Rapaport Magazine - February 2020

VOL. 43 NO.2 FEBRUARY 2020

SAME DNA, DIFFERENT VALUE? Lab-grown diamonds are popular with price-conscious consumers, but they’re also making inroads in the luxury space

Cover.indd 1

RETAI LRAP

ST Y L E

DE S IGN ER

COL L ECT I O N S

BEING A CENTRAL PLAYER IN THE LOCAL COMMUNITY IS A SURE WAY TO WIN OVER CLIENTS

THE LATEST JEWELRY TRENDS ROCKING THE CATWALK, FROM CHOKERS TO PEARLS

HOW FOUNDRAE CAPTURES THE CONTEMPORARY DESIRE FOR MEANINGFUL JEWELS

A LOOK AT THE BOIVIN STARFISH BROOCH, WHICH RECENTLY BECAME A MUSEUM RESIDENT

1/30/2020 12:09:40 PM

CO NTE N TS

VOL. 43 NO.2 FEBRUARY 2020

IN-DEPTH

RETAIL

14 NEWS

34 RETAIL PROFILE

Signet sees success; Louis Vuitton buys a 1,758-carat rough diamond; GEM Awards; Movers & shakers.

Custom bridal is the focus of Green Lake Jewelry Works in Seattle and Bellevue, Washington.

COVER

18 COVER

Retailers: As lab-created diamonds become more mainstream, the decision to buy them is more about cost than sustainability for many consumers.

Marketing: Companies are branching out when it comes to marketing synthetics, with angles including size, quality and ethics.

Profile: Luxury brand Courbet is shaking up Paris’s high-end jewelry scene by putting labgrown front and center at its Place Vendôme showroom.

36 RETAILRAP How to build a strong community.

STYLE & DESIGN

38 JEWELRY CONNOISSEUR Carved in stone or shell, cameos are making a comeback.

40 STYLE Pearls, gold, and necklaces long and short are some of the top runway trends for 2020 as the 1970s and ’80s bounce back into the collective consciousness.

26 AUCTION REPORT

44 DESIGNER

Sotheby’s and Christie’s Magnificent Jewels sales in New York: Analysis & results.

Former women’s-wear exec Beth Bugdaycay talks about her inspirations for Foundrae, the symbol-centric jewelry brand she launched in 2015.

50 PAGE

40 PAGE

46 LEGACY A collection of aesthetic and mechanical marvels from the royal courts of 16th- to 18thcentury Europe is on display at the Met in New York.

48 COLLECTIONS The Boivin Starfish brooch is a masterpiece of design and execution.

49 ESTATE JEWELS Jewelry historian Vanessa Cron is set to launch ResearchJewel, an online database of maker’s marks to aid authentication of vintage pieces.

MARKETS & PRICING 53 TRADE REPORT January sees mild recovery.

55 USA 60 INDIA 61 ISRAEL 62 ANTWERP 63 HONG KONG 64 DIAMOND DATA 69 PRICE LIST 81 RAPNET PRICE LIST

50 COLORED GEMSTONE

Available in a rainbow of shades, spinel was a favorite in Persian culture and commands high premiums on today’s market.

86 DIRECTORY 90 CALENDAR 92 THE FINAL CUT

DIAMONDS.NET

Contents.indd 1

FEBRUARY 2020 7

1/30/2020 4:52:28 PM

N OTE FROM TH E P U B L I SH E R S H A R I N G T H E W E A LT H O F JEWELRY KNOWLEDGE

John Costello PUBLISHER J OH N .COST E L LO @ DI AMONDS.NET

W

hen you think of Rapaport, you most likely think of diamonds and diamond pricing. But if Rapaport were an iceberg, this would be only the tip. For more than four decades, Rapaport has become synonymous with the diamond industry. Along the way, it has picked up a lot of knowledge, and this has placed us in a unique position in the trade.

We truly believe the more information a business has access to, the more informed it is and the better decisions it will be able to make. “Information That Means Business” has been a driving mantra at the heart of Rapaport for many years, and this information stretches far beyond diamond pricing.

Since we are always seeking new ways of spreading knowledge and expertise, we are thrilled to be launching our new email newsletter, Jewelry Connoisseur. There is little value in understanding the diamond industry in isolation from the jewelry sector. Jewelry and its trends provide critical insights for diamantaires, and our new weekly newsletter will ensure you stay up to date on all the latest jewelry news and developments.

Every week, Jewelry Connoisseur features profiles of leading designers and pinpoints the elements inspiring styles and wooing consumers in the industry. It spotlights a vibrant range of subjects to keep you in the know about contemporary fine and high jewelry, estate jewels, current exhibitions, jewelry history, gemology, practical issues in the trade, and many other topics.

The Jewelry Connoisseur newsletter is an extension of our blog at jewelryconnoisseur.net and complements not only the exceptional jewelry content of Rapaport Magazine, but also our excellent @rapaportmagazine Instagram account.

Join us by subscribing to Jewelry Connoisseur and tune in to Rapaport’s take on the jewelry sector. Your business and your brain will thank you.

IMAGE: BEN KELMER

jewelryconnoisseur.net

DIAMONDS.NET

Note from the publisher.indd 1

FEBRUARY 2020 13

1/30/2020 4:59:18 PM

COVER

GROWING ACCUSTOMED As lab-created diamonds become more mainstream, the decision to buy them is more about cost than sustainability for many consumers.

BY LARA EWEN

18 FEBRUARY 2020

Cover story pt1 Retailers.indd 1

DIAMONDS.NET

1/30/2020 11:43:29 AM

L

IMAGE: TRUNK ARCHIVE

ab-grown diamonds are no longer the new kid on the block, and it shows. Early adopters of labgrown now compete on pricing and customer acquisition with retailers that are newer to the field but no less prepared to give shoppers what they want. While a significant number of stalwart store owners refuse to sell them, consumer acceptance of lab-grown is only increasing.

A year ago, some industry experts predicted that the introduction of De Beers’ Lightbox jewelry line would get more consumers talking about labgrown, but that doesn’t seem to have happened.

“People don’t mention Lightbox, but I know labgrown is fully acceptable now,” says Rick Hamann, executive vice president at Sartor Hamann, which has three stores in Nebraska. “It’s not weird or unusual.”

Joseph’s Custom Jewelry, which has two stores in Washington state, began stocking lab-grown stones four years ago — well before Lightbox was introduced — because of client requests, according to Anthony Hoag, store manager of the Seattle branch. “When clients asked for lab-grown, we saw other jewelers around us weren’t willing to help, so we said, why not?” he explains.

Customer requests are also why Amy Astaraee, owner of Brax Jewelers in Newport Beach, California, started carrying lab-grown in 2018. “If we can make money, why not?” she says, echoing Hoag. “I had customers who said other stores didn’t even want to talk about lab-grown. But for me, I bring whatever my customers ask for.”

She currently stocks a minimal number of such stones — they’re only 2% or 3% of her inventory — but doesn’t advertise or market them, and always keeps them away from the rest of her stock.

NOT RUSHI NG I N Without a significant push from customers, though, many retailers are still waiting to see how the market develops.

“I do not currently stock lab-grown diamonds, but I’m not opposed to them,” says Rich Goldberg, third-generation owner of Safian & Rudolph Jewelers in Philadelphia, Pennsylvania, and current president of Philadelphia’s Diamond Row. “Realistically, I’m a retail store that’s here to take care of my customers and sell product. Over the holiday season, we had maybe a half-dozen calls for lab-grown, and we sold a few, and I have a couple of suppliers. But we’ve not had strong demand for lab-grown.”

There are also retailers who are firm in their decision not to sell lab-created stones for any reason. ▶ DIAMONDS.NET

Cover story pt1 Retailers.indd 2

FEBRUARY 2020 19

1/30/2020 11:43:34 AM

COVER

“Do they really care that mined stones were down there [in the ground] for millions of years? No. Mostly they couldn’t care less” “I can’t sell [lab-grown] in good conscience,” says Bill Jones, owner of Sissy’s Log Cabin, which has five stores in Arkansas and Tennessee. “We don’t sell them, and we’re not going to sell them.

They’re of no value. They’re just an expensive cubic zirconia (CZ) as far as I’m concerned. And they’re not going to escalate in value.”

In fact, Jones feels stocking lab-grown would be damaging to his selling proposition. “We lose a lot of romance in what we’re selling by cheapening what it is.”

10%

Lab-grown is expected to account for 10% of the global diamond market by 2030, according to Statista 20 FEBRUARY 2020

Cover story pt1 Retailers.indd 3

WH ER E OT H ER S WO N ’ T TREAD Attitudes like these are fine with Matt O’Desky, owner of Texas-based jeweler The Diamond Room.

He’s been selling lab-grown stones for four years, and says stores that refuse to carry them are doing him a favor. “I would have more challenges selling lab-grown,” he remarks, “but thanks to all the stores bashing them, it makes our job easy.”

That’s not to say there are no challenges.

The biggest hurdle, he says, is that there’s a pronounced lack of inventory available in larger sizes. He also cites consumer education as an issue.

“We get a lot of feedback from customers who are convinced that there are so many of these lab-grown stones out there, because they were educated in stores that don’t sell lab-grown,” he says, adding that it’s a misconception that labgrown means “mass-produced.”

O’Desky shows his lab-grown and mined stones side by side. “Anyone who’s not looking at both is doing themselves a disservice, because they’re the same product,” he asserts. “I got bashed when I first started, but more people want lab-grown once they get a non-biased education.”

Recently, O’Desky — whose company has locations in Austin and Dallas — has found that lab-grown sales are significantly outpacing his mined sales. “I’m pretty sure the majority of stones we sold in 2019 were lab. In October 2019, we didn’t sell a single mined stone.”

MO R E BANG FO R T H EI R BUC K Hoag says 10% of his customers come in specifically looking for lab-grown, but for those who aren’t predisposed to lab-created diamonds,

the decision to steer away from mined ones is ultimately about price. “With lab, it’s possible to give you a bigger diamond and still stay within your budget,” he says. While his stock is still 90% mined stones, he reports that his lab-grown inventory is increasing.

“And do they really care that mined stones were down there [in the ground] for millions of years?” asks Hoag. “No. Mostly they couldn’t care less.”

Hamann, who has been selling lab-created diamonds for five years, also focuses on providing value. “It’s bang for their buck,” he says. “They can get a 2-carat lab-grown for $7,000 versus $11,000. Mined is typically 30% to 50% more.”

In Austin, O’Desky takes a similar approach.

“If customers are looking for a 3-carat lab-grown in a fancy shape, I can say, there’s three stones in your size and shape available now. And if people don’t mention lab when they come in, I tell them about it and help them understand that this isn’t moissanite and it’s not CZ. This is the same as a mined diamond, just created differently.”

It’s an approach that seems to be working.

“Half the people reaching out to us are looking for lab,” he reports. “And those that come in not knowing about lab end up buying lab about 50% of the time.”

In addition, Hamann claims lab-created goods are more aesthetically appealing. “The actual material on the lab is visibly better, meaning the rough they use looks brighter to the customer and to our salespeople, unless we’re talking Hearts on Fire [branded diamonds], or super ultra highend makes. Lab-grown just looks better to the naked eye.”

THE ETHI CAL SI DE For O’Desky, the ethical and environmental aspects of lab-grown are a non-issue when it comes to sales. “I don’t touch the ethical part, for the same reason I don’t touch it from the mined perspective,” he says. “I’ve read that there’s a larger carbon footprint with lab. And if customers want to look at it as an ethical footprint, fine.”

But Hamann is certain ethics are at least part of the picture for many of his customers. “Even after all these years, they mention the Blood Diamond movie,” he relates, referring to the 2006 film starring Leonardo DiCaprio. “The blood diamond thing is a factor. And it’s not just kids. Those ‘kids’ are in their 40s and 50s.”

Astaraee agrees that “there’s a certain percentage of customers who specifically want lab-grown for ethical reasons and not because of the price” — though she adds that demand at her store is waning. “At the beginning of 2019, we had

DIAMONDS.NET

1/30/2020 11:43:38 AM

IMAGE: SHUTTERSTOCK

a lot of customers asking about lab-grown. Then it slowed down, with fewer calls, and not as many people interested.”

Even retailers who don’t deal in lab-grown end up having to talk about the ethical implications of their inventory.

“The average person looking for lab-grown does not seem to be wooed by the environment issue so much as the bottom line,” says Goldberg.

“Many customers like the conflict-free aspect, but I already stock only conflict-free natural diamonds.”

‘ T H E P R I C E S WILL GO DOWN’ Astaraee thinks the drop-off she’s been seeing in lab-grown demand is a combination of price instability and increased competition from other retailers.

“A lot of vendors who are selling lab-grown are competing on the prices, and online is flooded with so many lab-grown stones at low prices — as much as 20% or 30% less than my cost,” she says.

“With mined diamonds, there’s a limit to how low you can go in price, but there’s no limit with lab-grown. I had one customer who was looking for 4-carat studs and was [considering] labgrown.... I told her I’d rather have her just wait a

little, because I didn’t feel comfortable selling her something that would drop in price.”

Goldberg agrees that the desire for lab-grown is mostly about price. “The market has become so competitive that a lot of retailers are looking for a way to get an edge. It’s like when retailers went for silver a few years ago.”

But while he’s “not opposed to selling someone what they want,” he says, “I’ve never liked the approach of going cheaper just to try and survive.

That’s not my brand.”

Jones acknowledges that laboratory-created stones have their place in the industry, but he, too, worries about price fluctuations and likens lab-grown diamonds to synthetic rubies and emeralds, as well as moissanite. “I know it’s a profit center for certain people, but if they’re selling at $800 a carat now, they’ll only get cheaper, and every year they’ll go down somewhat,” he says. “Just like the computer chip.”

Yet the retailers who are doing well with labgrown tell a different story.

“I don’t think lab-grown will take over, but it’ll always be another option,” says O’Desky. “Some people will bash it until they’re dead, and tell their sons and daughters to do the same. But I bet the number of jewelers selling lab-growns now is about 5%. If it were 40% of retailers, we couldn’t do it, because there’s not enough labgrown stones available.”

While the category currently represents only a fraction of the market, its growth and its tenacity mean its true impact on the industry may not be felt for many years.

“Lab-grown will take over a huge portion of the industry, and the prices will go down,” predicts Hamann. “That’s not good for anyone, but it is what it is. We can’t control what the consumer wants, but we need to provide what the consumer wants. And if you’re in an area with a lot of younger people, to them lab is a good alternative.

Sometimes it’s just what they want.” ◼ DIAMONDS.NET

Cover story pt1 Retailers.indd 4

POINT BY POINT • Lab-grown diamonds currently account for approximately 2% to 3% of the world’s rough-diamond market, totaling an estimated $280 million to $420 million in sales.

• The number of labgrown diamonds in the global diamond market is increasing each year, with market share expected to reach 10% in 2030.

• By the end of 2023, the global market for lab-grown diamonds is expected to be worth $27.6 billion.

• Only about 10% of revenue for lab-grown diamonds comes from jewelry, with the rest coming from industrial use.

• The cost of growing diamonds in a lab has dropped by an estimated 90% in the past 10 years, and is now about 30% lower than the cost of mining a gem of similar size and quality.

• Overall capital costs for lab-grown diamonds are only negligibly lower than mined diamonds, currently amounting respectively to $343 and $367 per carat.

Sources: Robb Report, Statista, Research Nester, ifanr.com, Leadleo Research Institute, Morgan Stanley

FEBRUARY 2020 21

1/30/2020 11:43:52 AM

THE FINAL CUT

BETWEEN THE ETERNAL AND THE EPHEMERAL Boasting 400 jewels, watches and precious objects, the “Van Cleef & Arpels: Time, Nature, Love” exhibition presents the 114-year-old French maison’s high-jewelry creations in Italy for the first time. Here are some of the highlights.

ZIP NECKLACE , 19 51 One of the most iconic jewels by Van Cleef, the Zip necklace also represents one of the jeweler’s most avant-garde creations. Its origins go back to the 1930s, when the duchess of Windsor apparently suggested the idea of a zipper-inspired jewel to Renée Puissant, the maison’s artistic director. Sliding the necklace’s gem-set tassel transforms it into a bracelet.

This specific piece is among the first of its kind that Van Cleef & Arpels created.

BALLERINA CLIP, 1945 Louis Arpels’s passion for ballet and the opera inspired the creation of the first ballerina clips in 1941 in New York, and in Paris the following year. This motif is repeated on a variety of objects, from bracelets, earrings and necklaces to cufflinks, boxes and corset buttons. The face, always made with a rosecut diamond, lightens the ballerina’s silhouette, with her elaborate dresses of golden tulle or precious-gem pavé.

SPIRIT OF BEAUT Y FAIRY CLIP, 1941 This is the first example of a fairy clip by Van Cleef & Arpels, representing the house’s enchanted universe and symbolizing joy and hope. This piece was acquired by Countess Haugwitz-Reventlow, otherwise known as Barbara Hutton.

PIVOINE CLIP, 1937

MINAUDIÈRE VOLUTE , 1935 The inspiration for this daytime/nighttime clutch was Florence Jay Gould, the wife of railroad tycoon Frank Jay Gould. After seeing her put all her vanity items in a cigarette case, Charles Arpels had the idea of creating a luxurious case with an ingenious compartment system. Its features include space or a compact, a lighter, a tortoiseshell comb and a pill box.

92 FEBRUARY 2020

The final cut.indd 1

IMAGES: PATRICK GRIES

An example of a Van Cleef & Arpels mystery setting, this platinum and yellow gold clip features rubies and diamonds.

Formerly part of the collection of Princess Faiza of Egypt, it was acquired by Jacques Arpels at Christie’s in 1985.

DIAMONDS.NET

1/30/2020 11:05:16 AM