DE BEERS DENIES RUMORS OF TWO-TIER MARKET
De Beers has publicly acknowledged that it lowered prices on certain types of low-quality diamonds for the first time ever in August. But a senior executive at De Beers insists there’s no move to abandon cheaper diamonds to the free market.
Ever since De Beers announced it had “readjusted” prices of some low-quality diamonds downward by 11%, rumors have circulated in diamond centers that the cartel plans to establish a two-tiered market for gem diamonds. One tier would focus on better-quality stones and would have support from De Beers; the other would comprise low-quality stones that De Beers would allow to float with market conditions.
De Beers Director Tim Capon says there’s “absolutely no plan” to adopt such an arrangement. A two-tiered system would be unworkable, he says, because the rough diamond grading and pricing structure is too varied and complex to establish a boundary. “The price ranges for our rough is a continuum from the bottom to the top; you can’t set one category adrift from the others,” he says. “There’s no clear-cut place to draw the line.”
Additionally, De Beers uses the same price list to buy goods from producers as well as to sell to clients. “So invariably we must sell our goods at a price that is directly related to [and a percentage above] our buying price,” Capon says.
How it happened: De Beers lowered the prices of cheaper material after many months of watching the market and after negotiations with the producers most affected by the move &endash; namely Argyle in Australia and, to a lesser extent, Russia.
“We take a long, hard look at market conditions and change our prices only after we are certain they are realistic,” says Capon. “In July, we found an oversupply of goods in the bottom range and an undersupply of goods at the top. So we realigned things to widen the differential &endash; pushing the bottom down a bit and the top up a bit.”
While De Beers insists the reduction was confined to the bottom of the spectrum, the Australian press quoted some Argyle officials as saying the decreases were much broader, affecting goods up to 2 carats.
Broker Mark Boston, director of H. Goldie & Co., which represents a number of Indian clients, doesn’t dispute the Argyle assertion. But he stresses that decreases on rough larger than 11 points were made selectively, with only a very few categories affected. “Of course the major adjustments fell on the goods below 11 points because, let’s face it, this is where Russia had been the major seller and it established a new floor price for them.”
Reaction: The reaction to De Beers’ first-ever announced price decrease was heard quickly round the world. Analysts jumped on the revelation to speculate that De Beers was abandoning its support of the diamond market &endash; at least in part &endash; and that it was mounting a power play against Argyle and the Russians, with whom it is negotiating new sales contracts.
Capon counters that the trade has reacted favorably because smaller diamonds are now priced more realistically. “We haven’t seen any loss of confidence in the diamond market or ripples from the trade or consumers,” he says.
Actually, dealers say the lower prices will never make it to the consumer market. First, prices of finished jewelry with diamonds from the lowest end of the spectrum reflect manufacturing and mounting costs more than the stones themselves. Second, dealers may now break even or make a profit on these goods after several years of losses.
Nikki Mehta of Occidental Gems of New York, N.Y., a major importer of Indian diamonds, agrees the price decrease will help manufacturers in Bombay earn a profit after several years of break-even or losing operations.
But there’s still an oversupply of small diamonds in India and an excess of production capacity from companies wanting to keep their workers busy and factories open. “What we’re seeing is a continued influx of cheaper promotional-quality diamonds while many of the medium-sized retail chains are moving up to better qualities,” says Mehta.
In response to this oversupply and the approaching long Diwali (New Year) hiatus, De Beers “drastically reduced” the quotas of Indian goods at the September sight allocations, says Boston.
Diamond dealers won’t find much relief from the other end of the pipeline, either. Aggressive price competition and ever-lengthening memo terms keep pushing down prices. &endash; by RussellShor
AYER FILES TRADEMARK FOR DIAMOND IS FOREVER
N.W. Ayer, the advertising agency that created the slogan “A Diamond Is Forever,” has applied to register those words and other familiar diamond marketing phrases as trademarks.
Derek Palmer, De Beers’ market controller for North America, believes the move is a “routine matter” connected with moving the company’s diamond advertising account from Ayer to J. Walter Thompson (see “De Beers sees opportunity in switch to JWT agency,” JCK, October 1995, p. 14). “At this point we have no reason to believe it’s anything but a tidying-up process to make the transition as seamless as possible,” he says.
Neither Ayer’s attorney nor Barry Nemmers, the attorney who filed the registrations, returned telephone calls at press time. However, the action did create speculation that Ayer might want to retain ownership of the slogans and terms after JWT takes over the account Jan. 1. The slogans and terms identified in the registration include “A Diamond is Forever,” “The 4C’s,” “Diamond Promotion Service,” “Diamond Information Center,” “Diamond Anniversary Band,” “Diamond Engagement Ring” and names of various diamond jewelry collections.
Palmer doesn’t believe Ayer or any other ad agency can retain ownership of trademarks and slogans created for clients. “Advertising agencies are always developing these for clients, and clients do switch agencies quite often,” he says.
Observers say they were surprised over how acrimonious the De Beers-Ayer relationship became after De Beers announced it would switch its account to JWT after 57 years. And though Ayer’s contract runs out Jan. 1, virtually all of the key people in the Diamond Information Center and Diamond Promotion Service had already moved to JWT by mid-October.
SIR PHILIP OPPENHEIMER OF DE BEERS DEAD AT 83
Sir Philip Oppenheimer, chairman of De Beers’ Diamond Trading Company and a director of De Beers, died suddenly Oct. 8. He was 83.
Oppenheimer, a first cousin to former De Beers Chairman Harry Oppenheimer, had been a key figure in building and maintaining De Beers as the foremost power in the world diamond industry over the past 60 years.
De Beers officials praised him for his negotiating acumen. It was critical during the 1950s and 1960s when new diamond deposits were found in countries often hostile to the West or De Beers.
Philip Oppenheimer was born Oct. 29, 1911. He studied law and history at Jesus College, Cambridge, before going to work for his father Otto, then head of De Beers’ marketing operations in London.
The post was important because Philip’s uncle, Sir Ernest Oppenheimer, was building the marketing section into the Central Selling Organisation, responsible not only for selling rough diamonds but also for negotiating and maintaining contracts with diamond producers not owned by De Beers. Today, these account for the vast majority of CSO sales.
When war broke out in 1939, Philip enlisted in the Royal Artillery and later received an officers’ commission. By war’s end, he was a lieutenant colonel and had received the Dutch Bronze Cross for his role in helping combined allied operations in Sicily.
Returning to the CSO, he took over active management when his father died in 1948. He was named chairman in 1956 and remained active in CSO management until the day of his death.
Queen Elizabeth knighted Sir Philip in 1970 for his role in furthering England’s presence in world markets. Seven years later, King Leopold of Belgium bestowed the Commandeur de l’Ordre de Leopold upon him.
Horse racing was his main interest outside the diamond world; he spent much of his time at a horse farm he bought in the mid-1960s. Oppenheimer persuaded De Beers to sponsor a major race, The King George VI and Queen Elizabeth Diamond Stakes at Ascot. He made his last public appearance at that race in July, walking to the winners’ circle with the queen to award one of British racing’s most coveted prizes to the victorious jockey.
He is survived by his widow Pamela; son Anthony, also a De Beers director; and daughter Valerie.
U.S. BUREAU OF MINES FALLS TO BUDGET AX
The U.S. Bureau of Mines, which has published authoritative reports on precious metals, gemstones and other mining production, has fallen victim to the congressional budget ax.
Congress voted this fall to close the 85-year-old bureau effective Jan. 3, though some of its activities will be transferred to other departments. The bureau’s health and safety research will be transferred to the U.S. Geological Survey department, its minerals assessments will be transferred to the U.S. Bureau of Land Management and its environmental remediation (land reclamation) programs will end. About 1,100 jobs will be lost.
Gordon Austin, the minerals specialist who compiled the gemstone reports for nearly a decade, says he hopes they will be continued under USGS. Austin plans to move to Tucson, Ariz., to work as a consultant to the gemstone industry.
The announcement of the pending closing touched off a rare demonstration of support for a government agency in the world mining community. “It’s tragic that an organization with such a long and illustrious history and one that has been so beneficial to the U.S. &endash; and worldwide &endash; should be destroyed for short-term budgetary reasons,” says Philip Crowson, chief economist at RTZ of Great Britain, the world’s largest mining company, in the Financial Times of London. “Once an organization like this is closed, it is difficult, if not impossible, to re-create it…the U.S. will live to regret this action.”
Mining Journal, an international trade publication, is even more blunt: “The bureau is at the vanguard of the world’s mining research establishments, and if it is dismantled or dispersed, we will all be the poorer. Although established to help the U.S. solve its own problems, the bureau has benefited us all.”
The Mining Journal says the bureau helped the U.S. to “balance its voracious appetite for minerals and the need to protect the environment from some of the more pernicious side effects of mining and fabricating metals.
“If it had not already been invented, the U.S. government should surely now be considering establishment of an agency to help reduce the cost of meeting the country’s need for minerals.”
One of the bureau’s last projects is a book Austin wrote about American gemstones. The book went on sale at the end of October and is available by calling the bureau at (202) 501-9388.
ARGYLE CUTS PRODUCTION OF VERY SMALL DIAMONDS
Partners in the Argyle mine in Australia anticipate a 15% drop in production based on their recent decision to stop recovering diamonds smaller than 1.5mm. These are the diamonds most affected by a price reduction imposed by De Beers’ Central Selling Organisation, which markets Argyle’s diamonds (see JCK, August 1995, p. 18).
However, the value of Argyle’s production may increase about 10% because elimination of the smaller diamonds will increase recovery-plant capacity by about 1 million tons yearly. This will allow more rapid recovery of larger stones. This is “an important step in the continuing process of improving Argyle’s competitiveness in the international diamond industry,” says John Robinson, chief executive of Ashton Mining, one of Argyle’s senior partners.
The diamonds that will be left in the slag heap are smaller than 7 points and would polish out to 1-3 points. This size has been in oversupply for several years; Argyle produces about 6 million carats of them yearly, and Russia also has sold a substantial number of them onto world markets. Demand hasn’t kept up with this supply, so the CSO reduced its prices on these goods as much as 11%.
The lower prices and production don’t threaten Argyle’s viability, say mine executives. But they have hit the mine’s bottom line and may prompt executives to rethink their diamond marketing contract with the CSO. That contract expires next year.
Isi Horowitz of IDH Diamonds, a leading Antwerp diamond dealer, says Argyle could earn just as much without these very small goods. He says their overwhelming number diminishes the perceived value of the rest of Argyle’s production.
Some analysts speculate that writing off these goods could force the mine to cancel plans for a costly underground expansion within the next five years. A decision on the expansion is pending, but Mike Mitchell, the mine’s general manager, did say these diamonds “do not represent a very important financial component of Argyle’s production.”
Analysts also believe the move could boost market confidence by bringing supply and demand closer together. But they caution that significant oversupplies of some larger, lower qualities remain in world diamond centers.
CAILLE LEAVES CJA
Hugh M. Caille, executive vice president of the California Jewelers Association, has resigned effective Nov. 15 to pursue personal interests.
Caille joined CJA in 1984, succeeded Robert B. Westover as executive director in 1989 and was elected executive vice president in 1993. Before joining CJA, he was employed in the travel and tourism industry.
“We wish Hugh well in his future endeavors,” says CJA President John Spadea. “We thank him for his service to the CJA and are sorry to see him leave. But this gives us an excellent opportunity to restructure and reorganize the CJA and the Pacific Jewelry Show [which CJA sponsors].
“The jewelry industry has changed greatly during the past few years, and perhaps we haven’t kept up quite as much as we should have. Many changes are on the horizon.” Among the changes, PJS will return to the Century Plaza Hotel in 1996 after four years in the San Diego Convention Center and two years in the Los Angeles Convention Center. Attendance at the summer show has dwindled since leaving the Century Plaza.
CJA used to sponsor a spring show in San Francisco, but it sold that show to Blenheim Group USA early this year. Blenheim will merge the show with its JA Las Vegas! show in January 1996.
Another CJA concern is dwindling membership, a trend of many western associations since the recession of the early 1990s drove many jewelry stores into mergers or closings.
A search committee has been formed to identify a successor to Caille, with Leonard Friedman, CJA president-elect, serving as chairman.
AGS NAMES YANTZER TO HEAD NEW GEM LAB
The American Gem Society has named Peter Yantzer to head its new gemology lab. The lab will open in January or February at AGS headquarters in Las Vegas, Nev.
Yantzer worked as a staff gemologist and instructor at the Gemological Institute of America for four years and served as director of GIA’s Gem Trade Lab in Southern California for five years. He then left GIA to operate his own contracting business, specializing in air conditioning and water and fire damage repair.
The AGS lab will issue diamond grading reports for member retailers and registered suppliers. It will be staffed by four people &endash; a manager, a senior grader and two graders &endash; and will be able to process 200 diamonds weekly. The lab reports will grade a diamond’s cut as well as color and clarity. Turnaround is expected to be five working days or fewer.
When AGSExecutive Director Thomas Dorman announced plans for the lab earlier this year, he said it would keep a strict policy of neutrality to ensure there is no favoritism in grading. Accordingly, financing was set up so lab directors never learn the identity of the major investors. The lab’s board will have 13 members, seven of them AGS members and six from other sectors of the industry.
All lab policies and grading decisions will be controlled by a gemological committee of nine members, five from the AGS, one from the appraisal sector, two diamond manufacturers and one from the Diamond Dealers Club.
REEDS AGREES TO BUY SHARES OF MELART
Reeds Jewelers Inc., Wilmington, N.C., announced it has signed an agreement to buy all common stock of Melart Jewelers, Silver Spring, Md., for an undisclosed amount.
Reeds operates 80 stores in regional malls in 11 states, mostly in the Southeast. Melart operates 18 stores under the Melart name in the Washington/Baltimore metroplex and one outlet called the Jewelry Vault in Potomac Mills, Md. The acquisition will allow Reeds to expand into the nation’s fourth-largest retail market.
Reeds had sales of $77.5 million in the fiscal year ended Feb. 28. Melart had sales of $17.5 million for the fiscal year ended June 30.
Alan Zimmer, president of Reeds Jewelers, was unavailable to comment at press time.
CONSUMER SPENDING & CHRISTMAS SALES
Retailers, take heart. This could be a good Christmas if stronger-than-expected consumer spending continues into the fourth quarter.
Economists were encouraged by several recent reports from retailers and the government. In fact, many raised their estimate of third-quarter economic growth from an annual rate of 1.3% (the same anemic rate as in the second quarter) to 2.5%. That’s significant because consumer spending comprises two-thirds of all economic activity.
At press time, sales figures were available only for the first month of the third quarter, but they totaled $1.2 billion for jewelry stores, up 6% from the previous July.
JCK SETS NEW DATES FOR ORLANDO SHOW
After discussions with potential exhibitors and buyers and debate by the magazine’s own show planning staff, JCK has decided to make its new Orlando show a three-day rather than a four-day event. The show will be held in the Orlando Convention Center from Sunday, Feb. 16, through Tuesday, Feb. 18, 1997. The show will be preceded by a full day of seminars on Feb. 15.
“The decision to shorten the show by one day reflects the reality that spring shows are used primarily by major buyers planning programs and catalogs,” says Charles M. Bond, JCK publisher and show director. “Most independents use these events for fill-in buying. We feel that buyers will be able to fulfill all their needs in three days.”
Holding down costs for exhibitors and buyers is another factor in the decision, says Bond.
JCK’s prime show will continue to be in Las Vegas in late May or early June. The 1996 show starts on Friday, May 31, and runs through Tuesday, June 4. The conference program starts on Wednesday, May 29. The 1996 show will be one day longer than usual to give buyers more time to shop. The number of booths was expanded sharply this year: to 3,600 booths used by 2,200 exhibitors. The Orlando show will have only about 1,600 booths.
Dates for the 1998 and 1999 Orlando shows are now being firmed up and will be announced shortly. “We know people like to plan their show commitments well ahead of time,” says Bond. “We expect to have all the calendar dates for both our shows very soon.”
GRANTHAM TO KEYNOTE JCK LAS VEGAS PROGRAM
Michael A. Grantham, who retired from the De Beers organization in October, will be the keynote speaker at the JCK International Jewelry Show in Las Vegas next year. His address is scheduled for Friday, May 31, the opening day of the show. It will focus on the state of the world diamond market and its future.
Until his retirement, Grantham was a director of De Beers’ Central Selling Organisation and the Diamond Trading Co. He had been deeply involved in the diamond business with De Beers since 1956 and had worked in West Africa and South Africa, though he spent most of his time in De Beers’ London offices.
Much of Grantham’s recent work was in marketing with the international trade on behalf of the CSO. This work took him to all the world’s diamond centers, other than New York City, on many occasions.
SWEET TO BUY ARMBRUST’S KARAT GOLD DIVISION
Howard H. Sweet & Son of Attleboro, Mass., a subsidiary of Tiffany & Co., announced it will acquire the karat gold division of the Armbrust Chain Co. of Providence, R.I., effective Dec. 4.
The acquisition will add more than 50 new chain styles to the Sweet line and will include key manufacturing technology to enhance the entire line, including precious metal chain, beads and findings.
Both companies are developing ways to ensure steady production through the transition as manufacturing equipment from Armbrust is moved to the Sweet facility.
FUCHS, EXECUTIVE DIRECTOR OF NYSJA, RESIGNS
Emanuel Fuchs, executive director of the New York State Jewelers Association for the past dozen years, will leave the post Jan. 1.
Fuchs declines to discuss his plans for the future or the reasons for his resignation, though he doesn’t call it retirement. “I will have time later to plan my future,” he says. “For now I’m looking forward to taking it easy and spending time with my family.”
He wants to keep his options open, but hopes to remain associated with the jewelry industry. “This has been a most rewarding career; I am very fortunate to be in an industry that deals in beauty and whose members are generous, ethical and moral beyond any average industry.”
Fuchs was named executive director in 1983 after serving as chairman of the association’s political action committee and its task force. He formerly was a retail jeweler and president of the Consolidated Retail Jewelers (then the New York City branch of the association).
Philip Silverstein, then president of NYSJA, picked Fuchs as executive director to help oversee a financial and structural reorganization that rescued an association troubled at the time with dwindling revenue and membership.
The leadership quickly doubled membership by developing benefits ranging from major medical and jewelers block insurance programs to group rates on credit cards and group disability income protection. Since then, the association has revamped its annual convention to include keynote speakers and seminars on critical topics such as crime, sales training and gemstone treatments. NYSJA also offers one-day seminars on numerous topics, presents more than 100 scholarships annually, honors members with Jeweler of the Year and Salesman of the Year awards and presents special awards to industry leaders. Under Fuchs’ tenure, the association has continued to add member benefits, including retirement-, estate- and succession-planning programs.
H. STEPPENJAY FALLS UNDER CHAPTER 7 BANKRUPTCY
Apetition for relief under Chapter 7 of the U.S. Bankruptcy Act has been filed for H.Steppenjay of New Hyde Park, N.Y. Under Chapter 7, debtors sell assets in return for the discharge of debts.
The company’s signature jewelry line, designed by Tina Segal, is now available through Kurt Gaum Inc., New York, N.Y. Segal is working with Kurt Gaum on public relations.
Segal is the principal of her own new design company called Segal Design Inc., 12A Clinton Ave., Dobbs Ferry, N.Y. 10522; (914) 693-7700. The company continues to produce the popular Corduroy Collection of fine gold and silver jewelry.
ANTWERP BOURSE OFFICIAL BLASTS REPORT ABOUT MAFIA
The president of the Antwerp Diamond Bourse has sharply denied a report in the international edition of Newsweek magazine that alleges a connection between the Belgian diamond trade and the Russian mafia.
“We strongly object to this highly incorrect and false view of our business and insist on a right to respond,” President Bram Fischler wrote in a letter to Newsweek Editor in Chief Richard M. Smith.
The Oct. 6 report says that since the breakup of the Soviet Union, the Russian mafia has grown significantly and has established strong networks in Antwerp, Tel Aviv, Berlin and New York City.
It describes Antwerp’s Russian- and Hebrew-speaking diamond dealers as the world’s most experienced in the art of hiding money and dodging taxes. “Business can be conducted in almost total secrecy if you happen to be Russian-speaking and Jewish,” it says.
In addition, the report says the mafia benefits from an easygoing attitude toward black-market goods and money by Antwerp’s police and port officials.
The report, written by Dorinda Elliott and Melinda Liu, doesn’t state specifically that the Russian mafia has infiltrated the legitimate diamond trade in Antwerp. But it does imply the Russian contingent of the trade and the mafia coexist and possibly cooperate.
Fischler’s rebuttal says the “Russian émigré” population is generally unknown to the Antwerp diamond community. The Russian settlements near the city’s diamond area date back only a few years, “while the diamond trade has been here for more than 100 years.”
He adds that Antwerp’s diamond clubs, which encompass the vast majority of trade members, impose strict legal and ethical requirements. “Members must obtain a certificate of good conduct from the authorities, must comply fully with all commercial laws and must prove their tax obligations are fulfilled.”
NEW PRESIDENT NAMED AT TOWN & COUNTRY DIVISION
Paul Schregel, formerly an executive with Scott Paper Co., has been named president of the Town & Country Fine Jewelry Group, a wholly owned subsidiary of Town & Country Corp., Chelsea, Mass.
Schregel’s appointment resulted from a search prompted by the 1992 resignation of Basil Haymann, the first chief of the subsidiary, says Irene Shea, manager of corporate communications. William Carey, the company’s chief executive officer, oversaw the subsidiary in the interim.
The Town & Country Fine Jewelry Group was created in 1992 with the merger of two former subsidiaries, Feature Enterprises of New York City and Verilyte Gold of Dallas, Tex.
JCK PUBLISHES 2ND EDITION OF MANAGEMENT MANUAL
Jewelers’ Circular-Keystone announces the publication of the second edition of its Handbook of Jewelry Store Management. The manual is designed to assist jewelers with the day-to-day operation of their stores. It covers the full range of store operations in 12 chapters: “The Store,” “Training,” “Personnel,” “Management Arts,” “Money Management,” “Inventory Management,” “Sales Promotion,” “Marketing,” “Laws &Regulations,” “Security &Insurance,” “Computers” and “Your Business Plan.”
The 528-page text is drawn from the pages of JCK. All articles in the Handbook originally appeared in the magazine’s regular issues &endash; generally between 1988 and 1995. However, some especially informative (and relevant) articles from the previous edition also appear in the new one.
The book is prepared in hard-cover format and is organized clearly for easy reference. It will be available in January 1996 through JCK’s Data Center, One Chilton Way, Radnor, Pa. 19089.
NATIONAL FINDINGS CLOSES DOORS
National Findings, Miami, Fla., has vacated its headquarters and is in a liquidation process, according to trade reports. A receptionist at headquarters confirmed the company is no longer in business.
The company left outstanding obligations, but the extent has not been itemized or confirmed. President Bernard Goldberg was not available for comment.
The company, which employed 45, was incorporated in 1975.
NATIONAL CONFERENCE TO HONOR BARLERIN, LAZARUS
The Jewelry Division of the National Conference will hold its annual dinner at the Hotel Pierre in New York City on Tuesday, Dec. 5. Mort Weisenfeld, honorary president of the Jewelry Division, and Dinner Chairman Terry D’Elia, president of B. D’Elia & Sons, note that Michael Barlerin, chief executive officer of the Americas for the World Gold Council, and James Lazarus, president of L&R Manufacturing, will be honored for their commitment to the industry and to community and humanitarian causes.
The National Conference, founded in 1927 as the National Conference of Christians and Jews, is a human relations organization dedicated to fighting bias, bigotry and racism in America.
For information and reservations, call Zita Dorn at (212) 807-8440.
A caption on page 15 of the October issue of JCK listed an incorrect telephone number to call for information about Mint TimeTM wrist and pocket watches marking the 200th anniversary of the U.S. Mint. The correct number is (202) 874-6400.
LAMPERT MARKS 75TH YEAR WITH MUSEUM DISPLAY
As part of its 75th anniversary celebration, Lester Lampert of Chicago will display a commemorative collection of its designs this month in The Field Museum’s Grainger Hall of Gems. The Nov. 22-30 exhibit will feature custom jewelry created by four generations of Lampert family designers.
One highlight of the company’s history is an 18k gold paperweight it designed and created as the City of Chicago’s official gift to Pope John Paul II during his visit in 1979; the piece now is displayed in the Vatican Museum. Another highlight: the Chicago Sun-Times commissioned Lampert to design diamond earrings and a necklace as its retirement gift to Eppie Lederer (“Ann Landers”).
The Lampert family will host a celebration at The Field Museum on Saturday, Nov. 25. David Yurman, Manuelo Carrera, Alain Silberstein and Henry Grossbard will be on hand with their designs. Also on display will be 300 original pieces belonging to Lampert customers.
RUSSIAN OFFICIALS SEEK FINANCIAL HELP FOR MINES
Russia is seeking a substantial investment to improve mining operations as part of a deal for a new diamond marketing contract with De Beers’ Central Selling Organisation, according to a diamond consultant report.
Russian officials would like an infusion of $500 million to $1 billion to fund various mining programs, according to Diamantaire, published by CRU International of England.
In the past, De Beers executives have said they would consider a request to redevelop Russia’s diamond mines only in exchange for some form of partnership or equity in them.
Almazi-Rossii-Sakha, the agency controlling Russian diamond mining operations, has said repeatedly &endash; at least in public &endash; that it neither wants nor needs De Beers’ help with technical and environmental problems at its mines.
However, the CRU report says Russian officials and executives of De Beers and an associate company, Anglo American Corp., have discussed “a program of investment in diamond and gold mining” in Russia.
“If De Beers is to accept the Russian linkage between renewal of the diamond sales contract and a major mining investment,” says the report, “it will want to be in a position to regulate the supply of new Russian diamonds coming on to the market.” In other words, under a new marketing agreement, De Beers would require Russia to stop selling rough diamonds outside of the CSO. Thus far, says the report, Russia’s only concession is a two-year extension of the current contract.
The report predicts De Beers and Russian officials will sign a new agreement before the year-end “for the sake of market stability.” But the report also suggests it may contain too many loopholes to be of much value as a binding agreement.
DURWARD HOWES DIES
Durward Howes III, a third-generation jeweler, died Sept. 27 at the age of 72.
Howes’ grandfather founded B.D. Howes & Son in Los Angeles, Cal., in 1919. The company eventually grew to 10 stores in California, Arizona and Hawaii. Howes joined the family business in 1945 after service in the U.S. Navy during World War II. He became president in 1953, a post he held until the firm closed in the mid-1980s.
Howes was president of the California Jewelers Association in 1952-’53 and of the Retail Jewelers of America (now JA) in 1963-’65. He also served as chairman of the Jewelry Industry Council and a director of the American Gem Society and the Jewelers Vigilance Committee.
ARGYLE PINKS BRING $4.5 MILLION AT SALE
The 11th annual tender sale of pink diamonds from the Argyle mine in Australia brought $4.5 million in October. The average per-carat price topped $100,000.
The diamonds &endash; which were shown in Tokyo, Hong Kong and Geneva before the sale &endash; attracted 180 bids from 17 leading diamond dealers and jewelers. “The pink diamonds generated unprecedented levels of interest,” he says.
Seven of the 17 bidders were successful. The most sought-after of the 47 diamonds in the collection were intense purplish red, particularly a 1.05-ct. round brilliant. The largest was a 2.8-ct. purple-pink emerald cut.
Argyle produces a tiny number of pink diamonds in addition to its 40 million carat annual output. Since 1985, the company has assembled the best of the pink diamonds each year for a tender sale at the Hotel Richemond in Geneva, Switzerland.
AMFAR RECEIVES $487,000 FROM JEWELRY INDUSTRY
AmFAR, the American Foundation for AIDS Research, recently announced it has received a $487,000 donation from the jewelry industry to fund clinical research throughout the country.
The fund-raising effort culminated with a benefit titled “A Party with a Purpose,” sponsored by Sterling Inc. and held June 11 in Las Vegas, Nev., during the JCK International Jewelry Show. This is the third year the charity event has donated proceeds to AmFAR. So far, the foundation has received $1.8 million from the jewelry industry.
Since 1985, AmFAR has awarded more than $79 million in grants to more than 1,600 research teams for basic biomedical and clinical research, AIDS prevention education and AIDS-related public policy.
GIA GEMFEST EUROPE PLANS RETAIL SUMMIT IN BASEL
The GIAGemFest Europe plans to host what it calls a world jewelry summit in Basel, Switzerland, on April 20, during Basel ’96 &endash; World Watch, Clock and Jewellery Show. Called Jewelry Retailing in the 21st Century, it will focus on the retail sector. Guest speakers reportedly will include a number of internationally known jewelry retailers and key industry personalities.
GemFest Europe, organized by the GIA European Alumni Association, debuted three years ago. It traditionally has been held during the Vicenza trade fair in Italy.
For information, contact Guido Giovannini-Torelli, the summit coordinator, in NewYork City at (212) 570-4180, fax (212) 772-1286, or Federico Stocco, director of GIAEurope, in Vicenza at (39-444) 964-250, fax (39-444) 964-240.