Rapaport Magazine - May 2021

VOL. 44 NO.5 MAY 2021

GREEN IS KING Sustainable sourcing is a point of pride in today’s socially conscious consumer landscape

A NA LYS I S

R E TA IL

ST YLE

CO LLEC TION

WHAT INDIA’S COVID-19 CRISIS MEANS FOR THE GLOBAL DIAMOND TRADE

HOW TO COMBINE VINTAGE AND CONTEMPORARY JEWELS IN YOUR STORE DISPLAYS

IN THE ZOOM ERA, BIG EARRINGS HAVE BECOME THE STARS OF THE SHOW

GRAFF IS LAUNCHING ITS LATEST LINE IN THE US, AND IT’S DAZZLING

CONTENTS VOL. 44 NO. 5 MAY 2021

IN-DEPTH

STYLE & DESIGN

22 JEWELRY

8 NEWS

CONNOISSEUR

Key stories and stats.

30 PAGE

Snake motifs enthralled the ancient Egyptians and Queen Victoria, and continue to charm today’s designers.

10 NEWS ANALYSIS The surge of Covid-19 cases in India will likely lead to polished shortages as demand continues to rise.

24 STYLE Big, swinging earrings are the go-to look as the Zoom era focuses attention on the face.

COVER

27 DESIGNER

12 TRANSPARENT THINKING

People’s enthusiasm for bespoke jewels is on the rise as the pandemic highlights personal values.

The industry saw a slew of responsible-sourcing pledges this past year.

What have companies and trade bodies been doing to achieve those goals?

30 COLLECTIONS

RETAIL

16 RETAIL PROFILE

32 BOOK REVIEW

Innovative design and superb craftsmanship attract an international clientele to Quadrum Gallery in Chestnut Hill, Massachusetts.

Jeweler Fatma Altınbaş takes readers on a breathtaking tour of both her own creations and the wonders of Istanbul.

34 PROFILE NouvelleBox brings together brands, buyers and other industry professionals through its digital showroom and purchasing platform.

36 LEGACY

18 RETAILRAP

Netflix’s Bridgerton is shining a spotlight on Georgian jewelry, and customers are eager to share in the romance of the period.

How to mix modern and vintage jewelry in your store.

39 ESTATE JEWELS A dealer delves into the details of selling antique and vintage pieces with pearls.

40 COLORED GEMSTONE

40 PAGE

2 MAY 2021

DIAMONDS.NET

The spectrum of colored sapphires makes for vibrant and playful styles that tap into the zeitgeist of revolutionary change.

MARKETS & PRICING 43 TRADE REPORT Consumer sentiment up.

44 USA 48 INDIA 49 ISRAEL 50 ANTWERP 51 HONG KONG 52 DIAMOND DATA 57 PRICE LIST 69 RAPNET PRICE LIST 78 DIRECTORY 82 CALENDAR 84 THE FINAL CUT

IMAGES: GRAFF; POLLY WALES. ON THE COVER: TIFFANY & CO. LION BROOCH; STOCKSY

Graff ’s latest line draws on celestial elements that have inspired civilizations since ancient times.

FI EL D N OTE S E M B R AC I N G T H E T H R E E P ’S

W Avi Krawitz SENIOR ANALYST

IMAGE: BEN KELMER

AV I . K RAWITZ @ D IA M ON DS.N E T

hen presented with the chance to participate in the Jewelry Industry Summit on “Jewelry and the Environment,” I faced a challenge. Organizers of the May 5 webinar asked me to address the environmental sustainability claims that critics have made about the industry, and whether they are valid.

As an advocate of natural diamonds, my instinct was to look at the progress the trade has made on this important issue. But the journalist in me suggested that the industry may be lagging when it comes to environmental awareness.

The diamond sector’s corporate social responsibility (CSR) strategy has historically been reactive. It sprang into action when conflict diamonds made headlines in the early 2000s.

The industry has also had to defend itself against campaigns such as Survival International’s efforts on behalf of Botswana’s Kalahari Bushmen, whose habitat was being threatened by the development of a De Beers mine at around the same time.

Today, most large-scale miners engage with the affected communities to ensure their members benefit economically and socially from the prospective projects. And in most cases, companies must present their environmental-impact considerations before receiving a mining license.

Recently, there have been several initiatives by private companies and industry bodies to raise the trade’s sustainability stakes. Many have set a 2030 deadline for meeting their goals. Encouragingly, the dialogue is diversifying from a focus on the social and human impact to include environmental considerations as well.

Our hope is that these declarations are not just public relations exercises, but the start of an industry-wide effort to make a real difference. We need to use our profit for the betterment of our people and our planet — to borrow from the proverbial three P’s of sustainability.

The feature story in this issue of Rapaport Magazine highlights that outstanding corporate citizenship is not only ethically correct, but good for business. Consumers want to engage with principled companies, and they want to buy products that align with their own values.

It is our role as journalists to steer that conversation and provide a forum for debate. As the trade fine-tunes and accelerates its CSR initiatives, we’ll be able to advocate for diamonds with increasing confidence in today’s demanding consumer environment.

DIAMONDS.NET

MAY 2021 7

N E W S A N A LY S I S

VOLATILITY LOOMS AMID INDIA’S COVID-19 CRISIS The surge of new coronavirus cases in the world’s main diamond manufacturing hub will likely result in polished shortages as demand continues to rise.

B Y AV I K R AW I T Z

COLIN SHAH

CHAIRMAN, THE GEM & JEWELLERY EXPORT PROMOTION COUNCIL (GJEPC)

“We went through a period of extreme stress last April when the pandemic hit, but we managed to work together and came back strongly.

Now again in April, we need to stay united, and we will prevail again.”

T

he dramatic spike in Covid-19 infections in India has injected uncertainty into the diamond market. As the country struggles with the severe humanitarian crisis, the industry has reduced its manufacturing and trading activity significantly.

The rate of new daily coronavirus cases started to rise in mid-March and escalated rapidly. That left hospitals stretched beyond capacity, without enough beds, oxygen or doctors to cope with the unprecedented influx of patients.

The country recorded a world-record number of new cases for several days, peaking at 362,902 as of press time on April 27, according to statistics website Worldometers. In total, more than 18 million people in India have been infected and over 200,000 have died since the pandemic began.

The central government is working to get more supplies to the country and to accelerate the vaccine rollout, while the various state governments have implemented rules to help curb the pandemic’s effects. In Maharashtra — the state containing the major diamond trading hub of Mumbai — the latest restrictions allow only essential services to

SATHI NAIR

MANAGING DIRECTOR, RAPAPORT INDIA

“The rising Covid-19 cases and lockdowns are impacting the diamond industry. Our priority is to ensure the health and safety of our community. We have seen challenging times before and have endured. As we adjust our operations and take all necessary precautions, we are confident that the trade will emerge from this crisis even stronger.”

10 MAY 2021

DIAMONDS.NET

operate. Exports and imports of commodities fall under that category, meaning the diamond sector was able to carry on after the rules went into effect, reported the Gem & Jewellery Export Promotion Council (GJEPC) late last month. Similarly, Suratbased manufacturers continued to operate despite Gujarat state’s rising numbers.

Still, the diamond market has felt the impact.

Companies have reduced capacity and adhered to social distancing requirements. About 25% of workers remain absent, as they or their family members were infected or had to quarantine for other reasons, explains GJEPC chairman Colin Shah in an interview. Many also returned to their rural homes during the lockdown period.

CUTTING DOWN Diamond manufacturing in India has fallen by 30% to 40%, according to executives who spoke with Rapaport Magazine. Cutters have shifted their focus to higher-value and more profitable certified diamonds rather than the large volume of small goods that typically sustain India’s polishing industry. While the country manufactures an estimated 92% of the world’s diamonds, the drop in output has fueled speculation about pending shortages — especially since polished demand remains robust.

Shah is expecting to gain better insight into the market’s prospects after Mother’s Day on May 9.

“If Mother’s Day sales are good, we may run into shortages of a few items if manufacturing stays at lower levels in May and June,” he predicts. “But if we start to see a [Covid-19] recovery toward the end of May, as is anticipated, and Mother’s Day is normal, then I think things will be okay.”

He notes that there are too many moving parts to say for sure at this stage.

QUESTIONS OF SUPPLY Meanwhile, manufacturers have goods in the pipeline, having bought high volumes of rough in

the first quarter (see graph). A backlog of more than a month has developed at the Gemological Institute of America’s (GIA) Mumbai and Surat grading labs due to the restrictions.

Polished inventory levels have consequently declined in key categories. For example, the number of round, 1-carat, G to J, VS to SI diamonds on RapNet fell 11% between February 26 and April 26.

In the last month, the volume of 0.30-carat, G to J, VS to SI goods on the trading platform slid 23%.

All of this means the diamond industry can expect supply volatility in the short term.

For now, the volumes on RapNet are still reasonable; there appear to be enough available goods to satisfy demand over the next month, given that orders tend to slow at the start of the summer.

But with little new supply coming through the system, inventory levels are expected to decline further during May. If India’s Covid-19 situation improves toward the end of May, as some forecast, there will be an influx of goods to the market in June or July as the GIA reduces its turnaround time. The GIA should deplete its backlog fairly quickly, since there will be fewer new submissions to grade due to the current drop in manufacturing levels. Shortages may appear around September as demand improves for the holiday season.

FAMILIAR CYCLES A similar pattern occurred in 2020.

Last year, manufacturing and rough purchases froze from April through June after the virus started spreading globally. Polished suppliers focused on selling in the interim, allowing them to deplete inventory that had previously been difficult to move. Shortages emerged around August as jewelers began placing orders for the holiday season, driving a sharp recovery in polished prices and enabling manufacturers to profit from their rough purchases.

A year later, demand is once again set to outstrip supply. Manufacturers will likely exercise restraint

RAPAPORT TRADE ALERT

I

ndia is undergoing a severe Covid-19 crisis that will impact the global diamond trade.

India manufactures about 92% of the world’s diamonds. While the Indian government is doing everything possible to support continued diamond manufacturing and exports, shortages and price volatility are expected to intensify over the next few months.

This is a good time to support Indian suppliers. The disruption to the supply chain will be significant once current goods being processed by the GIA are put on the market. We anticipate a 30% to 40% reduction in Indian production during the months prior to the holiday season.

Our hearts and prayers go out to the Indian diamond community. May they stay safe and recover swiftly.

40%

Diamond manufacturing in India has fallen by an estimated 30% to 40% since the latest Covid-19 restrictions went into effect in April

in the rough market because of their factory limitations, while the outlook for polished demand is even higher than in 2020. The market recovery is robust in the US and China, thanks to continued growth in e-commerce coupled with consumer excitement to get out and shop again.

That paints a favorable picture for Indian manufacturers and the global diamond trade in the second half of 2021, since the expected polished shortages will support prices and improve margins.

But with Covid-19 continuing to influence the market in unpredictable ways, the trajectory is unlikely to be smooth. ◼

TOM MOSES

EXECUTIVE VICE PRESIDENT AND CHIEF LABORATORY AND RESEARCH OFFICER, THE GEMOLOGICAL INSTITUTE OF AMERICA (GIA)

“The dire circumstances facing the people of India are of much greater concern than the potential short-term impact on the diamond industry.

As we’ve seen from the increase in retail demand, the global diamond sector will recover. The GIA will continue to do all we can to fulfill our mission by completing services quickly, while fervently hoping for a quick improvement for our friends and colleagues in India.”

INDIA’S DIAMOND TRADE RECOVERED FROM THE LOWS OF APRIL 2020 BASED ON DATA FROM THE GEM & JEWELLERY EXPORT PROMOTION COUNCIL (GJEPC) $2,500

$ Millions

$2,000 $1,500 $1,000 $500 $-

NET POLISHED EXPORTS NET ROUGH IMPORTS

THE FINAL CUT

WORDS (NOT ) TO LIVE BY Rapaport Magazine asks industry insiders: What lessons have you learned from bad advice?

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

REENA AHLUWALIA JEWELRY DESIGNER

I

was once advised to give my Reena Ahluwalia brand name stamp to a huge luxury brand in design collaboration to gain more visibility and make quick and big profits. It was bad advice from the start, because not all creative talent can be bought just for fame or money. Not only did that luxury brand and I have different creative paths, I felt serious sustainability and ethical issues. I said no to that offer. Soon enough, that luxury brand ran into legal issues. As a jewelry designer, I have collaborated on design with other brands, diamond mining companies, and organizations to elevate our shared vision. But I choose cautiously. For me, integrity is paramount in all things I do. Folks know my deep commitment when I take on and give my name stamp to something I believe in — one of the secrets of my longevity and respect in the diamond and jewelry industry.

ANDRE A HILL OWNER, HILL MANAGEMENT GROUP

I

arrived at a jewelry company after running companies in several other industries. I was accustomed to learning new product lines and technologies, and studying the inevitable peculiarities that one encounters in a new field. But I was advised within my first few weeks to “throw out everything you know about business. The jewelry industry is that different.” It was terrible advice, and I’ve encountered it many times since then. That kind of exceptionalism leads to failure to study and master important business disciplines like organizational design, strategic planning, brand and marketing strategy, sales organization design and strategy, and the management of operations, production and logistics. These disciplines benefit from tremendous innovation and knowledge across sectors, and the jewelry trade can gain from that wisdom.

84 MAY 2021

DIAMONDS.NET

SA M HINES SENIOR DIRECTOR AND WORLDWIDE HEAD OF WATCHES, SOTHEBY’S (HONG KONG)

W

e have had collectors who buy bad-quality watches because they are cheaper than great quality. Fifteen years ago, one of the biggest collectors of vintage watches in the world would sometimes pay 50% to 100% more than the market price for the very best quality.

At the time, everyone said he was mad to spend so much. Ten years later, he sold the collection and achieved prices beyond everyone’s expectations, including the world record price ever paid for a wristwatch.

Experience has shown me that those who are not afraid to pay for the best quality will always be rewarded.

Always buy the very best quality that you can afford when collecting in any category. What we see happening here is that bad quality continues to go down in value and is worth less than [the collector] paid 10 years prior, if anyone wants it at all.