Rapaport Magazine - October 2018

VOL. 41 NO. 10 OCTOBER 2018

RING IN THE HOLIDAYS

What’s in store for the festive season? Retailers, manufacturers and designers share their expectations

PROFILE

INSIGHT

DESIGNERS

GEMSTONE

Kering-owned Pomellato brings Italian flair to its shiny new flagship store in Beverly Hills

Want to attract Chinese consumers to your luxury store? It’s all about branding, experts explain

Meet three women who are using their jewelry skills to make the world a better place

It’s as beautiful as it is rare: Paraiba tourmaline is turning heads and increasing in value

CO N T E N TS IN-DEPTH 16 News

Industry: The eye of the storm.

Retail: T Mark, Tiffany & Co., Lightbox.

Mining: Murowa joins the DPA. Movers & Shakers: Who’s coming, who’s going.

RETAIL 34 Retail profile Pomellato brings its European craftsmanship and distinctive designs to its new flagship store in Beverly Hills.

36 Retail insight

50 Legacy Prince Albert gifted Queen Victoria with beautiful jewelry throughout their marriage, and much of it was of his own design.

52 Colored gemstone The rarity of Paraiba tourmaline is why prices for it are skyrocketing.

46 Page

Chinese tourists and expats are a burgeoning market for luxury, but retailers have to get their branding right.

39 RetailRap How are you maximizing the in-store experience?

COVER 24 Wrapping up Are the holidays still a make-or-break time for independent jewelers? And what can one do to make the best of a busy season?

28 Making the months count Christmas only comes once a year, but wholesalers need to focus on business all year long.

30 The gift of style

IMAGES: OMI PRIVÉ; ARTICLE 22

Top creators, trend experts and design houses weigh in on what jewels you’ll want in your cases come fourth quarter.

ON THE COVER

Omi Privé ring in platinum and 18-karat rose gold, featuring a 22.45-carat oval spessartine garnet and 1.37 carats of round diamonds. omiprive.com

STYLE & DESIGN 41 Jewelry Connoisseur Alternative settings can give gems a chance to dazzle.

42 Book review James Sherwood tells the story of men’s jewelry, from the sixth century BCE through today’s revival.

44 Style Shamballa’s envelope-pushing designs and unusual engraving techniques have earned the brand its place as a trailblazer.

MARKETS & PRICING 57 Trade report 59 USA 64 India 67 Israel 69 Antwerp 70 Hong Kong 72 Diamond data 77 Price List 89 RapNet price list

46 Designers From repurposing weapons to putting charity front and center, three female jewelry creators are on a mission to further social responsibility across the world.

94 Directory 98 Calendar 100 The final cut

DIAMONDS.NET

O C TO B E R 2 01 8 7

Note from the publisher Hanging our hopes on the holidays

T

IMAGE: BEN KELMER

o date, 2018 could be categorized as the “almost” year. After suffering a rollercoaster ride of a few highs and many lows since the economic crash a decade ago, the diamond and jewelry industry has enjoyed greater stability, and even cautious optimism, over the past 10 months. So while it appears the sector has “almost” pulled itself out of the doldrums, it is still looking for a definitive sign that would allow its cautious optimism to blossom into something more tangible.

Earlier this year, there was great anticipation that the major trade shows would solidify belief in an upward trend. However, June’s Las Vegas show failed to deliver, and September’s Hong Kong fairs proved disappointing (thanks in part to a typhoon disrupting proceedings).

So now, the hopes of the industry hinge on the rapidly approaching holiday season. If successful, it will provide the much-needed definitive proof of our industry’s economic vitality. And the signs are looking good.

Forecasts show a thriving holiday business, with buying boosted by a buoyant stock market that was hitting record highs yet again in early October. As another bull market quietly rages on, the US economy is doing extremely well, boasting strong fundamentals: Unemployment is currently below 4% (its lowest level in 18 years); more than 200,000 jobs are being created each month; and inflation has hit the Fed’s target level of 2%. The combination of low unemployment and low inflation is fueling hopes that the US economy will continue expanding throughout 2019.

This is good news for a jewelry market that has already been growing at 5% to 6% per year, and that saw Americans spend almost $77 billion on jewelry and watches in 2017. A strong performance in the final quarter of 2018 could push that figure well past $80 million for the year, giving us all a reason to be happy this holiday season.

John Costello PUBLISHER

john.costello@diamonds.net DIAMONDS.NET

O C T O B E R 2 0 1 8 13

COVER | RE TAIL

G N I

P U

t en on? d en eas p de sy s n i or a bu f e f o m i t t es k b a re the b -or ake e ak to m E N m o A EW a d l til one L A R s BY ys can a d oli hat h he nd w t e Ar rs? A le e jew

P P

A R W 34 O 24 SE CPTTOEBMEBRE2R021 8 01 8

DDI A I AMMOONNDDSS. N. NEETT

P

“It’s a difficult way to run a business, but it’s very typical.

On average, jewelers do about 10% of their annual revenue in November, and 22% in December. And that’s not only jewelry. It’s most retail.”

But the landscape is changing. “Christmas is still a magical time of the year for our stores,” says Steve Quick, owner of Steve Quick Jeweler, which has three Chicago-area stores. “[But] we don’t post the amazing numbers we used to every year now. What’s changed is that the other industries we compete with have gotten great at marketing, and our industry has not kept pace.”

The jewelry category is up against phones and electronics when it comes to attracting holiday dollars, he points out.

“Jewelry is still in the dark ages in terms of creating that kind of retail hysteria.”

Yet businesses depend on the extra income the holiday period brings in. “Christmas is still an important time of the year,” says Kevin Gorkofsky, owner of Kevin Edward Jewelers in Avon, Connecticut. “You get the bulk of your traffic, and it’s condensed into four weeks. We’re doing about 20% of our business at Christmas these days. It was more than that years ago, but today, people buy all year long. If they see something in June, they buy it in June.”

oliday traditions run deep among independent jewelry retailers. Stores get decked out in Christmas ornaments; mailers go out to customers; inventory gets polished and display cases get shined. And store owners hope that the brief holiday sales period will bring in as much as 20% BEING SMART ABOUT STOCK to 30% of the year’s total haul. But for an industry that’s Many stores make the bulk of their holiday been impacted by online sales, smaller margins, an buys at shows such as JCK. But filling increase in labor-intensive custom orders, and a trend of up on inventory so far in advance can shoppers spending less on traditional diamond be challenging. pieces, December might be less dependable “When you go to the jewelry shows, than it used to be. you have to be a very smart buyer,” Still, it’s not all bad news. A says Gorkofsky. “Try to pick up MasterCard SpendingPulse survey on what the trend is going to be, and watch your from early this year found that holiday inventory. You don’t want to be stuck with a lot jewelry sales in the US were up 5.9% of product in January.” in 2017, buoyed by a last-minute Being over-inventoried is an avoidable THE RISE IN US HOLIDAY surge the week before Christmas. problem, though. If store owners can take a That growth is cautiously predicted hard look at their past Christmases, they should JEWELRY SALES IN 2017, to continue for the overall retail sector be able to assess their needs moving forward.

AS PER MASTERCARD through the 2018 holidays, according to “I’ve been at this for 30 years, and it seems like SPENDINGPULSE an August report from the National Retail so many Christmases, after it’s all over, I have so Federation. This bodes well for the stores that much merchandise,” says Doug Jones, owner of Dale’s are still counting on a big end-of-year boost.

Jewelers in Idaho Falls, Idaho. “It’s hard not to overbuy, but look at the volume you’re doing. Don’t go too crazy buying. You

5.9%

THE BULK OF BUSINESS

Most jewelry stores still lean heavily on holiday sales, says Bill Boyajian, founder and CEO of consulting and coaching company Bill Boyajian and Associates, which specializes in working with the jewelry industry.

“Christmas is still the most important time for most independent retailers, but there has been a little bit of a shift in the last number of years, mainly because a lot of stores are doing more bridal and custom work,” says Boyajian, who has also served as president of the Gemological Institute of America (GIA).

Many jewelers run a loss for much of the year and depend on Christmas sales to give their bottom lines a boost, he adds.

“TRY TO PICK UP ON WHAT THE TREND IS GOING TO BE, AND WATCH YOUR INVENTORY” DIAMONDS.NET

O C T O B E R 2 0 1 8 25

COVER | RE TAIL

don’t need to have a ton of merchandise in today’s world, and people will wait a day or two to get the diamond they want.”

20%

WHAT TO SELL?

The merchandise mix for the holidays should take into account both current trends and customer budgets, jewelers suggest.

STORE OWNERS HOPE THE “People want to HOLIDAY PERIOD WILL buy jewelry they can BRING IN 20% TO 30% OF wear every day,” says THE YEAR’S TOTAL HAUL Gorkofsky. “Layering pieces, wearable jewelry.

Naturally, you need the bigger pieces, too, but for Christmas, you want to stock the everyday gift.”

He says the sweet spot for his holiday customers is usually in the $300 to $600 range. “[That price point] is easier for disposable income,” he explains. “You’re gonna get those $10,000 and $20,000 sales, too, especially if you sell engagement rings, which add up fast. But you still need product at a good price point so you don’t scare people away.”

For Jones, color is an important part of holiday sales as well.

“Color is trending,” he observes. “Last year before Christmas, we spent so much time stocking our diamond wallet, but color sold. Even pearls.”

Last year was the first time he sold more color than diamonds at Christmas, he adds. “A lot of jewelers have become addicted to the bridal department and have forsaken the fashion and color areas. But you have to know how to sell fashion, and also tell a story. And custom work has been a big change, and that’ll hit at Christmas, too.”

Fortunately, as long as the economy remains strong and stable, the outlook for the holidays is positive.

“I think Christmas this year will be okay,” says Boyajian.

“The economy is okay right now.” Still, he admits it’s difficult to make across-the-board predictions. “I have some jewelers [among my consulting clients] who are struggling month to month, and some who are having their best year ever.”

SPARKLE ALL YEAR ROUND Moving forward, the best plan for stores may be to eliminate the stress of managing holiday sales expectations by striving for more balanced annual sales numbers. “The key,” says Gorkofsky, “is to do business all year long, so you don’t have to count on Christmas to make your year.”

Jones agrees. “I think it’s a mistake to count on Christmas,” he says. “It’d be nice to bounce along with stable inventory levels and have a customer that’s been cultivated all year round, and then consider that extra 12% or 15% as gravy.”

Quick points to bridal as a good path to making that work.

“Fortunately, love happens in all the seasons,” he says.

“Strengthening the bridal department is the easiest and most dependable way to ensure year-round clientele.”◼ 26 O C T O B E R 2 0 1 8

DIAMONDS.NET

TIPS FOR A SUCCESSFUL CHRISTMAS How to bring cheer to your sales figures • Make your attitude match the season.

“Be present, nice and happy,” says Quick.

“Your clients can read you better than you think they can.”

• Reach out to your clients. Don’t wait for them to contact you. “Pick up the phone and call,” says Boyajian. “Say you have a new piece in, and remind people that they should be buying jewelry.” It doesn’t even have to be a phone call, he continues, but it has to be personal. “You can email. You can use social media. You can use Facebook. But contact them.”

• Make your store shine. “Have your staff ready, and have your inventory clean and your showcases clean,” advises Gorkofsky. “It’s all about first impressions.... Being clean and being organized goes a long way.”

• Promote yourself every chance you get.

“Get involved in your community,” says Quick. “Establish a presence on social media. Send out a catalog, because people are looking for ideas. Even those who never look at mailings look during the holidays.” Creating special in-store events is also important, he adds. “Host trunk shows and pop-up collaborations with designers. Partner with a newer designer to host during Christmas.”

• Don’t criticize; compliment. “When it gets busy, go into your ‘rah rah’ mode,” says Jones. “You have to show your staff you have confidence, so give high fives all around. Christmas is not the time to critique.” Most importantly, he says, cut yourself some slack and enjoy yourself.

“It’s easier said than done, and sometimes you get in a grumpy mood.

But it’s the holidays. Have fun.”

RETAIL RAP

HOW ARE YOU MAXIMIZING THE IN-STORE EXPERIENCE? One jeweler connects to local mining history, while another uses technology and refreshments to reach out to customers. By Phyllis Schiller

DAVID LAMPERT OWNER, LESTER LAMPERT CHICAGO, ILLINOIS

CHRIS WATTSSON

OWNER, WATTSSON & WATTSSON JEWELERS, MARQUETTE, MICHIGAN

Our setup is unique in that we have For new customers, “SHOWING PEOPLE THAT a 100-foot-long ‘mine’ that takes up even before we talk THEIR PIECE CAN BE MADE about half of our store. The recreation specifics, we want HERE, ON THE PREMISES, of the actual mine that was in the area them to know that and the history of local mining draws a we design and make GOES A LONG WAY. lot of tourists. People who go through the mine end up most of our own jewelry. So we WHETHER THEY END UP at what we call our ‘Rock Room,’ which is a gift-shopgive them a full tour of the store, BUYING OR NOT, THEY type area. And then we have our main selling floor. including the shop where the jewelry People do wander around the store after they’ve seen is actually made. We have a lot of LEARN ABOUT US, AND IF the mine. It’s a good way to bring in customers. in-store branding touches — bottles IT’S A GOOD EXPERIENCE, “Another extra we offer customers is free ring of water and little candies with our THEY WILL COME BACK.” cleaning and checking the condition of jewelry; the name on them — that help establish piece doesn’t have to have been bought from us. It’s a our identity. good upsell as well. If we see problems with the ring, “The fact that we design and make our own rings for instance, we can discuss [how] we can fix it. means we can work with customers who provide their “Our showroom is approximately 4,000 square own stones. Today’s buyers have done their homework feet. We have a huge island and 10 chandeliers on the before they walk in, and more and more we’re seeing ceiling to provide lighting. We have multiple drawers that they’re buying diamonds online. We can create full of wax rings to show the customers. Often, when something special for them, whether they’ve inherited a client is looking for a custom design, they have the the stones or bought them somewhere else. stones and an idea of what they want. Sketching and “We usually start with a sketch, which we do right in showing them examples is a good first step to figuring front of customers. Not everyone wants to be involved out what customers are actually looking for. in every aspect, but if somebody does, I can send them “For the most part, depending on the design and a CAD rendering of the piece, and then the grown what the customer wants to be done, we can customize 3-D model with the stones laid in, so they can see the just about anything. And what various stages. We do that quite often.

“OUR STORE PHILOSOPHY we are seeing is, probably 80% “We use technology to keep people engaged, particularly the younger buyers, especially the IS TO TREAT EVERY CUSTOMER of our bridal [customers] want customize the design and millennials. More often than not, we’ll do FaceTime LIKE A FRIEND. IT FEELS LIKE to make it their own. With the aid when we start the design, and we can show them live THEY’RE WALKING INTO OUR of computers viewing from the design shop. When I’m working with the CAD program, HOUSE. NOTHING IS SCRIPTED. and CAD, I can set up the phone so that during IT’S VERY OPEN AND HONEST everything is made a FaceTime, we can discuss certain AND FRIENDLY.” little easier. aspects of the design.

DIAMONDS.NET

O C T O B E R 2 0 1 8 39

TH E FINAL CU T

HOW SHARP IS YOUR DIAMOND KNOWLEDGE? Are you a Rap Genius or in desperate need of enlightenment?

Take the test and find out

4. IN WHAT YEAR WAS THE FIRST DIAMOND RING USED FOR AN ENGAGEMENT? a. 1808 b. 1254 c. 1477 d. 1684 5. HOW MANY DIAMOND MINES ARE THERE IN THE US? a. None b. One c. Three d. Four 6. THE DIAMOND IS A BIRTHSTONE FOR PEOPLE BORN IN: a. February b. April c. June d. October 7. APPROXIMATELY WHAT PERCENTAGE OF MINED DIAMONDS GO TOWARD INDUSTRIAL USE? a. 40% b. 60% c. 80% d. 90%

2. THE UNCLE SAM, DISCOVERED IN 1924, IS THE LARGEST DIAMOND EVER FOUND IN AMERICA. HOW BIG IS IT? a. 40.23 carats b. 36.10 carats c. 22.12 carats d. 44.24 carats 3. HOW OLD ARE THE EARTH’S OLDEST DIAMONDS, APPROXIMATELY? a. 1.2 billion years b. 2.5 billion years c. 3.3 billion years d. 4.5 billion years 100 O C T O B E R 2 0 1 8

DIAMONDS.NET

ANSWERS: 1. B; 2. A; 3. C; 4. C; 5. B; 6. B; 7. C

1. THE WORD “DIAMOND” DERIVES FROM THE GREEK WORD “ADAMAS.” WHAT DOES IT MEAN? a. Sparkling light b. Indestructible c. Immense beauty d. Wondrous

RATE YOURSELF: 7 – Rap Genius 5-6 – Rap Star 3-4 – Rap on the Knuckles 0-2 – Better read Rapaport

Magazine more often!

Sharpen your industry knowledge with Rapaport Academy and learn from experts how to boost your skills and career.

WWW.RAPAPORTACADEMY.COM