De Beers has signed a new diamond mining and marketing agreement with Namibia that company officials call a “ringing endorsement of the single-channel marketing” system that will bolster the confidence of the world diamond trade.

The agreement keeps Namibia’s very-high-quality diamond production firmly in De Beers’ control but, in exchange, turns over half of the mining operations to the Namibian government.

Both sides achieved their most important goals, says Abel Gower, executive director of Namdeb Diamond Corp., a new corporation jointly owned by De Beers and the Namibian government. Under the 25-year accord, De Beers received the right to continue marketing 100% of the country’s diamonds. Namibia won joint management of its diamond resources and a commitment to build up local employment.

Though De Beers ceded half the operation to the government without compensation, Gower says the cartel made no real financial sacrifices. “Previously, the government took about two-thirds of mine profits in taxes,” he says. “Under the new structure, the government will participate in management through the board of directors, but profits will remain roughly similar to before.” Namibia produces about $300 million worth of top-quality diamonds yearly.

Some analysts described the arrangement as partial nationalization of the mining operation. Gower disagrees. “We offered them the deal,” he says, adding that the government partnership is necessary to control theft and to maintain peaceful labor relations. “The labor unions are big supporters of the government,” he says.

The partnership is comparable to one between De Beers and neighboring Botswana. But Gower doesn’t believe it will be a model for any future agreement with neighboring South Africa. “This type of arrangement is designed for nations where diamond production is the predominant force in their economy,” he says. “That’s not the case in South Africa.”

The specifics: The agreement, signed Nov. 24 in capital city Windhoek, continues the policy of selling Namibia’s entire diamond production through De Beers’ Central Selling Organisation. The sales agreement is subject to review every five years.

De Beers is allowed to keep all of its existing mining and prospecting licenses. Prospecting licenses will be renewed every three years. (Debmarine, a De Beers subsidiary that mines and prospects for diamonds off the coast of Namibia and South Africa, is not part of the accord.)

In addition, De Beers and Namdeb pledged to recruit, train and hire local citizens with the goal of eventually creating a fully autonomous Namibian management. They also agreed to use local suppliers of goods and services where possible and to study the possibility of setting up a diamond polishing factory in Namibia.

Gower says the only problem would occur if the government pushes to “Namibianize” operations before people are sufficiently trained to become managers.

Confidence factor: Many in the diamond trade see the agreement as a victory for De Beers at a time of lagging confidence in the cartel’s ability to control the world diamond market. It is valuable to De Beers because:

  • It keeps high-quality diamonds from the West African coast firmly within De Beers’ control. Namibia’s production is the world’s fourth highest by value and by far the most valuable per carat (95% of Namibia’s diamonds are gem quality). In addition, Namibia is crucial to De Beers’ long-range plans because some surveys indicate large quantities of similar quality diamonds await miners in the seabeds just off the Namibian coast.

  • It demonstrates the confidence that Namibian officials have in De Beers’ ability to provide the best overall return for their diamonds.

Less than a decade ago, the leaders of Namibia’s current government were fighting a guerrilla war against South Africa’s occupation of their country under the banner of the Southwest African Peoples Organization. SWAPO called repeatedly for the ouster of all South African institutions (De Beers’ associate company Anglo American Corp. is headquartered in South Africa) and engaged in armed warfare against South African troops stationed in the northern areas of the country.

Before the country won independence in 1990, SWAPO reconstituted itself into a political party and swept the United Nations-mandated elections. For two years, the new government studied all arrangements that previous governments had made with mineral companies and then began negotiations for new agreements.

In Tanzania: Elsewhere, a De Beers subsidiary announced it will increase ownership of Williamson Diamonds of Tanzania from 50% to 75%. Williamson’s Mwadui Mine, once a very large diamond producer, is nearing the end of its life. But De Beers technicians plan to launch an $8 million project to extend the mine’s life and upgrade its recovery facilities. The mine produced about 80,000 carats last year, about two-thirds of that gem quality.

De Beers signed a diamond prospecting and mining agreement with the Tanzanian government in 1992. – by Russell Shor


Harry Oppenheimer retired from the board of De Beers Consolidated Mines Ltd. Dec. 27, 60 years to the day after he joined it. Oppenheimer said goodbye with a promise that De Beers and the diamond industry will surmount their problems and a faith that the new South Africa will continue a peaceful journey to democracy.

Oppenheimer, 86, spoke at a retirement ceremony at De Beers headquarters in Kimberley, South Africa. “I keep reading about how the diamond trade and De Beers will be destroyed, perhaps by the Russians [selling diamonds outside of De Beers] or by new [diamond] discoveries in Canada …Nothing of the sort is going to happen,” he said. “Demand for diamonds is stronger and more firmly established than it has ever been [and] producers realize that cooperation is in the best interests of them all.” De Beers’ management and expertise remain “fully capable” of guiding the company through the current problems, he added.

Oppenheimer’s father, Sir Ernest Oppenheimer, became chairman of De Beers in 1931 and named Harry to the board three years later. After his father died, Harry assumed the chairmanship in 1957, and held the post until 1984. He had retained his seat on the board since then, taking an active part in decisions affecting the company.

De Beers Chairman Julian Ogilvie Thompson praised Oppenheimer for his efforts “to change positively the beliefs and attitudes of South Africans – particularly but not exclusively whites.

“It must have given you profound satisfaction to see South Africa now becoming the kind of society you spoke up for and fought for so long.”


Supermodel Cindy Crawford has collaborated with Kay Jewelers to launch the Cindy Crawford Collection of classic jewelry with a flair. Crawford, who also is host of MTV’s “House of Style” program, has been the jewelry fashion spokesperson for Kay Jewelers since 1993.

The collection is designed for active women seeking understated, elegant jewelry at an affordable price, says the company. It comprises 14k rings, earrings and pendants with diamonds and gemstones such as ruby, emerald, sapphire, amethyst, blue topaz, peridot and rhodolite garnet. Retail prices range from $150 to $900.

“I didn’t want to do something that was so exclusively priced that no one could afford it,” says Crawford. “I really wanted jewelry that was accessible to everyone – my friends, my mother, my sisters.”

Crawford, who says the jewelry is consistent with her image, worked with the Kay design team, communicating her sense of personal style. Ergonomics and versatility were crucial. “What it came back to was classic pieces – the fashion basics,” she says. “I wanted jewelry that you could put on Monday morning and not have to take off for two weeks. Pieces that literally go with everything from a white shirt and jeans to a simple black dress.”

The collection is packaged in gunmetal gray bags bearing the collection logo of Crawford’s handwritten signature, inner tissue stamped with the signature “C” and gray ribbon. All jewelry in the collection is stamped with a double signature “C.”

Kay Jewelers has nearly 400 stores in 31 states across the U.S. It’s owned and operated by Sterling Inc., Akron, Ohio, a subsidiary of the Signet Group PLC of Great Britain.


The issue of truth in jewelry advertising got a boost from a federal court in Illinois. The action came when the U.S. District Court for the Northern District of Illinois, Western Division, denied a motion by Finlay Fine Jewelry Corp. to dismiss an action by B. Sanfield Inc., a Rockford, Ill., jeweler.

Finlay operates jewelry departments in two Bergner’s department stores in Rockford, and Sanfield has charged that for some three years before it filed its complaint, the stores’ jewelry price-off ads were misleading. The jeweler alleges that newspaper advertisements, promotional mailings and store signs repeatedly offered merchandise at 50% off regular prices, but that the items in question never were offered at the “regular” price for any substantial period of time.

Finlay asked for dismissal of the complaint on various grounds, including the argument that the federal Lanham Act invoked by Sanfield’s attorneys does not cover advertisements of price information.

The court rejected each of Finlay’s arguments and ruled that if Sanfield chose to do so it could continue to pursue its case. Lee Hartsfield, chief executive of B. Sanfield, said that “absolutely” his firm plans to proceed with its case. He said discovery is scheduled to take place early this year.

Hartsfield is a veteran fighter for truth in price advertising. His prime weapon is the Lanham Act which, under a 1989 revision, makes it possible for individual companies to bring action against those it believes are indulging in misrepresentation. In 1990, Sanfield brought action against Marshall Fields & Co. of Chicago and H.C. Prange Co. of Sheboygan, Wis., charging that they deceptively advertised and priced gold jewelry. That case was terminated with a court-approved agreement which was sealed by the court. None of the parties to the settlement is allowed to make any comment on the timing or terms of the settlement.

Sanfield also brought action against the J.C. Penney Co., again alleging deceptive advertising. According to Hartsfield, discovery is scheduled in that case early this year.

Hartsfield is an ardent advocate of the Lanham Act – a piece of legislation which has been widely praised and selectively used by the Jewelers Vigilance Committee, itself a major foe of deceptive pricing and advertising.


Fingerhut Cos. Inc. canceled plans for a 24-hour cable television shopping channel in November after escalating startup costs dissuaded investors. The channel was supposed to debut in December with jewelry accounting for 20% of the merchandise offered.

Costs associated with obtaining subscribers changed dramatically after the project was announced in March, says Arthur Kapplow Jr., senior vice president of merchandising for the Minneapolis, Minn., company. “In March, we could obtain subscribers by paying a percentage of sales,” he says. “By the end of the startup process, we would have had to pay the cable operator $5 to $10 per subscriber plus the percentage.”

As a result of the cancellation, the company will take a fourth-quarter after-tax charge of about $19 million.

Meanwhile, the company’s USADirect infomercial program will be reduced and brought totally in-house. USA Direct produces 30-minute infomercials to sell various items (excluding jewelry) on cable programs.

Fingerhut’s announcement came after several other major electronic retailers said they would scale back expansion plans. QVC Inc., a television shopping channel based in West Chester, Pa., decided to combine its Q2 and OnQ channels, both of which were launched last year to reach more affluent and younger viewers, respectively. Spiegel Inc.’s Catalog 1, a joint television shopping venture with Time Warner, is growing more slowly than anticipated, says The Wall Street Journal. And Macy’s plans for a shopping network have been delayed while the department store merges into the Federated Department Stores conglomerate.

In addition, recent marketing studies show the number of households that watch home shopping programs has dipped from 16% of households with cable in 1991 to 12% now, says The Journal.


Ross-Simon Jewelry and J.C. Penney are among the companies participating in Shopping2000TM, an electronic collection of consumer mail-order catalogs now available on the worldwide Internet computer network. Shopping2000TM is accessible through Internet’s World Wide Web at site number shopping2000.com.

Shopping2000TM, 160 Madison Ave., New York, N.Y. 10016; (212) 447-9494, fax (212) 447-6723.


Beryl Raff, a veteran jewelry executive for Macy’s department stores, is the new president of Zales, the 519-store division of Zale Corp., the nation’s largest jewelry retailer.

Raff, who started Nov. 21, is the first woman to head the flagship Zales division and the second woman to head one of Zale’s retail store operations. Mary Forté, a veteran retailer who worked at Macy’s and the QVC shopping network, became president of the 375-store Gordon Jewelry Corp., the second largest Zale division, in July.

Raff’s appointment completes the top management roster of Zale Corp., which exited bankruptcy reorganization in mid-1993. Chairman Robert DiNicola, President Larry Pollock and Executive Vice President John Belknap were named earlier last year. (Joe Keifer, a 23-year Zale veteran, continues as president of the upscale Guild division, and Max Brown is president of the Diamond Park leased department division.)

Raff worked for the Emporium, a West Coast department store group, before being named jewelry merchandise manager for Macy’s New Jersey division in 1983. She was promoted to manager of the fine jewelry division in 1985, group vice president for jewelry for the Macy’s South/Bullocks division in 1988 and senior vice president of Macy’s East in 1991.

Zale Corp., headquartered in Irving, Texas, operates more than 1,235 retail stores and leased departments in the U.S. Puerto Rico and Guam.


A flurry of multimillion-dollar diamond and jewelry sales added a stunning climax to the fall auction season in Geneva, Switzerland. Three world records were set:

  • The most ever paid for a pink diamond, $7.4 million. An unidentified Middle Easterner bought the 19.66-ct. stone, says François Curiel, Christie’s jewelry director.

  • The highest price ever for a Fabergé Imperial Egg, $5.6 million. The egg was created in 1913 for the Russian royal family. Gary Hansen, a St. Louis dealer, bought it at Christie’s auction on behalf of an unnamed client. “The egg drew such a huge price because it’s unique – even among the Fabergé eggs” says Hansen. “It’s made from rock crystal and has the most detailed platinum work of all of them. Also, it was probably one of the last of the Imperial Eggs that was in private hands; it’s not likely we’ll see any more come up for sale in the foreseeable future.”

  • The most ever paid for a D internally flawless diamond, $5.25 million at Sotheby’s sale.

Other highlights: Other top pieces at Christie’s included a 19.2-ct. blue diamond for which an unidentified Middle Easterner paid $6.3 million.

At Sotheby’s, Saudi dealer Ahmed Fitaihi paid $2.7 million for a diamond choker and earrings by Alexandre Reza, $2.4 million for a 34.41-ct. pear-shaped diamond and $1.4 million for a 22.3-ct. diamond. An unidentified European dealer paid just over $1 million for a 12.34-ct. ruby.

In a major disappointment for Sotheby’s, executors of a major estate withdrew 24 lots just before the auction began, says David Bennett, director of Sotheby’s European jewelry division. The withdrawn items were not factored into the percentage of unsold items.

Still, “we were very pleased with the results of the sale because there was enormous interest and international competition throughout,” says Bennett. “This resulted in the strong prices for outstanding pieces.”

When the bidding was over, Christie’s sale realized $42.3 million, with 81% of the lots selling. Sotheby’s, which has topped Christie’s in most recent sales, found itself coming up second this time with sales totaling $34.6 million and 67% of the lots selling.

Elsewhere: Christie’s also enjoyed a record-setting $9.8 million sale of rare jadeite pieces in Hong Kong this past fall.

Sammy Chow of Trio Pearls of Hong Kong paid $4.3 million for the Mdivani jade necklace, considered the largest jade bead necklace in the world with 27 beads ranging from 15.3mm to 19.2mm. The necklace, formerly the property of Woolworth heiress Barbara Hutton, has “extremely consistent and extremely pure green color throughout,” says Curiel, who conducted the sale. When last auctioned in 1988, the necklace sold for $2.2 million.

At Sotheby’s New York gallery, a private American buyer paid just over $2 million for the Judge Elbert Gary gold dinner service – the highest price ever paid for such a service. The service of 566 pieces in 18k gold weighs a total 3,929 ounces. Judge Gary, an industrialist, commissioned Tiffany & Co. to create the service in 1910 but used it only once – to entertain the Sultan of Turkey at a dinner party. The sale price far exceeded the high estimate of $1.8 million. The low estimate of $1.2 million was just above the actual gold value of the set.

– by Russell Shor


Tiffany & Co., New York, N.Y., has been ordered to pay $300,000 in discriminatory damages and $65,000 in back pay in a sexual harassment suit.

The New York State Division of Human Rights ordered the payments after Administrative Law Judge James Wilcox found that two Tiffany employees “engaged in a pattern of conduct which created an intimidating and hostile work environment” for Paula Smith, a former assistant merchandising manager of the Fifth Avenue retailer’s estate jewelry department.

Smith filed a complaint with the state in 1984, charging that Raymond Petterat, a supervisor, and Keith Hall, an assistant merchandising manager, (both now deceased) “humiliated” her with explicit remarks about her sex and her religion in 1982 and 1983. She also charged that she was fired after repeated complaints to superiors about the remarks.

The judge upheld the charges of sexual harassment but found the charges of discrimination due to creed “isolated and insufficient.”

Tiffany denies that Smith’s firing was discriminatory and says it will appeal the judge’s decision to the New York State Supreme Court. “A 10-year delay by the New York State Division of Human Rights has imposed a serious impediment to Tiffany’s ability to defend itself against these charges,” notes a company statement.

The judge counters the delay charges in his 32-page opinion, saying Tiffany failed to call other witnesses, presented no evidence showing other witnesses were unavailable and took no steps to preserve testimony from Hall or other witnesses. The judge also noted he received testimony from William Sharp, a senior vice president at Tiffany, only after requesting it.

Tiffany also is required to post the decision prominently in the workplace and to provide staff training on sexual harassment.


In what may be the Gemological Institute of America’s largest research report ever, scientists have concluded that all fracture-filled diamonds can be identified easily with the proper procedures and equipment and that the treatments are not permanent. The findings are detailed in a 35-page article in the fall issue of GIA’s Gems & Gemology magazine.

The research and report were done by Robert C. Kammerling, Shane F. McClure, Mary Johnson, John Koivula, Thomas Moses, Emmanual Fritsch and James E. Shigley. They examined 67 diamonds whose clarity was enhanced through fracture filling by three companies: Yehuda-Diascience Inc. (18 stones ranging from .31 ct. to 1.68 cts.), Koss & Shechter/ Genesis II (24 stones ranging from .02 ct. to .82 ct.) and Goldman-Oved/Clarity Enhanced Diamond House Inc. (25 stones ranging from .18 ct. to 1.91 cts).

The researchers also examined 31 Goldman-Oved-treated diamonds mounted in a tennis bracelet and sent five stones to Koss and six to Goldman-Oved for before and after testing.

Among other things, the researchers found:

  • All three companies’ processes “can effectively improve the face up appearance of some diamonds” and improve the clarity by one and sometimes two grades.

  • The Yehuda and Koss treatments lowered the color grades in some stones, while the Goldman-Oved treatment did not.

  • All of the fracture-filled diamonds examined with a standard gemological microscope with darkfield or brightfield illumination showed telltale flash effects, despite claims of some processors to the contrary. The diamonds also had “high relief areas representing incomplete filling” (trapped bubbles in the filling and/or thin unfilled areas at the surface) and cloudy filled areas of reduced transparency that appear white. Fiber-optic or other illumination techniques are needed to identify these characteristics in some mounted stones. No single gemological feature or combination of features is common to all three types of treatments examined.

  • Prolonged exposure or numerous short exposures to common cleaning methods – steam and ultrasonic – or direct heat from jewelry repairs can damage the filling. Sometimes the damage is minor, such as the removal of a small amount of filler that may appear as a fine scratch. Indirect heat, such as that used in sizing a ring, may not damage fillings.

  • Prolonged exposure to longwave ultraviolet radiation resulted in discoloration in Koss-treated diamonds (100 to 200 hours), one of two Goldman-Oved stones (200 hours) and no Yehuda stones. The findings corroborated earlier tests of Koss stones that the company had disputed.

Cautions: The GIA article cautions that filled diamonds from the three companies did not react identically to all of the durability and stability tests. “It would not be surprising if these data were selectively used to help `substantiate’ one product’s alleged superiority over another,” says the article.

Readers are advised not to draw general conclusions from the research. “The fact that one test diamond was not damaged by ultrasonic cleaning should not be misinterpreted to mean that all diamonds treated by that firm will be immune to such damage,” says the article. “Another diamond with larger filled breaks or one subjected to longer cleaning times might react differently.”

The article also cautions jewelers who take in jewelry with filled diamonds for repair to proceed “under the principle of lowest common denominator and not subject it to any cleaning or repair procedure that can damage any filled diamond.”

The article reiterates the GIA’s longstanding policy of not grading fracture filled diamonds because of “durability and stability concerns that apparent color and clarity grades can change over time.”

Continuing research: Robert Kammerling, GIA’s director of identification and research, tells JCK that GIA’s research into filled diamonds has been ongoing since a 1989 study of Yehuda-treated diamonds. The current article was begun in 1992 when GIA bought a set of Koss-treated diamonds and began to evaluate them, he says.

“The fact that new vendors came into the market and presented new identification factors triggered this study,” he says. “We have to let jewelers know what identifying factors or combination of factors to look for.”

And because the technology of filling diamonds is constantly changing, research will continue in GIA laboratories and classrooms.

The report also includes several sidebars that analyze the substances used in fracture filling.They explain the optics of the telltale “flash effect” and feature nearly 40 color photographs that show identifying characteristics of filled diamonds.

Reprints of the report – “Update on Filled Diamonds: Identification and Durability” – are $9.95 each in the U.S. and $13 elsewhere. Gems & Gemology Subscriptions Department, 1660 Stewart St., Santa Monica Cal. 90404. Orders may be faxed to (310) 453-4478.

– Russell Shor


Miller Freeman Jewelry Group, the parent of National Jeweler, announced it will launch Jewelry World, a new trade show, in early 1996. The first event will be held Jan. 30-Feb. 1, 1996, at Cashman Convention Center. Plans call for a move to the new Sahara Hotel &Conference Center in 1997.

While most industry shows center on weekends, Jewelry World will run Tuesday through Thursday. It overlaps somewhat with the AGTA GemFair in Tucson, scheduled for Jan. 31-Feb. 5, 1996, and immediately precedes the JA International Jewelry Show, to be held Feb. 3-6 in New York City.

Las Vegas already hosts the June JCKInternational Jewelry Show, started in 1992; the October Jewelers International Show, started last year; and the United Jewelers Expo, which debuted this month.


On page 179 of the November JCK, we gave the incorrect name of a wholesaler of sterling silver jewelry that opened a new showroom and office in the Metroplex Pyramid, 7310 Miramar Rd., Suite 202, San Diego, Cal. 92126; (619) 566-2332. The correct name is Blake Brothers West.

An article on machine-cut natural gemstones available from Swarogem North America Ltd. on page 50 of the November JCK contained two errors. Swarogem is known for its precision machine-cut crystal, not glass. And the tolerance for calibration is .01, not .001mm, in diameter and depth.


The opening of the Bangkok Diamond and Precious Stone Exchange Nov. 3 gave officials a stage on which to tout the importance of gems and jewelry to the nation’s economy. The exchange is located in an export zone in which traders can conduct business without paying value added tax.

Prime Minister Chuan Leekpai told the gathering of gem industry leaders from around the world the exchange will enhance the country’s already rapidly expanding jewelry industry. He also announced the government has reduced tariffs on imported rough from 15% to 1.4%. He called on the World Federation of Diamond Bourses, the governing body of all official diamond exchanges, to admit the new exchange as quickly as possible. WFDB is expected to vote on the Thai exchange’s admission at its convention in May.


Wittnauer International, New Rochelle, N.Y., has signed a 10-year agreement to market and distribute Universal Geneve in the U.S. and to create several new lines for the century-old Swiss luxury watch brand. Universal Geneve formerly was distributed here by Holzer Watch Co., New York, N.Y.

Wittnauer President Reynald Swift says the Universal Geneve brand complements Wittnauer’s recent introduction of Zodiac, a Swiss sport watch ($200-$1,800 retail) and the Wittnauer line of dress and sport watches ($100-$600). All brands feature a three-year warranty.

Wittnauer already has started to distribute some Universal Geneve watches selectively to several jewelers in major metropolitan areas. By midyear, the brand’s automatic Golden Tech and automatic/quartz Golden Shadow models ($1,400-$3,000) should be placed in about 50 stores. Higher-end models also will be made available, including new versions of the limited-edition Golden Janus, a two-faced/single movement watch that quickly sold out all 200 units last year.

Fred Santschi, chief executive officer of Universal Geneve, said Country Club, a new line of leisure and dress watches, will debut this fall. The line will feature quartz movements and will retail for less than $1,000.


The U.S. Justice Department’s long awaited industrial-diamond price-fixing case ended abruptly in early December when a federal judge in Columbus, Ohio, threw out the entire case.

The directed verdict ended the department’s 2 1/2-year probe and prosecution of General Electric on charges that it conspired with De Beers Centenary to fix prices of industrial diamonds. Both firms vehemently denied the accusations. De Beers declined to send representatives to the trial.

Judge George C. Smith said “the court finds that even when the evidence is viewed in the light most favorable to the government, no rational trier could find beyond a reasonable doubt.” He explained that the Justice Department failed to establish the alleged link between De Beers and GE. The government maintained that Phillippe Liotier of Diamant Boart SA in Belgium was a go-between for the two companies. But the judge said the government failed to offer sufficient proof that he was acting as an agent for De Beers.

The government launched its case more than two years ago after Edward Russell, a former GE executive, claimed he was fired for blowing the whistle on the alleged price-fixing arrangements. Russell sued GE, but later dropped his case and recanted his charges.

Both sides said an appeal was unlikely.

Log Out

Are you sure you want to log out?

CancelLog out