tucson.

The certificates, which Mardkha calls certificates of authenticity, would list all gem treatment information and would do so in a positive light. They would not list any type of grading (such as color), shape preference or country of origin. For this reason, Mardkha says AGTA would not be competing with other established labs.

Adds Mardkha, “Obviously, the certificates would have to generate money. But they would also be a vehicle to get AGTA much more involved with retailers, the end consumer and general public. That interaction would inevitably help our membership.”

Member Dana Schorr of Schorr Marketing and Sales, Santa Barbara, Cal., likes the idea. “I think the plan could be a good one if it is implemented properly with knowledgeable, respected scientists, and if proper safeguards are put in place to avoid conflicts of interest.”

But conflict of interest could be a serious problem, says C.R. “Cap” Beasley, owner of American Gemological Laboratories, New York City, an AGTA affiliate member. “This type of activity may appear to be good for the trade, but it is really bad for the consumer and ultimately the trade. Here is an association that represents gem dealers that will be issuing certificates and, of course, is interested in putting out only information that is favorable to the selling process.”

Willett acknowledges the idea has drawn concerns as well as enthusiasm. But she notes that decisions on a permanent certificate program won’t be made until results of the pilot program are known. A start-up date for the pilot program hasn’t been set yet.

– Robert Weldon

DE BEERS, RUSSIAN TALKS FALL SHORT OF AGREEMENT

Officials of De Beers and the Russian government failed to reach a new rough diamond marketing agreement at a meeting just before Christmas. But they did agree to extend the old agreement 30 days while talks continued.

Nicky Oppenheimer, chairman of De Beers’ Central Selling Organisation, didn’t think the lack of a new agreement would cause problems in the diamond market, as some commentators have predicted. “The Russians stress that their interests, like ours, can be served only by a stable market,” said Oppenheimer. “And even if no formal contract is signed, I believe we shall continue to buy substantial quantities of Russian diamonds in the open market.”

Oppenheimer, CSO President Anthony Oppenheimer and De Beers board member Gary Ralfe were scheduled to return to Moscow this month to continue negotiations. “In our negotiations with the Russians, as with every producer, our aim is to protect all areas of the diamond pipeline and maintain the stability that is so essential to the enduring health of our dynamic industry,” said Oppenheimer. “The CSO has clearly demonstrated the strength of that resolve in its ongoing efforts to absorb overproduction in certain areas.”

Oppenheimer also noted that De Beers and its partners in Botswana and Namibia mine half of the world’s diamonds by value and remain the world’s leading producers.

Regarding demand, Oppenheimer said diamond jewelry sales grew in 1995 and should continue to do so in the next five years thanks to growing economies worldwide, and particularly in Southeast Asia.

On the supply side, 1995 was a mixed year, bringing a glut of small diamonds under 11 points. “The surplus of Indian and mixed gem goods, due to large sales outside the CSO, weakened polished prices in those areas still further, and in July a price realignment was necessary,” Oppenheimer said. The realignment resulted in higher prices for larger diamonds and lower prices for smaller, cheaper ones.

Oppenheimer said record-breaking auction sales of diamonds in 1995 showed that demand for larger, better qualities is strong. Because of this and increasing consumer demand for diamond jewelry, he said, “we enter 1996 in a spirit of confidence and optimism.”

SIGNET SEEKS BUYERS FOR U.K. OPERATIONS

The Signet Group, the world’s largest retail jeweler and parent of Sterling Inc. in the U.S., is seeking buyers for its operations in the United Kingdom to reduce debt and increase earnings. The 610 U.K. stores comprise the Ernest Jones and H Samuel chains and a few individual outlets.

If there is a sale, Signet plans to put all its attention and investment into Sterling, which now accounts for 60% of its business and is the second-largest U.S. jewelry retailer with 870 stores.

The announcement about the U.K. operations came following a strong Christmas season and generally improved financial results for the beleaguered retailer. The company expected pretax profits for the fiscal year ended Feb. 3 to be far ahead of most analysts’ expectations and far ahead of last year’s $12.6 million. Much of this is due to the U.S. business and efforts by Signet to cut costs and improve operations.

In the U.S., Sterling’s same-store sales rose 10% for Christmas 1995 (the eight weeks ended Dec. 24). Signet attributes the increase largely to initiatives by Chief Executive Terry Burman, who was appointed in September. In the U.K., Ernest Jones also enjoyed a 10% gain, while H Samuel (which appeals to a broader market) saw sales drop 3%.

After Christmas, Signet officials decided the best way to reduce the company’s sizable debt, enhance earnings and maximize value for shareholders would be to sell the U.K. operations. Signet had no firm offers at press time, but officials said Goldsmiths, a 119-store chain based in London, has said repeatedly it would pay more than $387 million for Signet’s British operations. Signet Chairman James McAdam has refused to consider or discuss the offer.

Signet spokesman Michael Mitchell says the company will consider any serious offers, regardless of whether they are British or in retail. Signet has not set a target date for a sale, but Mitchell said the sooner the better so Signet can develop its remaining business.

SYNTHETICS IMITATE TANZANITE & TSAVORITE

Two synthetic gemstones have been appearing on the market since late 1995, tapping into the current popularity of East African gems.

One is cortanite, a tanzanite simulant, and the other is yarolite, which imitates natural tsavorite garnet. Both are synthetic corundum and both are distributed by Gemstones International, Sayreville, N.J.

Cortanite is manufactured in the Far East, says Kenneth Cohen of Gemstones International. Its name comes from “cor” for corundum and “tan” for tanzanite, and was so dubbed by the supplier.

Cohen says sales of cortanite have been brisk, especially to such mass marketers as the Home Shopping Network, Best Products and Value-Vision. Calibrated material is $3-$15 per carat, compared with $200-$400 for natural tanzanite, which is in short supply.

Cohen is aware of the problems that could occur if cortanite is sold as tanzanite. “We know there have already been some lab alerts in India where the material was sold as tanzanite,” he says. “But we are looking for a way to mark the stones – maybe through laser marks on the girdle – so this won’t happen down the road.”

Julia L. Golden, a gemologist and appraiser in Royal Oak, Mich., has studied several samples of cortanite. “Transparent samples varied from a medium light blue-violet to a more intense vibrant blue-violet hue,” she says. “Color zonation appears to vary depending on the size of the faceted material.” The gemological properties coincide with those of synthetic corundum. In addition, Golden observed curved bands and gas bubbles in some samples.

Cortanite can be separated from natural tanzanite with a few simple gemological tests, such as determining refractive indices or specific gravities.

Yarolite, meanwhile, imitates the vibrant green of tsavorite. In fact, the name derives from the Hebrew word for green, which is phonetically pronounced “yarok.” Yarolite sells for $5-$15 per carat, compared with $650-$1,400 for natural tsavorite.

Cohen says larger yarolite doesn’t look much like tsavorite because the color isn’t as saturated, but that it’s harder to separate natural from synthetic in smaller, mlŽe sizes. The manufacturer is looking for a way to make the synthetic appear much greener.

Golden says the material is consistent with Czochralski pulled synthetic corundum and has consistent gemological properties.

COLORADO DIAMONDS EXPECTED THIS YEAR

Diamonds from Colorado’s Kelsey Lake deposit may be ready for market by midyear, says Howard Coopersmith, president of Diamond Co. of Colorado, a junior partner in the venture.

They may be marketed as American Diamonds under contract to a number of U.S. retailers or dealers, though he declines to name names. Several diamond dealers in New York have expressed interest in the diamonds.

Michael Coulter, secretary for Redaurum of Toronto, the senior partner, says various options are being considered and that the diamonds may be sold to specific clients or through tender offers.

“We haven’t considered selling through De Beers because we believe the U.S. market can readily absorb these quantities,” says Coulter. Production will be small by diamond industry standards, totaling about 25,000 carats this year and 100,000 to 150,000 carats yearly at the peak. However, the quality of the stones – 65% gem and a quarter of them larger than 1 carat – makes the venture profitable.

The ore will be processed at a $2 million facility that is expected to open this month and be fully operational by midyear. If successful, the facility will be expanded from a capacity of 250,000 tons of ore yearly to 1.2 million tons.

Kelsey Lake, which is near Ft. Collins, consists of eight kimberlite pipes, two of which contain commercial quantities of diamonds. Redaurum also holds a 50% share in Zimbabwe’s River Ranch diamond deposit and two small alluvial South African diamond mines. Redaurum officials say their total diamond production is expected to expand to 750,000 carats by the end of next year. But the productions won’t be mixed because agreements with each producer are too different, says Coulter.

The River Ranch diamonds are sold by tender in Antwerp, with the proceeds split 50-50 with the Zimbabwe government. The South African goods are sold by tender in Cape Town, but may be sold elsewhere as production increases.

ATTORNEYS FOR GOLDEN ADA, RUSSIA TRADE CHARGES

Attorneys for Golden ADA of San Francisco and the Russian government hurled charges of fraud and mismanagement at each other following an Internal Revenue Service raid on the company in November.

IRS agents say the company owes $63 million in back taxes. This is on top of a $150 million lawsuit filed earlier by the Russian government over the disappearance of $88 million worth of rough diamonds and more than $60 million worth of gold and other gems allegedly sent to the company.

Attorneys for Golden ADA suggest the disappearance of gems and gold is connected to corrupt Russian officials. They note the Russian government is investigating the Committee for Precious Stones and Metals (which markets Russia’s rough diamonds and gold) regarding the items mentioned in the lawsuit. That investigation began in mid-1995 and focuses on Evgheny Bychkov, the committee chairman.

Golden ADA was founded in 1992 by two Russian Armenians, Ashot and David Shagirian, and a well-connected Russian businessman, Andrei Kozlenok. The company kept a very low profile until spring 1994, when word leaked out it had imported $88.9 million worth of rough diamonds directly from Russia. Company officials said at the time they planned to polish and market high quality diamonds from their office at 999 Brannan St., but allegedly none of the stones ever made it to the open market.

Here the tale gets murky. According to The San Francisco Chronicle, the Shagirians say in papers filed in response to Russia’s lawsuit that Kozlenok forced them to sell their interest in the company for $5 million shortly after the last shipment of rough diamonds arrived. The Chronicle says the Shagirians allege Kozlenok was connected with the Russian mafia and allegedly gave them a choice: “Take the $5 million or a bullet in the head.”

The company then reportedly went on a buying spree, acquiring more than $20 million worth of real estate, boats, luxury cars, a jet aircraft and a helicopter. The Russian suit alleges that Golden ADA sold the rough to several Antwerp dealers and has refused to repay the Russian government.

Following the Shagirians’ departure, the company went through a number of management changes. Recent additions include Peter Michaels, formerly of Rubin and Son, and several top city officials, including Jack Immendorf, a friend of new Mayor Frank Jordan and state Sen. Quentin Kopp. The Chronicle says attorneys in the case say Golden ADA hired the politicians because that’s the practice in Russia “if they want problems to go away.”

None of the new hires are named in the IRS action or the Russian lawsuit. However, former Golden ADA attorney C. Matthew Schulz is suing the company for wrongful dismissal; a counterclaim from Golden ADA alleges that Schulz and Michaels tried to transfer $1.2 million from company accounts into an offshore bank. The Chronicle also reports that Immendorf received as much as $2 million for his work with the company. Immendorf denies receiving that much from Golden ADA.

Kozlenok sold the company to Indian businessman Rajiv Gosain this past fall and reportedly left the U.S. Golden ADA remains in business, but company officials decline to comment.

INDEPENDENT COMPANY OFFERS APPRAISAL CLASSES

The Jewelry Insurance Appraisal Institute, an underwriting and insurance claim mitigation company in Oakland, Cal., planned to conduct classes for jewelers Jan. 29-Feb. 1 in Tucson. David W. Hendry, institute founder, says the classes are designed for those who want to learn more about appraisal requirements from an insurance company perspective.

The class, limited to 28 people, continues a year-long series taught by Hendry. Students who pass an exam at the end of the four-day session will receive a “Certified Insurance Appraiser” degree, which Hendry created. In the near future, CIA degree holders are to form a Jewelry Appraisal Registry (JAR), which Hendry’s literature calls “the insurance industry’s national registry of jewelry appraisers.”

However, the JAR is not yet operational. And Hendry, who says his company is independent, notes that the CIA designation is not recognized by the largest jewelry insurance companies, including Jewelers Mutual and State Farm. He says he has signed a “non-disclosure agreement” with the companies he represents as an insurance claims mitigator and, therefore, cannot reveal their names.

RTZ-CRA MERGER CREATES LARGEST MINING COMPANY

Shareholders have approved the merger of two of the world’s largest mining companies: RTZ of Great Britain and CRA of Australia. The RTZ-CRA conglomerate will have annual earnings of some $2 billion, putting it far ahead of such mining giants as Kennecott and Anglo American, say analysts.

There was little indication of how the merger would affect the gold market (the companies account for a combined 9% of the market). Neither was there an indication how it would affect Australia’s Argyle Diamond Mine, of which CRA is the major partner. However, analysts do say RTZ and CRA have been closely related for a long time. RTZ owned 49% of CRA’s shares and was actively involved in its management. The merger will complete the marriage, they say.

The Australian government imposed several conditions before approving the merger, indicating its concern over transferring control over natural resources to a foreign company. The conditions include:

  • At least one-third of the combined group’s directors must be Australian.

  • CRA must keep sufficient separate identity by controlling its Latin American operations separately from RTZ.

While the companies’ assets will be combined in the merger, each will retain separate stock exchange listings. This allows the company to complete the merger without buying all the shares on the market and paying a premium for them.

DIAMOND COVERAGE ADDED AT JCK LAS VEGAS SHOW

The diamond segment of the conference program at the JCK International Jewelry Show in Las Vegas is being given added dimension with a presentation by Hertz Hasenfeld of Hasenfeld-Stein, New York City, a De Beers sightholder.

Hasenfeld will give a talk titled “Strategic Diamond Buying” at 10:30-11:40 a.m. Wednesday, May 29. The presentation will center on three critical issues: the proper inventory mix, the importance of cut and proper pricing.

Martin Rapaport of Rapaport Diamond Corp., who originally was billed to speak at that time, will now speak at 8:30-9:40 a.m. Sunday, June 2. His talk is titled “The Art of Diamond Trading.”

SOTHEBY’S TO AUCTION JACKIE O’s JEWELRY

The estate of Jacqueline Kennedy Onassis will go on the block at Sotheby’s New York gallery April 23-26. The 40,000-lot auction will encompass virtually all of the former first lady’s personal property, ranging from a French grammar book she used in elementary school to the desk on which President Kennedy signed a nuclear test ban treaty in 1963.

Jewelry lots include a 40-ct. diamond ring (presale estimate $500,000-$600,000) and signed pieces that include an emerald and diamond necklace by Van Cleef & Arpels (presale estimate $100,000- $125,000).

A preview will be held the five days before the auction. Admission to the preview and sale will be restricted to 30,000 names drawn randomly by computer from among buyers of the $90 auction catalog.

Sotheby’s, 1334 York Ave., New York, N.Y. 10021; (800) 444-3709.

ROBERT KAMMERLING, GIA VICE PRESIDENT, DIES

Robert C. Kammerling, 48, vice president of research and development at the Gemological Institute of America’s Gem Trade Laboratory, died unexpectedly Jan. 7 at his home in Culver City, Cal.

Kammerling went to GIA to study gemology in 1981 and was recruited out of the classroom by GIA President William E. Boyajian to teach the gem identification and colored stone courses. He became a full-time instructor and later manager of marketing and new projects, public information officer and director of technical development. He was promoted to GTL vice president in 1995.

“This is a tragic loss,” says Boyajian. “Bob was one of the most outstanding people I have ever known and one of the most brilliant minds in modern gemology. He was also a great spirit and a good friend.”

Kammerling traveled widely through Asia, Africa and South America to research key gem localities. He was known throughout the industry – here and abroad – because of his conference presentations and the more than 400 articles and columns he wrote for technical journals and trade magazines, including JCK. He served on the editorial board and as section editor of GIA’s Gems & Gemology quarterly and coauthored a number of landmark G&G reports. He also coauthored Gemology (second edition) and contributed to the GIA Diamond Dictionary and Gems: Their Sources, Descriptions and Identification. He wrote course material for GIA’s on-campus gemology program and worked with GIA’s GEM Instruments subsidiary on the development of gem identification instruments.

Kammerling’s life and contributions to gemology will be recognized at upcoming GIA events.

J.W. THOMPSON PLANS FUTURE FOR DPS, DIC

De Beers’ Diamond Promotion Service and Diamond Information Center have a new advertising agency, but their programs and staff remain largely intact. So says Jim Haag, senior partner at J. Walter Thompson, which took over the account from N.W. Ayer.

The switch officially occurred Jan. 1, though the transition to JWT actually began in October after the staff had a falling out with N.W. Ayer and left for JWT.

“Everything for the fall ’95 campaigns went off without a hitch,” says Haag. Advertising and promotion plans for this year were delayed four to six weeks, however, but Haag foresees no problems. The budget remains about $57 million, and most programs and campaigns will be similar to those of 1995. “The only difference is that diamond quality will take on a bigger role in the anniversary collections and other diamond jewelry brands,” he says.

The switch in agencies also will allow De Beers to merge its U.S. and Canadian operations. JWT’s Sheryl Silberg, who directed the Canadian operations in Toronto, will move to New York City in February.

Plans for 1996: This year, DPS will make a major effort to get retailers to tie in to De Beers’ major brand campaigns, such as the diamond anniversary band and 25th anniversary diamond. “We’re also encouraging retailers to tie in to our Shadows campaigns by using the music and images,” says Haag.

JWT plans to make full use of all the familiar slogans and terms – including “A Diamond is Forever,” diamond anniversary band and diamond engagement ring – although N.W. Ayer has applied for copyrights for them, says Joan Parker, who heads the Diamond Information Center. De Beers executives say they don’t believe an ad agency can copyright slogans and terms it creates for clients.

DPS will continue teaming up with the Gemological Institute of America for diamond sales training seminars. The seminars, begun late last year, have been “very, very effective in getting across the product knowledge needed to sell diamonds,” says Haag. DPS also will add a data base charting sales trends and other information. “This will give us a much better focus on the U.S. jewelry market,” he says.

The DIC also plans to work more closely with the entertainment industry to boost visibility for diamond jewelry, says Joan Parker.

– Russell Shor

LARRY POLLOCK RESIGNS AS ZALE CORP. PRESIDENT

Larry Pollock, 48, resigned Jan. 15 as president and chief operating officer of Zale Corp., posts he had held since Jan. 10, 1994. (He previously was president of Karten’s Jewelers, a leading New England chain which Zale plans to buy, and before that president and COO of J.B. Robinson Jewelers, Cleveland.)

Pollock oversaw daily operations of Zale’s four retail divisions, plus corporate merchandising and real estate. However, all are now led by strong, hands-on executives – one result of his and chairman Robert J. DiNicola’s efforts to rebuild Zale since it exited bankruptcy reorganization – and much of Pollock’s original role had diminished.

Pollock also wants to spend more time with his family (including two teenage children and a baby on the way). He is returning to Cleveland, Ohio, his hometown, where he co-owns two leading radio stations. He says he has no plans to return to retailing.

Robert J. DiNicola, 48, chairman and chief executive of Zale, assumed Pollock’s posts; the division chiefs report directly to him.

In other news, Zale’s deal to buy Karten’s was expected to close in January. The New Bedford, Mass., firm has 20 stores in Massachusetts, Connecticut, Rhode Island and New Hampshire. Though details weren’t available at press time, Karten’s was expected to join the Zales Jewelers division.

JCK AND IDP MERGE

JCK Publisher Charles Bond; Eli Izhakoff, president of the Diamond Dealers Club in New York City; and Isaac Arikha, publisher and managing director of International Diamond Publications Ltd. of Ramat Gan, Israel, officially announced the merger between JCK and IDP at a mid-December reception at the DDC. The acquisition had been announced earlier at ceremonies in London and Israel (see December 1995 JCK, p. 14). IDP publishes New York Diamonds, Miami Diamonds, Israel Diamonds, World Diamond Review and Tokyo Jeweller, and plans to launch Russia Diamonds this year.