Rapaport Magazine - December 2019

VOL. 42 NO.12 DECEMBER 2019

From diamantaires to estate dealers, meet some of the professionals taking the industry into its newest chapter

THE NEXT GENERATION Cover.indd 1

R E FL ECTI ON S

RETAI LRAP

BOOK

DE S IG N E R

NOT ALL FACETS ARE WHAT THEY SEEM IN SOME STONES WITH EXCELLENT CUT GRADES

HOW JEWELERS CAN SHOWCASE THEIR ETHICAL CREDENTIALS

‘BEJEWELED’ BY KYLE RODERICK EXPLORES SUSTAINABLE LUXURY

ITALIAN MAISON BUCCELLATI CELEBRATES ITS CENTENARY

11/27/2019 5:17:38 PM

CO N T E N TS Retailers: How can modern jewelers make it worth customers’ while to shop brick-and-mortar?

Estate dealers: Tapping into technology, sustainability and personal attention to appeal to today’s clients.

34 Reflections Cutters have been sneaking in extra facets to try and “cheat” the GIA into upping their cut grades.

36 Auction report Sotheby’s Magnificent Jewels and Jadeite sale in Hong Kong: Analysis and results.

RETAIL

48 IN-DEPTH 14 News Commitment diamonds, Tiffany says “yes” to LVMH’s offer, and Martin Rapaport on the future of dealers.

COVER

COVER ILLUSTRATION: SAM KERR/DEBUT ART

18 Cover

Diamantaires: Members of the next generation visit South Africa to learn more about the industry.

Auctioneers: Four fresh faces at worldwide auction houses talk about their passion for jewelry and recall their most memorable sales.

Manufacturers: Ilan Kaplan of iSparkle explains how the midstream can maximize profits by moving away from the contract system.

Designers: Established names single out the up-and-coming brands they love.

50 48 Style Analyst Paola De Luca shares insights from The Jewellery Trendbook.

50 Designer

40 Retail profile Page

Page

Talisman Collection in California prides itself on its open environment — literally and figuratively.

Family-run Italian maison Buccellati is celebrating its 100th anniversary.

53 Estate jewels

42 RetailRap

Antiques with minor flaws might still be valuable, but dealers look for telltale signs of wear.

How to promote your store’s ethical credentials to gain buyers’ confidence.

54 Colored gemstone

STYLE & DESIGN 44 Jewelry Connoisseur Soft pastels are showing their colors in the latest collections.

47 Book review In Bejeweled, Kyle Roderick puts 14 ethical designers in the spotlight.

Page

24

Grey stones are taking the fashion world by storm, from spinels and sapphires to tourmalines and zircon.

MARKETS & PRICING 57 Trade report 59 USA 64 India 65 Israel 66 Antwerp 67 Hong Kong 68 Diamond data 73 Price list 85 RapNet price list 90 Directory 94 Calendar 96 The final cut DIAMONDS.NET

Contents.indd 1

DECEMBER 2019 7

11/27/2019 7:56:14 PM

Note from the publisher BE PART OF THE CONVERSATION

IMAGE: BEN KELMER

M

illennials are buying diamonds — just not the way their parents did. This presents a major challenge to our industry, according to the CEO of Tiffany & Co., Alessandro Bogliolo. The onus is on us to understand the evolving trends that are driving change among the consumers we serve. To accomplish this, we need to be “part of the cultural conversation of today,” Bogliolo explained in a recent interview with the Chicago Tribune.

The engagement-marriage-mortgage tradition has been turned on its head. Couples are not moving forward with an eye on the past, but with their gaze firmly focused on their wants, needs and desires. The key takeaway term from this new reality is “personalization.”

There is no cookie-cutter, one-size-fits-all model for the evolution of modern relationships. This notion is especially important during the current proposal season, which stretches from Thanksgiving to Valentine’s Day. While it accounts for almost 40% of engagements, this period also provides a time to focus on the wider “gifting opportunities” that fit modern-day trends.

De Beers has categorized these trends as commitment jewelry, love gifting, cohabitation and same-sex couples. And

no matter your role in the diamond and jewelry pipeline, you will need to understand their impact on the goods you source, produce, buy or sell.

However, it is not just these modern twists on love and relationships that you need to account for. Even the “traditional” option of marriage is far from the way it used to be. And forget the actual proposal, money spent or ring type chosen; women are increasingly taking a leading role.

Brides-to-be bought 14% of engagement rings in 2017, double the figure from 2013.

So it is important to remember, what you know and understand today will change. The only certainty is the speed of that change: Fueled by our digital world, it will be far faster than in generations before.

This is why being involved in a conversation with your current and future customers is critical. As the world changes around us, we need to be constantly looking and listening to ensure we are still relevant to the choices our customers make.

John Costello PUBLISHER john.costello@diamonds.net DIAMONDS.NET

Note from the publisher.indd 1

DECEMBER 2019 13

11/27/2019 12:59:29 PM

S RE

A

AM

RT PA

I 1: D

AI NT

COVER

CLARITY QUEST Members of the Young Diamantaires group visited South Africa to learn more about the industry, but they also have their own wisdom to contribute.

BY JOSHUA FREEDMAN

18 DECEMBER 2019

Cover story pt1 Diamantaires.indd 1

A

nyone who wants to know how to transform a diamond business and safeguard its future might do well to speak to the 25 members of the Young Diamantaires group who went on a mission to South Africa earlier this year.

The delegates from 10 countries included a jeweler who’d set up a museum to boost interest in gems, another who had begun offering lab-grown diamonds, and several social-media buffs. This reporter was not the only participant who sat at the back of the bus receiving Instagram lessons from true millennials.

Young Diamantaires came into being in 2016, when Rami Baron, chairman of the promotions committee for the World Federation of Diamond Bourses (WFDB), saw the need to help the new generation of industry members connect. He set up a WhatsApp group — which attracted more than 250 members — and has organized meetings at trade shows. The oversubscribed visit to De Beers’ Venetia mine in September was the most ambitious plan yet, involving a day at the site, excursions to a local school and the nearby Mapungubwe National Park, and an opportunity to meet businesses De Beers supports in the surrounding area.

BENEATH THE SURFACE The strong consensus on the trip was that mining companies needed to grant this sort of access to people who were interested, and not just those with a direct commercial connection to the operations. De Beers has often welcomed clients at its mines (and once hosted reality star Kim Kardashian at the Jwaneng deposit in Botswana), but the members of the Young Diamantaires were in a different category. Many of them were looking to learn more about the industry and bring back knowledge they could use to help sell diamonds in their or their customers’ retail stores.

“People [once] wanted to be secretive about what goes on in a mine. But I have seen huge change in this,” says Prernaa Makharia, an Indiabased jewelry blogger and influencer, and one of the volunteer social-media tutors. “[Companies] have started believing in the concept of bringing awareness to consumers about what goes on behind the scenes.”

For instance, the group met mining workers who seemed happy in their jobs; encountered the stringent safety rules De Beers enforces at Venetia; and were able to ask mine managers about the operational details. Among other things, they learned about the current expansion from open-pit

DIAMONDS.NET

11/27/2019 2:44:59 PM

IMAGES: SHUTTERSTOCK; SIMPHIWE NKWALI/DE BEERS; CHRISTOPHER ZOETTL

to underground mining, which will ensure rough supply through 2046.

De Beers also arranged a visit to one of the 19 local schools the company funds, and invited some nearby businesses — which De Beers also supports — to display their merchandise at the lodge where the group was staying. After all, modern consumers increasingly care about the social good associated with products and want real assurances about the provenance of diamonds.

“Where they do these things, other mining companies are bound to follow,” says Kealeboga Pule, founder and managing director of Johannesburg-based Nungu Diamonds, who initiated and helped organize the trip. “They’re realizing the need to be more open.”

SOCIAL RESPONSIBILITY In addition to being informative, the three days were an opportunity to devise ways of helping people in South Africa while also boosting sales at home. One evening, after the group had visited the De Beers-sponsored Renaissance Secondary School in the northern town of Musina, Baron sat the group around a campfire to discuss how they could raise $140,000 to fund a library and cafeteria for the pupils.

Under a baobab, the region’s protected “upsidedown” tree, they debated the details of how to find the money, but one thing kept coming up: Not only does the industry have an ethical imperative to get involved in these local projects, it has a commercial interest in sharing news of its efforts as a story for consumers. (One such narrative might center around the baobabs, which De Beers has worked to conserve by transplanting whenever mining operations force the company to uproot them.) “[The campfire discussion] sparked a desire and determination to make a change and to contribute,” Baron says. “The highlights have been shared with [De Beers] executives, who could see the rawness of emotion we all experienced,” as well as that eagerness to effect change.

The participants’ visit to Mapungubwe, a hilltop located in a national park of the same name, yielded other stories, as the site has a rich jewelry history. In

the 13th century, it was a trading hub for gold and ivory — a fact that gained attention in 1932, when a treasure chest full of artifacts was found there.

MILLENNIAL MIND-SET To create export opportunities for cutters in South Africa, Young Diamantaires is now piloting a supply arrangement with Australia, where Baron is based. It also plans to expand the group through a website and, potentially, by launching global chapters, the founder adds.

In fact, the group has proven too successful for its social-media platform: Membership of Young Diamantaires recently exceeded WhatsApp’s 256-person limit, forcing it to restart on rival app Telegram.

The participants know they have a difficult task reforming the wider industry. Attitudes in the trade are changing slowly, but there still needs to be a shift in the way people approach new ideas and younger trade members, they argue. Many older diamond dealers believe the current downturn is simply another dip that will end with an upturn, but this is incorrect, says Alain Zlayet, CEO and founder of Antwerp-based Zlayet & Sons Diamonds.

“We are the ones who are thinking and talking and researching in a new way, like the millennials,” explains Zlayet, who has set up a Young Diamantaires branch for Europe. “They’ve understood we are a source of information for [institutions such as the WFDB]. They tap us.”

The reporter was a guest of De Beers. ◼

DIAMONDS.NET

Cover story pt1 Diamantaires.indd 2

Above: The Young Diamantaires at the Venetia mine. Left: Prernaa Makharia with local children in Musina.

Opposite, from top: Melissa Smet (right), a director at the Syndicate of the Belgian Diamond Industry, with a cutter in Johannesburg; The meeting under the baobab tree.

“WE ARE THE ONES WHO ARE THINKING AND TALKING AND RESEARCHING IN A NEW WAY, LIKE THE MILLENNIALS” ALAIN ZLAYET, CEO and founder of Antwerp-based Zlayet & Sons Diamonds

DECEMBER 2019 19

11/27/2019 2:45:07 PM

RETAI L RAP

HOW TO

PROMOTE

ETHICAL CREDENTIALS

KNOW THAT THEY WANT TO KNOW Retailers often have difficulty knowing which shoppers are genuinely interested in what the company stands for.

They worry they might lose business by imparting unsolicited information to the wrong customer. However, in this age of awareness, most customers are likely to be interested in a business’s social and moral beliefs, says Iris Van der Veken, executive director of the Responsible Jewellery Council (RJC).

As such, not giving them the information they seek is even more detrimental.

“Whether or not consumers actually come forward with questions at the counter, we know that the large majority preresearches online before making a purchase,” she explains.

Independent adviser Christina Miller concurs. “If you’re making the effort to legitimately take the steps that lead to a credential, it is important to share this,” stresses Miller, founder of Christina T. Miller Sustainable Jewelry Consulting.

“While customers are increasingly more informed about the challenges faced by the jewelry industry, they don’t necessarily know what to ask.”

Retailers should rely on their interpersonal skills to understand a customer’s needs, adds Tiffany Stevens, CEO of the Jewelers Vigilance Committee (JVC). “If you’re running a successful jewelry business in 2019, you know your customer, and you know how to serve them.”

1

Customers are more likely to purchase products from companies that share their values. Here are five tips to gain buyers’ confidence. By Leah Meirovich

W

hen it comes to the jewelry industry’s future, consumer trust is essential. Recent research shows that a vast majority of customers are more disposed to purchase a product from a company that advocates for an issue they care about. In contrast, they would refuse to buy from a company with a moral code that went against their beliefs, even if no alternative were available. To attract consumers and increase sales, it’s therefore imperative for retailers to highlight their ethical credentials. Doing so gives customers a reason to choose your store over your competitors’.

42 DECEMBER 2019

RetailRap.indd 1

2

COMMUNICATE CLEARLY Not letting shoppers know the effort you’re making and the great things you’re doing obscures what makes your

DIAMONDS.NET

11/27/2019 3:51:30 PM

business special. Since studies show that consumers are more interested in this information than ever, retailers shouldn’t be afraid of overwhelming them, says Stevens.

Not only have customers become receptive to these efforts through other industries, they now expect them, so it’s even more important for the jewelry industry to keep up. “Don’t be shy,” she encourages. “Engage on this issue and you will likely make your customers even happier than they already are.”

While Van der Veken agrees, she points out that when sharing information, retailers should keep it simple and accessible.

“Consumers are far more knowledgeable now, especially the younger consumer, who is looking at not just ‘tell me,’ but ‘show me,’” she says. “[But] as today’s consumers are bombarded with more information than ever before, it’s vitally important to communicate as clearly and straightforwardly as possible.”

Van der Veken advises providing online links to additional information the customer can look up if he or she chooses.

“KNOW YOUR SUPPLY CHAIN, KNOW WHO YOU’RE BUYING FROM, LOOK AT YOUR PRODUCT DISCLOSURE AND TAKE SMALL STEPS” actions that align with your customers’ values is optimal, it’s most important to make the effort. In fact, 90% of Americans say it’s okay if a company is not perfect, as long as it’s honest, according to a survey by Cone Communications. “[Being ethical] is a process, and that’s fine, because people are afraid, and they shouldn’t be afraid,” says Van der Veken. “It is a road map of continuous improvement.”

MAKE A LOCAL DIFFERENCE The question isn’t what most consumers care about when it comes to ethical credentials, it’s what your customers care about. Ethical considerations can cover a large range of OPTIMIZE YOUR CHANNELS topics, from environmental and social impact to human-rights Understanding and embracing the advantages of touting issues, charitable works and employee relations. However, your ethical practices is one thing, but knowing how to research shows that contributing to the economic development implement them is another. of the local community is one of the most important issues While experts recommend posting the information on consumers consider when it comes to parting with their hardmultiple channels, they agree a retailer’s social-media platforms earned cash. and website are the best places: They are non-intrusive, and “Consumers care that their purchases are designed, consumers have indicated that they research businesses online manufactured and ultimately delivered with respect for human before spending their money. In-store displays are another way rights, and not associated with conflict,” says Van der Veken. to provide data without being pushy.

“More and more consumers want to know that the retailer is “A legitimate credential should be shared across as many a good community citizen too, so they may like to channels and methods as possible,” says Miller. know how the retailer contributes to development.”

“So if there’s a brick-and-mortar space, then signage A strong example of community awareness and can be included. If the retailer is online, then giving back is De Beers. The miner not only hires a there are opportunities to share across websites large proportion of local citizens, but also creates and social media.” local scholarships, supports educational and skillRetailers who are still reluctant to publicize their of Americans say development programs, builds infrastructure, and credentials directly can form strategic partnerships it’s okay if a company is helps the area’s wildlife. with philanthropic groups that align with their not perfect, as long as business values, such as Jewelers for Children it’s honest, according to or a wildlife association. Publicizing this type of EVERY LITTLE BIT HELPS Cone Communications information will indirectly inform customers of a Many of the practices retailers can highlight company’s efforts. require little effort, but score big with One thing that’s crucial, though, is to educate sales staff consumers. Disclosing the origins of metals and gems or so they can correctly and efficiently pass on information to stating whether they’ve undergone treatments is a good start. consumers.

Customers appreciate transparency in any form, and knowing “Spending the time and effort to properly train your frontline your supply chain is ethical goes a long way. sales staff is a really effective way to get your messaging and “[Ethical credentials] are ultimately about showing values across,” says Stevens. commitment and progress, not about being perfect,” says Van Van der Veken agrees. “A consumer deserves reliable data, der Veken. “It starts with the basics. Know your supply chain, and trust is at the heart of buying a piece of jewelry. Every know who you’re buying from, look at your product disclosure retailer is as unique as the customers they serve. However, the and take small steps. Small, meaningful steps.” one common thread is that every retailer must be prepared to Even something as simple as emphasizing that your jewelry is address well-researched, well-educated, knowledgeable and made in the US or that you’re involved in philanthropic efforts caring customers.” ◼ can be a good starting point, notes Stevens. And though taking

3

5

90%

4

DIAMONDS.NET

RetailRap.indd 2

DECEMBER 2019 43

11/27/2019 3:51:39 PM

TH E FINAL CU T

EXHIBITING ENTHUSIASM From Germany to Japan, the five top museums for gemology feature treasures for scientists, history buffs and jewelry lovers. By Jodie Smith

treasures in the Janet Annenberg Hooker Hall of Geology, Gems, and Minerals is the famous Hope diamond. The institute is devoted to supporting scientific research, and as such, it maintains a collection that is accessible to researchers from all over the globe. The intention is that generation after generation of gemologists, geologists and scientists will be able to study these items and contribute to our understanding of gems and minerals for centuries to come. naturalhistory.si.edu

W

hether you’re beginning a career in gemology or looking for a refresher on a lifelong passion, viewing an extensive gemstone collection in person is edifying as well as entertaining. These must-visit museum collections have been selected based on their importance, the quality of the overall gemstone selection and the educative experience they provide.

DEUTSCHES EDELSTEINMUSEUM Idar-Oberstein, Germany, is home to many significant gemstone dealers, and the Deutsches Edelsteinmuseum illustrates the region’s historical significance in the gemology world. The museum, which opened in 1859, boasts 10,000 gem specimens arranged across four floors of a manor house. The art of gemstone carving gets particular attention, and there are regularly changing temporary exhibits alongside the permanent selection. On the second floor is the “Object of the Month,” a showcase that highlights some of the museum’s distinctive specimens. edelsteinmuseum.de THE SMITHSONIAN GEM AND MINERAL COLLECTION With around 375,000 specimens, the Smithsonian National Museum of Natural History in Washington, DC, contains one of the world’s largest gemstone and mineral collections. Among the 96 DECEMBER 2019

The final cut.indd 1

THE BEST GEMOLOGY APPS • MAYER AND WATT: Combines a visually pleasing and easy-to-use interface with a thorough but digestible “gemopedia.”

• M2M: Created by the Gemological Institute of America (GIA), it provides access to certificates and provenance by scanning the physical GIA report.

It tells the stories behind diamonds, including the artists who created the jewelry containing the stones, if applicable.

• GEMLOGIS: Helps buyers calculate an estimated carat weight based on the specific properties of the gemstone type, and includes a comprehensive database of more than 130 stones.

GIA NEW YORK The Gemological Institute of America’s (GIA) headquarters in Carlsbad, California, is home to the GIA Museum, but the institute also hosts an outpost in New York’s International Gem Tower.

The tower’s current gemstone exhibition features 14 display cases brimming with nearly 100 items from the Carlsbad campus. The 18-foot vitrines contain enormous aquamarine crystals, mineral sculptures and rare pearl varieties — a refined collection for those who are scarce on time. gia.edu THE YAMANASHI GEM MUSEUM The Yamanashi Gem Museum in Fujikawaguchiko, Japan, celebrates the Yamanashi district’s association with gems. The region’s gemprocessing industry developed in the 17th century, and mining peaked between the mid-19th and early 20th centuries. The museum’s specialty is communicating the processes and history of gem production via more than 3,000 rough and faceted gems collected from around the world. gemmuseum.jp/en ◼

IMAGE: VICTORIA AND ALBERT MUSEUM

Gemstone spiral at the Victoria and Albert Museum.

VICTORIA AND ALBERT MUSEUM For the aesthete, jewelry lover and gem aficionado, one of the most visually arresting gemstone displays can be found in London’s Victoria and Albert Museum (V&A). At this British institution of art and design, the standout offering is a swirling spiral of 154 gemstones, including a spectrum of sapphires, tourmalines and garnets. The V&A is perfect if you are partial to expanding your jewelryhistory knowledge: The museum boasts one of the most comprehensive collections in the world, with more than 3,000 creations that map the story of jewelry design and techniques from ancient times to the present day. vam.ac.uk

DIAMONDS.NET

11/27/2019 12:46:36 PM