Rapaport Magazine - August 2020

VOL. 43 NO.8 AUGUST 2020

Saved by the bride?

How the traditional diamond engagement ring could keep jewelers afloat in 2020

R E PO RT

M A R K E TI N G

R ETAI L

E STATE

SMALL MINERS ARE AMONG THE CASUALTIES OF COVID-19. CAN BIGGER ONES BUY THEM OUT?

FINDING THE RIGHT BALANCE BETWEEN AN EFFECTIVE PITCH AND STAYING SENSITIVE

BIRTHSTONES ARE WOOING COUPLES WHO WANT TO PERSONALIZE THEIR NUPTIALS

HOW TO SELL VINTAGE WEDDING RINGS: TOP TIPS FROM AN EXPERT

CON TENTS VOL. 43 NO. 8 AUGUST 2020

IN-DEPTH

COVER

8 NEWS Advancing artisanal miners; Designers call for greater inclusion; Rough output falls in 2019; Signet cutting back.

12 NEWS ANALYSIS Amid anti-racism protests, many brands are taking a stand on social and political issues, but is it worth it for jewelers to speak out?

14 REPORT Smaller diamond producers are shutting down some operations or trying to sell them off — but in today’s slow market, potential buyers are struggling as well.

STYLE & DESIGN

16 THE RING’S

36 JEWELRY

The bridal market is still going strong despite the Covid-19 downturn and may be jewelers’ best hope for boosting business.

Spheres of all sizes offer a satisfying symmetry that designers love to celebrate.

THE THING

22 THE INDIAN BRIDE Shopping for the country’s wedding season has begun under a partial lockdown, and it’s keeping retailers busy finding new ways to sell.

26 AUCTION REPORT The first live Sotheby’s auction since Covid-19 saw low sell-through rates, but fancy diamonds stood out as a bright spot. Meanwhile, successful online sales are proving people are willing to purchase high-value items from afar.

CONNOISSEUR

38 STYLE Textured gold makes for a richly natural look that many are choosing over a polished finish.

40 DESIGNER Four high jewelers share the setbacks and opportunities they’ve experienced during the coronavirus in Shanghai, Paris and Hong Kong.

44 LEGACY After seven decades in the business, modernist designer Betty Cooke is the subject of a new exhibit showcasing her simple yet striking works.

47 ESTATE JEWELS RETAIL

30 RETAIL PROFILE After crises and closures, customers have returned to Graham Jewelers in Wayzata, Minnesota.

32 RETAILRAP How can jewelers sensitively market their products during a pandemic? Consultant Phillip Bosen shares his tips for finding the right balance.

Los Angeles estate dealer Jerome Heidenreich answers four key questions about stocking and selling vintage engagement rings.

36 PAGE

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MARKETS & PRICING 51 TRADE REPORT Trading slow as retail reopens.

52 USA

48 COLORED

56 INDIA

GEMSTONE

57 ISRAEL

This bright, durable green garnet from East Africa is a captivating alternative to emerald.

58 ANTWERP 59 HONG KONG 60 DIAMOND DATA 65 PRICE LIST 77 RAPNET PRICE LIST

34 RETAIL INSIGHT Birthstone engagement rings are an affordable, more personalized alternative to diamonds.

40 PAGE

82 DIRECTORY 86 CALENDAR

44 PAGE

88 THE FINAL CUT

N OTE FROM TH E P U B L I SHE R CHANGES FROM M I N E TO M A R K E T

John Costello PUBLISHER

IMAGE: BEN KELMER

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

W

hen the largest and oldest company within your industry looks to make transformational changes to its business model, it’s time to sit up and pay attention.

De Beers is not only considering a significant overhaul of the way it sells diamonds, but looking to expand further into jewelry and to restructure its mines. The potential changes were announced in a letter to staff from De Beers CEO Bruce Cleaver after Covid-19 took its toll on the company’s performance. The diamond producer is expected to report a $100 million loss for the first half of 2020.

Indeed, by the end of the year, we will likely be operating in a diamond and jewelry sector that has undergone fundamental changes. Each sector along the pipeline from mine to market is trying to cope with the new reality the world has been forced to embrace.

We are already witnessing significant changes right here, right now. The JCK Las Vegas show has been forced to go virtual for 2020, while the owners of the now-defunct Baselworld fair have established a replacement trade show, Houruniverse, that will run online throughout the year and — Covid-19 permitting — feature an annual live event.

However, especially in the short to medium term, the most visible changes in our industry are likely to be at the retail level.

Just under 66% of trade members believe online jewelry sales will grow in the coming months, and almost 70% of business owners plan on expanding their e-commerce presence, according to a survey by global gemological lab SGL. When asked if they thought a “try at home” jewelry business model would become the new way of engaging with consumers, again, almost 70% of respondents agreed, while fewer than 10% said no.

The question we should all therefore be asking is not if we need to transform elements of our business to meet the current and future challenges we are seeing all around us, but how.

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N E W S A N A LY S I S

T O S P E A K O U T, OR NOT TO SPEAK OUT? Amid anti-racism protests, brands are increasingly taking a stand on social and political issues, but jewelers disagree on whether it’s worth voicing their opinions.

B Y J O S H UA F R E E D M A N

T

he killing of George Floyd at the hands of police in May and the subsequent protests split US society in a way that few other events have. While companies in all sectors have increasingly engaged in corporate activism in recent years, the latest debate over race has prompted countless brands to weigh in on the issue.

Yet for jewelers, it’s not so simple. They have seen how even the biggest, most publicity-trained luxury brands have suffered a backlash on social media for their statements on this sensitive topic. Instagram users have called companies out for being hypocritical, or claimed they were taking advantage of the situation for commercial gain.

Some jewelers associate the Black Lives Matter movement with the looting spree that followed Floyd’s death. They might support the anti-racism movement, but social media doesn’t give them time to explain their more nuanced approaches. And independent retailers, often well-known and admired institutions within communities, have feared alienating customers who don’t share their views. So is it better to keep quiet?

PERFECT OR NOTHING? The arguments for being vocal on social issues are clear. Some businesses say their motivation is merely to improve the world.

Many also see long-term commercial benefit in aligning their brands with causes their consumers support — especially when the product is a nonessential and emotional item such as jewelry, notes Brandee Dallow, founder and president of luxury branding 12 AUGUST 2020

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and communications consultancy Fine Girl. “The theory on marketing is that you look at the demands of a consumer, what they need first, and [then] respond by providing something that can positively reflect their needs,” Dallow explains.

However, with Americans holding strong views on certain topics, it’s hard to say anything without risking a backlash, says Elizabeth Austin, founder of Diamond Runway. Sometimes the consequences can be serious.

“There are people who want to find every little thing wrong with something that someone says, and are very aggressive about attacking people for little things that are not perfectly said,” elaborates Austin, whose company helps connect jewelry and gem sellers with collectors. These aggressive reactions are one of the reasons many jewelers have avoided saying anything, as they see little upside in making a statement, she says.

Even Tiffany & Co., an experienced commenter on social and political issues, seemed to trip up in this case. During the height of the demonstrations, it posted a short and simple message on its Instagram page: “We are one community and we #BelieveInLove.” But the statement was “weak,” a follower soon responded, urging the jeweler to “be direct on the message you are trying to convey.” The follower told Tiffany to “try again.”

A day later, it did. In a longer post, Tiffany admitted that it hadn’t “said enough.” It vowed to use its platform to “make a difference” and to “stand with the Black community in the fight against racism,” signing off this time with the hashtag #BlackLivesMatter.

Tiffany wouldn’t say whether there was a connection between the commenter’s response to the initial post and the company’s second contribution, noting only that the series of posts “speak directly to our commitment to the Black community and the fight against systemic racism.” But the episode highlighted the challenges of participating in such a debate.

AVOIDING HYPOCRISY Corporations open themselves up to criticism when the public perceives a mismatch between words and behavior. Cosmetics brand L’Oréal Paris and clothing producer Reformation both had to apologize after their anti-racism posts met with allegations of discrimination within the companies.

The best policy is to ensure all public statements are in line with a company’s true nature, argues David Prager, De Beers’ executive vice president for corporate affairs. That means setting values, operating in accordance with them, and only then speaking up.

For example, De Beers has a relatively diverse senior management team and a strong record of protecting the environment and communities around its diamond deposits.

Meanwhile, its GemFair program aims to improve working conditions for artisanal miners in West Africa.

Following Floyd’s death, De Beers posted a quote by Nelson Mandela on its social media pages and published a letter by CEO Bruce Cleaver expressing solidarity with the Black community.

De Beers even voiced support for a campaign to remove a statue of colonialist Cecil Rhodes, one of the company’s founders, that stands at Oriel College, Oxford.

“De Beers will never talk about anything in the realm of social justice, environmental conservation or gender equality that isn’t hardwired into our business model and strategy,” Prager says.

IMAGES: STOCKSY, SHUTTERSTOCK

TAKING SIDES But is it dangerous to express views that consumers could perceive as political? It largely comes down to what different people consider controversial. A truth for one person might come across as a partisan statement to another.

“There’s a fear sometimes that people have that they don’t want to be political,” comments London-based jewelry designer Melanie Eddy, who produced several Instagram posts supporting the Black Lives Matter movement. “I think that’s a bit of a copout, because to some extent, within our everyday lives, we all have some element of politicization. We all choose certain things to be political about. I think it’s a way to opt out of difficult conversations or difficult content.”

Still, many jewelers are wary of saying anything that could deter customers. “It’s in our best interests to be Switzerland,” says Tiffany Bayley, owner of retailer Avalon Park Jewelry in Orlando, Florida, referring to the European country’s neutrality policy. “It doesn’t matter what your opinion is: There’s still a whole segment of angry people waiting in the wings to rip you to shreds.”

Jewelry stores have an extra factor to consider: In large part, they are a sanctuary for people looking to make a one-off discretionary purchase outside the bustle of normal life. “[Jewelers] bring joy and happiness and continuity,” says Chrysa Cohen, owner of retailer Continental

Jewelers in Wilmington, Delaware. The company posted a quote

by Martin Luther King, Jr., on its Facebook page so people would know the topic was “on our minds,” she says, but didn’t want to do anything more. “Unless you know most of your audience, you just have to be careful not to turn them off.”

Much depends on location and demographics, as well as the business model in question: Most one-person design companies are more likely to put personality into their brands — including by voicing their opinions — than a large jeweler would, according to Angie Marei, a New York-based jewelry designer. “[Major corporations] are focusing on meeting their quotas and then selling and marketing their products,” says Marei. “For me, it’s very personal — I actually know many of my followers on a personal level.”

ASSOCIATION WITH LOOTING The wave of looting that severely affected the jewelry industry at the time of the anti-racism protests has tarnished the reputation of the Black Lives Matter movement among some store owners, Austin notes, and many companies are reluctant to support a movement with connections to such activity.

“A lot of people in the jewelry industry want to see people not be hurt by racism, but they are [put off] by the hashtag ‘Black Lives Matter’ because it has been used [in the media] to excuse looting,” Austin says. “It’s tied to good things and bad things.”

And with jewelers fighting for market share and working on tight margins, the risk of repelling consumers is too strong for many.

“Because it’s such a complicated issue, it’s not worth alienating a percentage of your clientele that would make a critical difference in the bottom line for your store,” Austin says. ◼

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R E TA I L R A P

HOW TO MARKET DURING THE PANDEMIC

The Covid-19 era has left jewelers wondering how to advertise their products without appearing rude or insensitive. Consultant Phillip Bosen shares his tips for finding the right balance.

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

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Is it appropriate for jewelers to market during the pandemic?

Yes, now is when jewelers need business the most. I think it’s the perfect time to increase marketing and market share. There are many jewelers that aren’t going to make it.

IMAGE: SHUTTERSTOCK

Should they advertise in the same way, or should they change their approach?

They should focus on making it more personal.

In my experience, as long as you tie it to an emotion and a sentimental reason to buy jewelry, whether that be an engagement, an anniversary, a birthday, or even not killing each other during quarantine, I feel any of that would be helpful and well-received, and definitely not perceived as tone-deaf.

something you plan is in poor taste or out of line, or not as funny as you thought it would be.

Is it better right now to market only to regular clients, or should you market to everyone?

I would say maybe market 70% to your existing clientele, and 30% to potential new clientele in a very targeted manner. You should really have an avatar of what your dream client looks like.

Every jeweler has their own demographic, and you need to really home in on who that is and market exactly to those people. That’s often through grassroots marketing: You go where they are, where they’re going, or contribute to causes they care about.

Would you use the same marketing for your regular client base as you would for that 30%, or should you change it?

It’s easy to tie emotion to a new bridal or engagement line, but how can you do that with your I think you would market it regular collections? differently. I think you would thank your existing customers for Well, you’ve got to find a way, even their ongoing support and loyalty, if it’s celebrating getting through and of course what you’re partly the pandemic or something like doing there is hoping they will that. Give yourself a reward — you continue to give it to you. But then were homeschooling, working I think to the new 30%, you are from home, getting your PhD in going to tell a story. Tell them who Zoom, etc. You deserve something you are, what you do, and what for that, and I think that’s not to your unique selling proposition is. be ignored.

You can also market yourself, “You absolutely Should you change the types of products which is always appropriate and effective. Those that have a can’t be tone- that you market during this time, maybe gemological degree, or multiple highlight less expensive items given deaf. Hard generations in the business, I think people’s financial situation at the moment? this is the time to build on that and sells and status I think you have to be true to who establish that you are someone you are, and that’s more about selling are people can trust and rely on. the quality of product you sell as probably not a opposed to the price point. But if you do sell some quality products What should jewelers not do when it comes great idea” in lower-range price points, and to marketing? What would absolutely turn you can highlight those in a people off? tasteful way, that might be okay.

You absolutely can’t be tone-deaf. Hard sells and things like status selling are probably not a great idea. I think you can sell status Is any type of marketing better than another at this time? things, but don’t sell them as status, such as For instance, is digital better than print, or vice versa? keeping up with the Joneses or being better I love it when people talk on video, because than the Joneses. it’s more emotional. I think a 15- to 60-second I think there are also times people may video spot could be really powerful. I think think something is okay to say, but it can be it could even be more important than print, perceived the wrong way. In my opinion, it’s because it’s much easier to connect with always best to run all marketing past someone customers on an emotional level when they can else. I would recommend creating a client hear your voice and see your face. It could be as advisory board, but even if it’s just a bunch of simple as the jeweler just saying something like, friends, or you offer to buy a few people a cup “Just because there’s a pandemic, it doesn’t of coffee to sit down for 15 minutes and discuss cancel love. We wish you the best, stay healthy your marketing ideas, feedback from someone and happy, and if you need us, we’re here.” else can be essential in letting you know if bosenassociates.com ◼

CHANGING THE MESSAGE:

RETAILERS WEIGH IN CRAIG UNDERWOOD Owner, Underwoods Fine Jewelers Fayetteville, Arkansas We’ve run some special ads, warmer and more emotionally driven. The TV ad we’ve done is just a little bit more romantic and not as much productdriven.... The time just doesn’t feel right to be trying to push a product.

ED MENK Owner, E.L. Menk Jewelers Brainerd, Minnesota There are two ways of doing things: One is, “Poor me, come in and support me because I’m hurting.” The other is, “Hey, we’re open, we’re here to serve you.” The first one is very disagreeable to me, because everybody is in that situation. I prefer just to say, “I’ve been here for 41 years, I’ve been available to you, and I will continue to be available to you.”

KELLY NEWTON Owner, Newton’s Jewelers Fort Smith, Arkansas I called our marketing team just as soon as we realized exactly how serious this was, and I said, “We have to back off the selling aspect, I want to change the message.” So now we’re showing pictures of pretty things, and sometimes it’s just an American flag with a “stay healthy” message. It’s been very generic, more messages to people than about things.

GEORGE FRITZ Owner, Mills Jewelers Lockport, New York Instead of regular marketing, we’ve had a lot of giveaways. One was to nominate a health-care worker that you would consider a hero, and we chose a winner at random and awarded them a bracelet of hope.

For Mother’s Day, we had a contest asking granddaughters to tell us why their grandmother was so special.

We’ve also done cross-promotions with a local restaurant where we put Easter eggs with prizes such as gift certificates or jewelry in take-out orders from the restaurant, and we’ve posted videos of women coordinating their masks with jewelry.

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THE FINAL CUT

A JOB WELL DONE Rapaport Magazine asks three industry professionals: What accomplishment in your career are you most proud of, and why?

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

ADRIENNE FAY VICE PRESIDENT, BORSHEIMS

I

was named vice president and an officer of Borsheims last year, tasked with guiding Borsheims toward providing an omni-channel experience — meaning that customers shopping online, by phone, or in person would have the same excellent Borsheims experience. Little did I know that I would get a crash course in knowledge as the Covid-19 crisis hit six months after I started my new role! As part of our Covid Crisis Team, I helped make the decision to close our sales floor for a period of time and immediately shift our sales focus to online and over-the-phone orders, with curbside pickup and free shipping. As a sales team, we adapted and leaned into our warehousing, e-commerce fulfillment, and remote clienteling abilities to respond to the changing environment.

The result was a series of recordsetting days for online and phone orders. I’m proud that we were able to continue operating in spite of having the sales floor closed. We stresstested our e-commerce fulfillment abilities and discovered efficiencies that may have taken years to reach.

We guided the reopening of the sales floor with the safety of our employees and customers in mind while focused on providing an authentic Borsheims experience. In my 16 years with Borsheims, these past few months have given us challenges we never anticipated. I love the hand I had in it and the success Borsheims has seen.

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IAN ROWE EXECUTIVE DIRECTOR, DIAMOND DEVELOPMENT INITIATIVE

I

n my 20s, I decided to become a humanitarian aid worker.

It was with the self-assured invincibility of youth that I anticipated departure from the sedentary security of Canada for countries struggling to emerge from legacies of disadvantage, violence and impoverishment. Whatever trepidations I had about leaving behind the Western creature comforts and social safety net were outweighed by the irresistible pull and naive desire to make a mark by contributing to something larger than myself. Little did I realize this would lead to an extensive career bouncing from one conflict zone to another, mostly as a UN frontline worker. Over the next 20 years, I gained firsthand insight into the cruelties of war, its perpetrators, and its impact on the most vulnerable. I negotiated disarmament with warlords in Somalia; I tracked and demobilized Africa’s most vicious rebel groups; I served as a panel expert investigating violations of arms embargo, human rights and international humanitarian law in Darfur; I reintegrated abductees escaping the clutches of armed groups in the Congo; and I led the reduction of gang violence in post-earthquake Haiti. Despite many frustrations and limited successes, I witnessed extraordinary instances of compassion, endurance and perseverance under unimaginably grim circumstances, and it is my collective contribution to these subjugated communities, rather than any single accomplishment, that validates my decision to choose this career path.

NASEEM LAHRI MANAGING DIRECTOR, LUCARA DIAMOND CORP. BOTSWANA

T

he highlight of my career is when I got promoted to managing director of Lucara Botswana. This promotion marked a key milestone for me [as] the first woman and the first Motswana woman to serve in this capacity for a diamond mining company in Botswana. I was then mentioned as the youngest female to run a diamond mine in the world, and a trailblazer in the industry. I am proof that with determination, hard work and not accepting any limitations as a woman, one can achieve great results and perform in a male-dominated field like mining. The road to success is never easy, but for as long as one is determined despite the ups and downs, if focused and purposeful, they can achieve their dreams.

It is an honor, privilege and huge responsibility to hold this title. This role has given me the opportunity to sell and drive the Botswana diamond story, and to be an ambassador to show that Batswana are products of the diamonds mined in Botswana. It has offered me the platform to afford equal opportunity to all Batswana by eliminating any gender discrimination, allowing both men and women to progress equally within our organization. It has enabled me to empower the communities that we operate in to ensure sustainability beyond the life of mine and to enhance the bottom line of both the company and the country due to the nature of the diamond industry in Botswana. ◼