Rapaport Magazine - January 2018

Vol. 41 No.1 January 2018

MORE THAN THE SUM OF ITS PARTS

RAPAPORT DIAMOND PRICE STATISTICS 2017

2017 of Review King Bling

Outstanding personalities, Meet celebrity game-changing deals and jewelry designer Stephen Webster sales: The year that was

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Profile Auctions

Could the new Leonardo Strong Geneva sales Da cut replace forVinci Sotheby’s and the Christie’s traditional round brilliant?

RetailTrends Trends

Transparency, Challenges andethical supply, and vintage opportunities of jewels: customization Check out all the hot stuff

Style Style

Gemstone Trade Report

Diamonds forisladies, Pantone’s colors Animal jewelry all TheCharting impact of new mine minimalism gentlemen: Gahcho of the year, beautiful the rage thisfor season.

Kué one on the Go wild2018 in your store rough market watches gemstone at a time

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NOTE FROM THE PUBLISHER

The trends that drive us

IMAGE: Ben Kelmer

Rapaport Magazine’s January issue is always one of our most sought-after. And for good reason: It not only provides highly detailed and concise insight into how our industry has been performing, via the Rapaport Diamond Price Statistics Annual Report (Page 70), but also gives our editorial team an opportunity to take a look at the year ahead.

This year, Jennifer Heebner has done that in style. In this issue’s cover story, “Trend Talk 2018” (Page 30), Jennifer looks at the key developments we all should be monitoring in manufacturing, retail and design, as well as business and fashion.

The trends she has identified that I believe resonate most strongly and deeply in our industry are, first of all, transparency in sourcing, and social responsibility. We need to be able to demonstrate the legitimate good that diamonds do and the ways communities benefit from them.

Consumers also need to be reassured of diamonds’ origins.

There is no doubt our industry still has some way to go when it comes to tracking the route most diamonds take from mine to market. There is no other alternative if diamonds are going to remain an object of desire for the modern consumer.

The other two notable trends Jennifer identifies are “connecting with consumers” and “courting women.”

Moving beyond selling the 4Cs and grading reports to focus on storytelling has become an increasingly essential element in the sales process. We need to create a sense of enchantment, wonder and romance around diamonds, and I believe the ability to do this sets apart those that thrive from those that barely survive.

Meanwhile, the position of women in our industry has evolved greatly, and understanding and adjusting to empowered female shoppers and self-purchasers will open up a range of new possibilities for those tuned in to this growing segment.

With the overall buoyant economic mood, Rapaport is very positive about the coming 12 months. It is obvious that there will be threats as well as opportunities to navigate.

But as Harry S. Truman said, “A pessimist is one who makes difficulties of his opportunities, and an optimist is one who makes opportunities of his difficulties.”

Happy New Year.

John Costello Publisher john.costello@diamonds.net

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CONTENTS

IN-DEPTH

RETAIL

MARKETS & PRICING

16 News

52 Retail profile

Industry: The latest in transparency, trading and mining.

Overview: The year that was.

Retail: Who says retail is dead?

Movers & Shakers: Who’s coming, who’s going.

Diamonds and gemstones share the spotlight with historical artifacts at Designing Jewelers in La Crosse, Wisconsin.

70 Diamond Price Statistics Annual Report 2017

24 News analysis: Namibia The African country looks to offshore diamond mining as its land-based resources dwindle.

26 Profile: A golden opportunity Could Amin Luxury’s new Leonardo Da Vinci cut replace the round brilliant?

COVER 30 Trend talk 2018 What should be top of mind for jewelers this year? Rapaport Magazine fills you in on the 12 most important directions the industry is taking.

IMAGES: Leibish & Co.; Bonhams; Lisa Bridge

36 Reflections: Pink possibilities

55 RetailRap What buying trends stood out in 2017?

STYLE & DESIGN 57 Jewelry Connoisseur

93 Trade report Confidence spurs holiday sales.

95 US wholesale 96 US retail

The quiet revolution of mini hoops.

99 Hong Kong

58 Style

100 Israel

Men’s watches go minimalist, but diamonds are a girl’s best friend.

103 India

60 Designer

104 Russia

Wallace Chan, known for his detailed carvings in gemstones, is a sought-after name in both the East and West.

106 Antwerp

62 Legacy

Record-shattering sales of rosy diamonds at auction have propelled them into the limelight.

A new book highlights 50 women jewelry designers who made their own way to the forefront of the industry.

40 Interview: Jean Ghika

66 Colored gemstone

The newly appointed global director of jewelry at Bonhams talks about the year’s standout gem sales and auction trends.

From Ultra Violet to Coconut Milk, Pantone’s colors for 2018 are in, and the jewelry industry is ready to use them.

42 Auction report & results

The correction continues.

108 Diamond data 113 Price List 125 RapNet Price List

134 Calendar 136 The final cut

Pink diamonds and jadeite take point at Christie’s successful autumn Hong Kong Magnificent Jewels sale. Meanwhile, blue gems, signed jewels and an unassuming pearl dominated the sales in New York.

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NEWS/2017 REVIEW

The year that was The industry had its fair share of company shake-ups, important sales, and of course, beautiful diamonds that caught our readers’ attention in 2017. Here’s Rapaport Magazine’s pick of the people, deals and developments that stood out. By Avi Krawitz Personality of the year ▪ Pastor Emmanuel Momoh insisted on selling the 709-carat Peace Diamond, which his team of diggers found in Sierra Leone’s Kono district, in an open, transparent way. The alternative was to give in to pressure and sell it to a local dealer, or even have it smuggled out of the country. But the eventual sale to Graff Diamonds for $6.5 million will change the way diamonds are sold in the country, and demonstrated the social impact a stone of such magnitude can make.

HONORABLE MENTIONS: ▪ The people of Zimbabwe, who (we hope) will now benefit from the country’s diamond revenues, having removed former president Robert Mugabe from office.

▪ Britain’s Prince Harry and fiancée Meghan Markle, whose engagement has set a new three-stone-ring trend in motion.

Acquisition of the year

Market game-changers

▪ Signet Jewelers paid $328 million to acquire R2Net, the owner of e-jeweler James Allen and Segoma Imaging Technologies, which creates 3D displays of diamonds and jewelry for consumers buying on the web. The move gave Signet’s online channels a much-needed boost.

HONORABLE MENTIONS: ▪ The Washington Companies acquired Dominion Diamond Corporation, owner of the Ekati mine in Canada, for $1.2 billion.

▪ De Beers bought LVMH’s 50% stake in De Beers Diamond Jewellers for an undisclosed sum, giving the miner full control of its brand.

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▪ Belgium and Israel enacted new diamond tax rules after prolonged negotiations in which local industry leaders argued the laws would improve transparency.

General tax overhauls in India and the US are also expected to impact the way businesses operate in the coming year.

HONORABLE MENTIONS: ▪ Growth was restored in China’s jewelry retail market after three years of decline.

▪ Exelco, a high-profile Antwerp-based De Beers sightholder, filed for Chapter 11 bankruptcy protection, causing the already wary banks to view the trade with further caution. diamonds.net

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Deal of the year ▪ Graff Diamonds snapped up two pairs of highprofile rough diamonds in 2017. The highlight was arguably its purchase of the 1,109-carat Lesedi La Rona for $53 million, after it spent $17.5 million on a 373-carat shard that had broken off that stone — thus reuniting the two. Graff then turned its attention to Sierra Leone, buying the 709-carat Peace Diamond for $6.5 million and the 476-carat Meya Prosperity for $16.5 million.

HONORABLE MENTIONS: ▪ Chow Tai Fook bought the 59.60-carat, fancy vivid pink, internally flawless Pink Star for $71.2 million at Sotheby’s Hong Kong, making it the most valuable diamond ever sold at auction.

▪ Christie’s Geneva sold the emerald-cut, 163-carat, D-flawless stone known as the Art of de Grisogono, Creation 1, for $33.7 million. Swiss jeweler de Grisogono polished the diamond from a 404-carat rough stone it had bought for $16 million.

Rapaport’s most engaged tweets in 2017 1. “This blue diamond will lead Sotheby’s Hong Kong jewelry auction.”

2. “The diamond industry can learn a lot from the engagement of Prince Harry and Meghan Markle, says Rapaport Publisher John Costello.”

3. “Miners in Sierra Leone have unearthed a 476-carat diamond.”

4. “The GIA’s gemologists were officially bewildered” — by an unusual flaw in a CVD diamond.

5. “This 163-carat, D-flawless diamond appeared in Dubai this week as part of both a necklace and a bracelet.”

IMAGES: Shutterstock; James Allen; Christie’s Images Ltd 2017; Sotheby’s; Donald Bowers/Getty Images for Sotheby’s

Appointment of the year ▪ Virginia Drosos has arguably the biggest challenge of any of the industry’s new CEOs. She replaced Mark Light as head of Signet Jewelers at a time when the company was facing a lull in sales, issues with its credit program, and accusations of sexual harassment dating back to the ’90s — not to mention a 41% slump in its stock price for 2017.

HONORABLE MENTIONS: ▪ Alessandro Bogliolo replaced Frederic Cumenal as CEO of Tiffany & Co. after a disappointing 2016 Christmas season.

▪ Sergey Ivanov replaced Andrey Zharkov as CEO of miner Alrosa.

Most-read stories on Diamonds.net in 2017 (spot the trend) 1. GIA Finds Significant Undisclosed Synthetics

6. The GIA’s Forays into Diamond Tracking

2. GIA Finds Baffling Flaw in CVD Diamond

7. Christie’s to Auction 163ct. D-Flawless Diamond

3. GIA Spots Natural Diamond with CVD Blue Layer

8. Pink Diamond Smashes Records with $71M Sale

4. GIA Finds Synthetic Diamond with Forged Inscription

9. Flea-Market Ring Fetches $848K

5. 5 Lessons from the Hong Kong Show

10. Diamond in the Ruff: Dog Eats $16K Ring

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THE FINAL CUT

Think you know the year’s diamond news? Test yourself with Rapaport Magazine’s trivia challenge

1. Tiffany CEO Frederic Cumenal stepped down suddenly in February, hours before what important event? a. Tiffany announcing its financial results. b. The launch of its new “everyday items” collection. c. The appointment of Reed Krakoff as chief artistic officer. d. The jeweler’s first Super Bowl commercial.

2. Sotheby’s garnered $847,667 for a 26.29-carat polished diamond at a London auction in June. The stone’s nickname came from the price the owner had paid for it in the 1980s. What was it? a. The Pound. b. The Tenner. c. The Fifty-Quid Diamond. d. The Bitcoin.

3. Which of the following stocks suffered the largest share-price decline, percentage-wise, in 2017?* a. Alrosa. b. Gem Diamonds. c. Mountain Province Diamonds. d. Signet Jewelers.

4. De Beers will spend $142 million on a new mining ship that will hunt for diamonds off the coast of which African country? a. Angola. b. South Africa. c. Sierra Leone. d. Namibia.

6. Dubai-based Almas Diamond Services will polish the stones that come from the 813-carat Constellation rough diamond at its new factory in the United Arab Emirates. But what reason did it give for the decision to have the diamond sawed in Israel? a. Its cutting machine had arrived too recently. b. The project wouldn’t have been profitable. c. The company was understaffed. d. Only Israel has the required expertise.

7. Which jeweler’s 18-karat yellow gold and opal earrings was Meghan Markle wearing when she made her first post-engagement appearance with Prince Harry? a. Birks Group. b. Harry Winston. c. Pandora. d. Chopard.

8. Which two of the following storylines featured in the June 2017 edition of Cartier’s acclaimed “The Proposal” commercials? a. A young pair meets by chance at a Parisian museum.

Two years later, they return there. He sets up a treasure hunt by sending her photos of exhibits on her smartphone. The game ends at a statue, where he proposes. b. A couple meets when the woman accidentally knocks the man into a pool at a party. The video cuts to two years later, when he jumps into a different pool and proposes to the same woman. c. A woman complains about the noise her musician neighbor is making. Two years later, they attend his concert together as, we find out, a couple. He sings her a number, and proposes. d. A couple meets at the top of the Eiffel Tower. The proposal takes place at the same spot two years later.

5. Lucara Diamond Corp. finally found a buyer for the 1,109-carat Lesedi La Rona in September, nearly two years after digging it up. How much did Graff Diamonds pay for the record-breaking rough stone? a. $51 million. b. $53 million. c. $63 million. d. $71.2 million.

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Answers: 1. d, 2. b, 3. c, 4. d, 5. b, 6. a, 7. a, 8. b and c

* Between market opening on January 3, 2017, and closing on December 29.

Compiled by Joshua Freedman. IMAGES: Tiffany & Co.; Sotheby’s; Cartier

What’s your score?

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