Rapaport Maagazine - November 2020

VOL. 43 NO.11 NOVEMBER 2020

HO L IDAY O F HO P E EVEN AMID UNCERTAINTY, JEWELERS ARE FINDING REASONS TO SMILE THIS SEASON

R E PO RT

RE TA IL

ST Y L E

BO O K S

MEMO DEALS SOMETIMES GO TERRIBLY WRONG, BUT THERE ARE WAYS TO REDUCE THE RISKS

HOW TO HOLD VIRTUAL TRUNK SHOWS SO YOUR GOODS CAN SHINE FROM AFAR

DISCOVER THE ON-TREND DESIGNS THAT STORES ARE STOCKING THIS YEAR

PRECIOUS GEMS, ROLEX WATCHES, AND EXCITING JEWELRY STORIES

CONTENTS VOL. 43 NO. 11 NOVEMBER 2020

STYLE & DESIGN

RETAIL

8 NEWS

24 RETAIL PROFILE

Synthetics move on; Manufacturers cut Diwali vacation; Tiffany takeover back on track.

Curated collections from all eras are on offer at Broken English in California and New York.

28 RETAILRAP

COVER

14 MAKING THE MOST OF THE HOLIDAYS

Between Covid-19 and political upheavals, this season’s prospects are looking uncertain. But retailers are finding bright spots in digital selling and innovative thinking.

18 REPORT

With live events off the table, industry experts share how to hold a successful virtual trunk show.

30 RETAIL INSIGHT When dealing with customer information in today’s e-commerce environment, privacy and security are paramount.

Memo is a high-risk practice, but there are ways to protect yourself against losses if a consignment deal goes bad.

32 JEWELRY

CONNOISSEUR

Hanging playfully from bracelets, necklaces or earrings, cheerful charms are just what we all need right now.

34 BOOK REVIEW A dictionary-style volume pays tribute to the works of Dior Joaillerie creative director Victoire de Castellane.

36 STYLE Bright colors, talismanic trinkets, and classic looks are the top orders this holiday season as the pandemic keeps retailers cautious.

40 DESIGNER Award-winning Brazilian jeweler Silvia Furmanovich explores the versatility of bamboo in her latest collection.

42 LEGACY

42 PAGE

40 PAGE

MARKETS & PRICING 51 TRADE REPORT Increase in activity buoys cautious market.

A trio of new tomes illuminates the worlds of jewelry, gem and watch aficionados.

52 USA 56 INDIA 57 ISRAEL

45 ESTATE JEWELS

58 ANTWERP

Store owner Rhett Outten shares the benefits of carrying both modern and vintage pieces.

59 HONG KONG

46 COLORED

77 RAPNET PRICE LIST

60 DIAMOND DATA 65 PRICE LIST

GEMSTONE

The striking green peridot has had its ups and downs since ancient times, but it’s enjoying a renaissance among today’s luxury maisons.

86 DIRECTORY 90 CALENDAR 92 THE FINAL CUT

On the cover: Thelma West Ariel Marquise pendant in 18-karat gold with diamonds; Oscar Heyman bracelet in platinum and 18-karat gold with Paraiba tourmalines, padparadscha sapphires and diamonds; Nadine Aysoy Mille Et Une Feuilles Climbing Ivy earrings in 18-karat gold with South Sea pearls, rubellite and diamonds.

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IMAGES: VAN CLEEF & ARPELS SA; ARCHIVIO GBB/BRIDGEMAN IMAGES; SILVIA FURMANOVICH

IN-DEPTH

N OTE FROM TH E P U B L I SHE R A CLASS OF THEIR OWN

John Costello PUBLISHER

IMAGE: BEN KELMER

J O H N .COST E L LO @ D IA M ON DS.NET

W

hy does the grading of a diamond matter? It matters because of two defining elements: rarity and uniqueness. Diamonds are like snowflakes; no two are the same. A grading certificate accurately captures this by detailing the various elements that make a specific diamond a singular wonder of nature. This also allows the diamond to be accurately valued and, indeed, treasured.

If diamonds were not unique, and instead simply rolled off a production line, the effort and expense of obtaining a grading certificate would not make much sense.

So, that being said, should synthetic diamonds require a grading certificate?

The World Jewellery Confederation (CIBJO) believes they should not. “Laboratories should reserve the term ‘grading report’ for natural diamonds rather than lab-grown stones,” it contends, arguing that “lab-grown diamonds lack the rarity that underpins the concept of grading.” CIBJO therefore recommends that labs provide only a detailed list of characteristics for synthetic diamonds, and refer to this document as “Laboratory-Grown Diamond Product Specifications.”

This makes sense. If you brought a brand-new Porsche, for example, to the appraisers on Antiques Roadshow, they would laugh at you. The seasoned experts in this TV series — and elsewhere, for that matter — would see little value in spending time appraising a brand-new, made-to-measure product.

Synthetic diamonds are beautiful, fun and fashionable, but they are not rare and are certainly not unique. The market for them is still in its infancy and is constantly developing. Thankfully, they have by and large dropped the untruthful marketing that presents them as “environmentally friendly” and “ethical” alternatives. It is now time for them to stop mimicking the world of natural diamonds and set themselves apart as the wonderful product category they are. For this to happen, their pricing and grading cannot be linked to that of natural diamonds. They are not substitutes, and dressing them up as such is misleading to consumers.

You are invited to write to me at john.costello@diamonds.net and let me know where you stand on this subject.

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NOVEMBER 2020 7

COVER

MAKING THE MOST OF THE HOLIDAYS Between Covid-19 and political upheavals, this season’s prospects are looking uncertain.

But retailers are finding bright spots in digital selling and innovative thinking.

BY LARA EWEN

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DIAMONDS.NET

IMAGE: SHUTTERSTOCK

From left: Mastolini Signature Eclisse ring in 18-karat rose gold with a black Tahitian pearl and diamonds; Carbon & Hyde Gemini ring in 14-karat yellow gold with diamonds; Andreoli Elephant brooch in 18-karat yellow gold with mother-of-pearl, diamonds and emerald; Kesslers Diamonds Moon & Back sterling silver pendant with diamond; Leigh Maxwell Amani Peace pendant in 18-karat yellow gold with diamonds.

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NOVEMBER 2020 15

I

COVER

t’s been a tumultuous year, and the upcoming holiday forecast has not eased concerns. Although sales are still expected to increase over last year, the margin is slim, according to AlixPartners. The consulting firm estimates that revenues for October through December will be only 1% to 2.6% higher than they were in 2019. Even with online sales expected to grow by 25% to 30% year on year, according to Deloitte, jewelry stores not already comfortable selling digitally will likely be unable to take advantage of that surge. Covid-19 has been a significant factor, certainly, but along with the year’s civil unrest and political instability, these numbers only confirm a retail upheaval was already in place.

‘IT’S A ROLLER COASTER’ Fortunately, there’s also reason to be cautiously optimistic. Pandemic-related travel restrictions have shifted luxury dollars from vacations into jewelry, according to a recent De Beers study.

“I have long suspected that the pool of money from which people draw to buy jewelry is the same pool from which they draw for travel experiences,” says Babs Noelle, owner of Alara Jewelry in Bozeman, Montana. “Now I have confirmation.

People who were supposed to go somewhere are now buying a diamond bracelet instead.”

Despite a four-week closure, Noelle’s 2020 sales were up 5% year on year by mid-September.

Vacation-home owners in Bozeman have also elected to stay on through the fall and winter. “Our streets are lined with cars that have out-of-state plates,” she says. “So at least for me, we’re going to have a pretty darn good Christmas.”

Other store owners are less certain. “To us, everything looks pretty good,” says Patrick Larkin, general manager and owner-in-training at Burri Jewelers in Cheyenne, Wyoming. “But every year is always a never-know. It’s not looking bad now, but anything could change.”

The presidential election also has retailers on edge. “It’s hard to see the future and how it’s going to be, because it’s a roller coaster right now,” comments Erik Shimunov, owner of Crown Jewelers in New York. “Everything changed because of Covid-19, and before an election, people always feel uncertain because they don’t know what’s going to happen.”

THE RIGHT INVENTORY To bring in customers and get them excited for the season, store owners are looking at products designed to appeal to a wide range of people.

“We’re trying to stick to the basics and [to] things that sell every day,” says Joe Gehrke, president of Kesslers Diamond Center, which has six stores in Wisconsin and one in Michigan. “At the same time,

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we’re doing new product development. Our clients look to us for innovation, so we’re launching a new collection for this upcoming holiday.”

Stores should boost their inventory levels well in advance of the December rush, says Ellen Fruchtman, president of Fruchtman Marketing in Toledo, Ohio. Her company, which specializes in the jewelry industry, is “advising our clients to not only make sure they have enough inventory to fulfill their sweet spots, but to consider bumping up some inventory above their average sales from 2019.”

Shimunov expects high-end goods, particularly Rolex, to remain in demand at his store. “The price of watches went up 15% or 20%,” he says. “More people start buying them, so it’s hard to obtain them.

And there’s no shows, so it’s hard to get merchandise.

Rolex has almost doubled in price. And in Cuban chains, there’s been a shortage, because inventory has been sold out. So prices there went up, too.”

Larkin, whose best-selling watch brand is Citizen, says he’s expecting bridal and smaller gifts to be big sellers. “We’re being somewhat conservative with buying, but still buying a bit of stuff. We’re doing really good with engagement, and I can get highend lighters and cigar cutters and stuff like that.

Customers are buying all the small stuff.”

He’s also excited about colored stones. “We have natural-colored, non-treated pink sapphires. And we always get odd stuff and nontraditional rings with tons of blue topaz and blue sapphire.”

RETHINKING SUPPLY CHAINS Despite some early 2020 delays, Fruchtman says the supply chain is rebounding, albeit with a few changes. “For example, marketing departments have been depleted, and some are obviously not producing as much inventory,” she elaborates.

This has been a particular problem for watch brands, she adds, but many suppliers understand the situation and are being flexible about payments and buy-in levels. “Reps are working from home.

And several are getting creative and offering up virtual trunk shows.”

For Noelle, whose online business has grown during the pandemic, supply chains haven’t been a significant problem, but shipping has. “We’re already rural and away from the major shipping hub, so we became very accustomed to some delays,” she relates. “But now that’s broken down to more than just an additional day. Now packages take a week. And so we’re switching back to FedEx, even though we like the US Postal Service.”

MARKETING ON ALL FRONTS When it comes to marketing, store owners such as Gehrke are doing a mix of online and traditional ads. “We’ve been a longtime radio advertiser, and it’s

IMAGE: SHUTTERSTOCK

deep in our roots,” he says. “But our single biggest store front is our website. So we’re experimenting with digital strategies and with social. Ninety-nine percent of our spend used to be in radio, but now we’re doing more balanced spending.”

Some stores are sticking to more traditional methods. “We’ve gotten away from online completely,” says Larkin. “The whole internet thing with hits and clicks is a major scam. So with us, it’s radio and a little television. And print still kind of works here. People still get the paper, and it brings in the older crowd, which has the money.”

Digital will be front and center this year, according to Fruchtman, but traditional advertising still matters. “People are home more and on their devices,” she says. “And the older ones are watching more television. So if you have the dollars to do some broadcast, do it.”

Noelle says her marketing strategy is the opposite of her local competition. “They pulled their [print] ads, but we stayed, and we got really good rates and very good treatment.”

She also redid her window displays. “People are walking our downtown who don’t normally walk our downtown. I’m also getting touchscreens installed, so you can touch the window and see every item.

I’m taking advantage of my windows, which is advertising.”

Whatever the medium, the message should be emotion-driven, Fruchtman stresses. “Jewelry has always been an emotional purchase. It’s not about

the product or price. It’s the way it makes you feel. So this year, more than ever, you have to tap into that.”

A SAFE ATMOSPHERE One of the biggest challenges for store owners in 2020 has been to make sure customers feel comfortable shopping. To that end, Noelle has set up hour-and-a-half time slots in which she closes to the store to all but one customer. “No one who sets an appointment doesn’t buy,” she declares. “I also decided that in this store, we would require masks.

Because of that, I was threatened with a gun. I had people screaming at us. But by taking a stand, it made people feel safe shopping here.”

In fact, she adds, many new customers have come to her from her competitors, who have been “wishy washy” about requiring masks. “One store lost its entire sales staff because of their lax mask policy.

They were closed until recently, because they didn’t have enough people to open the store.”

Covid-19 isn’t the only concern as Christmas approaches. Retailers need to innovate if they want to stay relevant, warns Gehrke. “People are looking for something different,” he says. “Don’t rely on your past. Excite your clients. And don’t run out of inventory. A lot of people took a heavy hit when they had to shut down, but in this instant-gratification society, people want it now, so don’t run out of everyday stuff. That’s what people want. And don’t be afraid to fail and try different things.” ◼

TREND FORECAST

What’s expected to sell best this season CLASSIC STYLES

“Classic diamond jewelry is always the biggest seller,” says Ellen Fruchtman of Fruchtman Marketing.

“And that will more than continue this year.

In fact, because of the kind of year it has been, we believe we will see additional sales with that type of product.”

INNOVATIVE DESIGNS

“We want to bring forward new product and innovation,” says Joe Gehrke of Kesslers, who always launches a new collection for the holidays. “We also think the basics will sell, and we do a gift with purchase [of] any of our studs, which our customers like in a halfcarat to 1-carat weight.”

DAINTY AND AFFORDABLE

From left: Alice Pierre Puzzle necklace in 14-karat yellow gold; W.Rosado Pearl ID bracelet in 18-karat yellow gold with Australian South Sea pearls; Goshwara earrings in 18-karat yellow gold with chrysoprase and diamonds.

Delicate, clean-lined pieces are hot, says Erik Shimunov of Crown Jewelers, highlighting small and singlestone pendants. “Most people like items priced between $200 and $700.”

ULTRA-LUXE PIECES

“I’ve bought heavily into my lines that are more expensive, like this Italian line with expandable ring-tobracelets,” says Babs Noelle of Alara Jewelry.

“During the lockdown, men felt so horrible about what women were going through, teaching kids at home. So I have more things in the $8,000 to $20,000 range than I ever have.”

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THE FINAL CUT

G I F T G OA L S R A PA P O R T M A G A Z I N E A S K S : W H AT ’ S O N YO U R H O L I D AY W I S H L I S T T H I S Y E A R ?

B Y L E A H M E I R OV I C H

BARBARA DUTROW BOARD MEMBER, GEMOLOGICAL INSTITUTE OF AMERICA (GIA) PROFESSOR OF GEOLOGY AND GEOPHYSICS, LO U I S I A N A STAT E U N I V E R S I T Y

M

CEO, BEN BRIDGE JEWELER

I

n my younger life, armed with a false and inflated sense of available funds, requests would vary between a new bike or a helicopter. Gift-giving — not my parents’ strongest suit — would find them cherry-picking a more random item on my wish list, like my school uniform for my first year of school (true story!). Also, apparently one can never have enough socks or deodorant to go forth into the world.

It was only later I realized it was about time spent with family. As life moves on and faces age at the holiday table, without wanting to sound pious, who would not want the gift of time? Time to enjoy the sameness and traditions of holidays; to encapsulate my children in a time bubble; to go back and relive the joy of youth — unwrapping sweets hanging off the tree and replacing them with stones. So the gift at the top of my list would be time.

I

’m dreaming of the new Rolex Oyster Perpetual watches. In a year when there isn’t too much newness, these were a perfect treat to add energy and excitement. The dynamic and colorful dials make choosing which one quite a challenge. At the top of my list, though, is the turquoise dial. The color would bring a spring to my step and some good color to gray Seattle days this winter. I may be dressing a bit more casually these days, but I always feel better when wearing jewelry and a watch.

IMAGES: ROLEX; SHUTTERSTOCK

y love for all things tourmaline makes the number-one item on my gift wish list a whimsical pair of tourmaline sunglasses. I first discovered them a few years ago at the Tucson gem shows — made with rubellite slabs. But I truly fell in love last year when I tried on a pair of bluish liddicoatite glasses, framed with 18-karat yellow gold. There is nothing quite like them, and I have an affinity for unique items. A close second — and more practical gift — on my wish list would be a chainsaw to help keep the yard under control after windstorms and hurricanes.

LISA BRIDGE

STEPHEN WETHERALL MANAGING DIRECTOR AND CEO, LU CA PA D I A M O N D CO M PA N Y

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