Rapaport Magazine June 2018

VOL. 41 No.6 JUNE 2018

TRUMP THE IMPACT ON OUR INDUSTRY, INDIA AND CHINA

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MARKETING

LEGACY

GLOBAL DATA

Influencers are everywhere now. Find out how you can work with them to grow your brand awareness

Explore the fascinating American jewelry collection at the Metropolitan Museum of Art

In our new section: All the stats you need on the diamond centers around the world

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CONTENTS RETAIL 60 Retail profile To drive her e-commerce business, Melanie Casey has revamped her website, creating a seamless shopping experience.

STYLE & DESIGN 69 Jewelry Connoisseur

62 Retail insight

Many collections can be worn by both men and women.

Indian women are adding sparkle to their bridal jewels.

70 Book review

67 RetailRap

Diamonds chronicles two millennia of the iconic gemstone.

Customization and the millennial customer.

72 Style Young designers are offering a modern take on a time-honored favorite.

74 Designer Olivier Reza reveals how he has made his mark on the brand his father created.

COVER

40 Women in mining

IN-DEPTH 16 News INDUSTRY: Carats and gems RETAIL: An industry revival MINING: Jay delay clouds Ekati future MOVERS & SHAKERS: Who’s coming, who’s going.

The number of females in this largely male sector is growing, but is acceptance also rising?

42 Manufacturing success In a rapidly changing market, Rahaminov Diamonds sees its retail relationships and hands-on design as constants.

24 Opinion

44 Retail reshaped

Martin Rapaport on what Trump trade policy means for the industry.

Millennial and Gen Z buyers are creating a new world of experiential consumerism — one that’s digital and indifferent to brands, says consultant Robin Lewis.

30 News analysis The Modi scandal hurt the Indian trade’s reputation among banks. Industry leaders see an opportunity to do more than just mend the damage.

46 Sphere of influence Jewelers are increasingly turning to bloggers, celebrities and social media stars to market their goods.

32 Gems of wisdom Resisting the urge to discount can help you stop surviving competitive pricing and start thriving.

49 Interview Meet Susan Abeles, who is in charge of Philips’s recently launched New York jewelry division.

35 JCK preview Ahead of the Nevada shows, retailers ready their shopping lists while brands hustle to pack newly-finished diamond numbers.

50 Auction report & results Blue diamonds continue to dominate Sotheby’s and Christie’s New York sales.

76 Legacy The Met’s American jewelry collection follows US craftsmanship from Colonial days through the Arts and Crafts period.

78 Collections The enduring appeal and surprising variety of Art Deco designs is still apparent a century later.

80 Colored gemstone The jury is still out on its optimal hue, but the padparadscha sapphire’s star is rising.

122 Directory 126 Calendar 128 The final cut

MARKET & PRICING 85 TRADE REPORT 87 USA 92 INDIA 94 ISRAEL 97 ANTWERP DIAMONDS.NET

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98 HONG KONG 100 DIAMOND DATA 105 PRICE LIST 117 RAPNET PRICE LIST

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Breaking with tradition

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Note from the publisher

Change is inevitable. Change is constant,” Benjamin Disraeli said way back in 1867. However, while change is indeed inevitable, it has never specifically been a constant driving force in the diamond industry.

Tradition, rather, has always been our mantra and mainstay. You can trust tradition, whereas change disrupts the natural order of things. And in an industry based on trust, change has always been viewed with suspicion.

But we live in interesting and challenging times. Change is upon us, and our industry can no longer resist.

The diamond sector has reached not one, but multiple, intertwined tipping points.

Liquidity is drying up as banks flee our trade. More ethically minded consumers are demanding source traceability. Technology, from cryptocurrencies to synthetics, is bringing new opportunities and challenges.

Millennials are still proving a complex puzzle to solve as Generation Z comes of age. All this while the need to communicate through marketing ourselves has never been greater. These five tipping points — finance, transparency, technology, demographics and communications — have overlapped and blended into a “do or die” moment for those working in the diamond sector.

Our mission at Rapaport is to provide you with the information and insight to navigate these changes. To achieve this goal, our content over the past year has become sharper, stronger and more relevant. Now this is matched by a crisp, new design that packages this essential information in a more consumable, easy-to-navigate format.

We believe in the diamond industry. And we believe the content we provide each month empowers those working in it to flourish. So read, learn and succeed.

John Costello PUBLISHER

john.costello@diamonds.net DIAMONDS.NET

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SUCCE SS In a rapidly changing market, Rahaminov Diamonds sees its retail relationships and hands-on design as constants.

By Joyce Kauf

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f you want to stand out in today’s marketplace, you need to find your niche, advises Melanie Goldfiner, director of business development at wholesaler and jewelry manufacturer Rahaminov Diamonds.

“Our designers are women, and our jewelry is made by artisans in Los Angeles,” she says. “This is all part of our story…it’s who we are…it’s what we do.”

While adaptability is key in a market driven by fashion trends, demographic shifts and technology, so is remaining true to your brand values.

“Even with things changing so rapidly, there are certain constants that are critical to our success,” notes Goldfiner, the third generation to join the family business. In particular, she points to the company’s relationships with its retailers. “We are very proud of these partnerships; our focus is on strengthening them.”

BUILDING PARTNERSHIPS She advocates a proactive, sustained approach to working with retailers, explaining, “We don’t try to compete with them. We’re here to support them by providing whatever they need, especially in terms of training and sales collateral.”

For Goldfiner, the emphasis falls on education. “We don’t interact with the end consumer, so it is super important to us to educate the store owner and the sales staff about what makes our jewelry unique — the quality of the stone, and the craftsmanship that you can’t get in mass production. The consumer has to 42 JUNE 2018

know why she is paying a premium for our jewelry.”

MADE IN AMERICA Rahaminov jewelry is an American product, another key point of distinction Goldfiner cites. “We are proud to say that our jewelry is made in Los Angeles; only a handful of companies can say their jewelry is made in the US, let alone in the city where they live.”

Domestic production also affords Rahaminov the advantage of controlling its own design and manufacturing process. “We see the piece at every step of the way and can make changes as needed,” says Goldfiner.

While many manufacturers use technology to streamline labor-intensive processes, she notes that Rahaminov doesn’t look for any manufacturing shortcuts. “‘Where the diamond inspires the design’ is one of our slogans, and it reflects our approach to jewelry. We’re still pretty old-school at the end of the day.”

Being located on the west coast hasn’t influenced the company’s approach to business or its design sensibilities, she continues. “Our retailers are across the country, and their expectations are the same [nationwide when it comes to] luxury diamond jewelry.”

Goldfiner acknowledges the competition retailers are facing from e-commerce, but she has seen an uptrend in brick-and-mortar sales. She is optimistic about the future of the mom-and-pop jeweler.

“Something can look beautiful on paper,” she says. “But that doesn’t mean it will sparkle when you put it on your finger.” ◼

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Tips for meeting

THE CHALLENGES Rahaminov’s Melanie Goldfiner identifies the difficulties facing manufacturers, and offers some advice to make the most of opportunities.

CHALLENGES: High-end designers are now selling directly to the public, creating more competition not only for retailers, but wholesalers as well.

Millennials aren’t buying diamond jewelry. Manufacturers need to work more closely with their retail accounts to develop creative ways of enticing millennials into a store, and more importantly, getting them to buy.

Millennials want an experience — but it has to be different than buying a phone.

Jewelers are seeing more competition from the internet.

IMAGE: REX; SHUTTERSTOCK

Finding artisanal jewelers with the skills to produce intricate designs is no simple task.

TIPS: Be true to your brand. Maintain the same standards whether a piece of jewelry sells for $1,000 or $100,000.

Develop your singular story.

Make sure you have a point of differentiation and promote it to your customers. Include it as part of in-store sales training so the end consumer is aware of it as well.

Encourage women to feel confident in wearing and purchasing beautiful jewelry that can be worn every day. Empowering women is a great cause.

Buying online has its limitations.

Support retail accounts with in-store training. Remember business mogul Warren Buffett’s advice: “If you don’t know jewelry, know your jeweler.”

Stone by stone Family-owned and family-operated for over 70 years, Rahaminov Diamonds was originally founded by Moshe Rahaminov, who began his career as a diamond cutter in 1942. His daughter, Tamara, and her husband Amir Goldfiner built the business diamond by diamond. Amir oversees all buying, while Tamara heads the design team.

Their daughters are active in the business; Melanie Goldfiner is director of business development, and Nicol Goldfiner Barlev is jewelry designer and director of jewelry production.

Under Tamara’s direction, the Rahaminov design team has produced awardwinning jewelry — including the Rahaminov Rosé ring, which features an oval, 2.32-carat, natural fancy pink, VVS1, GIA-certified diamond and received the 2016 Grand Prize JCK Choice Award.

Rahaminov jewelry is also a favorite of redcarpet celebrities, including Miranda Kerr, Kristen Stewart, Emily Ratajkowski, Dakota Johnson, Halle Berry and Allison Janney.

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DIAMOND WEDDINGS Indian women are adding sparkle to their bridal jewels.

By Zainab Morbiwala

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raditionally, an Indian bride’s parents would begin saving for her jewelry from the day she was born. And until recently, on her wedding day — and of course, at the pre- and post-wedding festivities — the bride was adorned in gold from head to toe.

Times have changed. While jewelry still tops the bride’s shopping list — in terms of both priority and budget — plain but intricately fashioned gold is fast being replaced by diamonds and other precious stones, especially in northern India.

“Jewelry has always played an important role in Indian society, not simply from an investment angle, but from an emotional angle as well,” says Vijay Jain, CEO and director of gold and diamond jewelry brand ORRA. “On their wedding day, women still prefer to look the part of the quintessential Indian bride, with a preference for traditional jewelry in the form of gold or polki [jewelry featuring uncut diamonds].” It is at the pre-wedding events — such as mehendi, a ceremony where henna art is applied to the bride’s hands; sangeet, a music and dance party; and haldi, applying a turmeric paste to the bride’s and groom’s skin — where Jain has seen the largest jump in demand for diamond jewelry. ORRA expects to see approximately 10% growth this year, after a 20% to 25% improvement in the past three years, according to Jain.

While gold makes up 70% of the Indian jewelry market, says Jain, this figure jumps to 85% in rural areas. “At present, ORRA has more than half of its overall sales in diamond jewelry. Typical price points are in the range of INR 200,000 to INR 500,000 [$3,064 to $7,660, for gold bridal jewelry] and INR 500,000 to INR 700,000 [$7,660 to $10,724, for diamond bridal jewelry].”

Current fashions

Another strong trend is multipurpose jewelry. Tanvi Shah, head of production and design at Mumbai’s Anokkhi Diamonds and Jadau, points out that there is growing demand for smaller pieces that can be worn more often. “The demand for detachable and

changeable colored stones has been increasing due to their ability to be mixed and matched with different outfits,” she says.

Solitaires are becoming a more common choice for urban brides, adds Shehzad Zaveri, creative director at the Mumbai-based Minawala jewelry label. “Big pieces are trending. This is an important look achieved by illusion-setting in jewelry,” he says. Zaveri sees more Indian brides choosing wedding sets featuring rose-cut diamonds, which give a substantial look at affordable prices. “[Some] modern brides-to-be opt for a combination of fancy yellow and white diamonds for their wedding ensembles,” he continues. “Checkeredlook jewelry designs combined with paisleys, rounds, squares and circles of cleverly placed diamond motifs — trying to cover as many square inches of skin possible — are in vogue for the millennial bride.

The magic is that the look is more valuable than the price!”

Shah says there is a lot of experimentation with fusion jewelry, such as polki with diamonds, rose cuts with pearls, and precious and semiprecious stones with silver.

A new style in the past two years, according to Zaveri, is using several lines of diamonds to create a layered neckpiece. “They look very good and bring the cost down. Wedding necklaces and earring sets with a combination of either red or green and even blue gemstones with diamonds can be seen in the market.”

Stiff necklaces, he reports, have been replaced with flowing necklaces that offer movement and comfort. Free-flowing earrings are also popular.

Brides and their families visit five or six stores before they buy jewelry, says Shah. “Clients today like smaller sizes on the neck and bigger, longer earrings,” she notes. “Modular jewelry [and] detachable necklaces are preferred so that they can be used as a pendant or two lines in future. So for the pheras [traditional Indian wedding ritual], polki or antique gold are a common choice; for the sangeet, ethnic diamonds; and for the cocktail, fusion or trendy diamonds, or polki works well.”

Growth opportunities

The rise of branded jewelry has had a strong influence on the demand for diamonds. “Highly professional business practices > DIAMONDS.NET

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create trust by offering detailed price breakdowns, timely exchange, and repair and return policies,” Shah explains. “Clients are pampered with good services and discounts. Celebrity ad campaigns are executed by chain stores to create hype around diamond jewelry.”

Traditionally, family elders chose the jewelry, viewing it as an investment they could fall back on during hard times. However, as women increasingly work in the corporate sector, brides are opting for a more elegant look rather than heavy gold jewelry. Jain points to rising disposable income, urbanization and a trend for nuclear families to live separately from their extended families as factors contributing to growth.

“The most significant shift has been from locker jewelry [kept in a safety deposit box] to lightweight jewelry,” he says. “Rising awareness coupled with transparency of the provenance of the stones has added to the trust factor.”

Leshna Shah, founder and creative head of Aurelle by Leshna Shah, agrees. “The modern bride is a smart bride. She looks for contemporary taste with a touch of tradition that portrays her roots,” she says. “She is looking for the likes of modular jewelry, which can be worn in many different ways on multiple occasions so that her precious jewels do not lie locked up in a cubbyhole.”

New bride

A selection of nuptial jewelry from Prakshi Sharma, creative head at Prakshi Fine Jewellery

Customization and regional differences

Given the high cost, when opting for diamond jewelry, brides — especially wealthy ones — prefer custom designs.

Tanvi Shah says diamonds are preferred in northern India, with larger sizes and lower clarity being popular, while gold jewelry is favored in the south. She believes versatility is key to the increasing demand for diamonds. “[Customers] want to…fit into the budget along with getting a size that suits their appearance. Sometimes fancy cuts are replaced with static rounds and vice versa. There is not much that you can play with gold as compared to diamonds that come in various shapes and sizes, and with the ever-changing trends in the market there is a lot more scope for customization,” she says.

However, in Jain’s experience, most customers can’t afford to customize.

“Other than the elite and the super TYPICAL JEWELRY elite, most other customers prefer BUDGET FOR A jewelry that is ready to pick up BRIDE FROM and serves the purpose of instant URBAN INDIA gratification,” he states.

He believes gold wedding jewelry 20%-30% will remain a favorite with local Jadu brides. “The bridal attire in India is far more attuned to hues, which 30%-50% is where gold becomes a preferred Diamonds choice. Furthermore, traditionally, gold has been seen as a sign of prosperity, which is why the 50%-60% Gold preference for diamond jewelry as part of the overall bridal look is still lower. [Yet] while we have a long way negligible to go in terms of replacing a category Silver & platinum completely, diamonds are making steady inroads.” ◼ 64 JUNE 2018

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CUSTOMIZATION AND THE MILLENNIAL CUSTOMER

Two retailers weigh in on personalized pieces’ appeal to this generation. By Phyllis Schiller SUSAN PURNELL OWNER KUHN’S JEWELERS SALISBURY, MARYLAND

JOHN CARTER PRESIDENT JACK LEWIS JEWELERS BLOOMINGTON, ILLINOIS

“I think that everybody likes to tweak things a little bit. But customization usually costs a jeweler a lot more money than finding something on the shelf for their customers.

I have a very large inventory, so usually, when engagement-ring customers come into the store and show me a picture of a ring and say, ‘This is sort of what she likes,’ I can find something in our inventory for them without going to the expense of customization.

“This issue does not tend to come up with our customers with regard to regular jewelry. Obviously, mass customization is popular, in that Pandora is popular. But I never got into that simply because I didn’t like the look of the product.

“In terms of engagement rings, there are a lot of ways that you can change the look to customize it for customers.

If they don’t like the prongs of the ring, for instance, or the kind of head, there is a lot you can do. But I don’t have people coming in the store and saying, ‘I want a 2-millimeter shank with such and such details…. I’m not seeing that kind of thing.

“In terms of attracting millennials, we do social-media marketing — for sure. I have found that to be pretty effective. We do all kinds of things. We do contests and share new things that we have and share things that we’re doing, sale information. We pay for ads. Just about everything you can think of doing, we do.”

“I would say that millennials are about the experience, and nothing gives you quite the same tailored experience as customization does.

Everything is done via CAD/CAM [software] so they can see what’s going on. That seems to be a big part of it — they want to view the process, be a part of the process. So we have stations where customers can sit down and work with our designers, and they can see as the changes are being made.

“However, in terms of describing and grouping millennials as an individual generation, we’re nearly at the point that that is almost done.

“The statistic I read recently is that millennials, because of where the cutoff is, are now around 35 years old. So we’re spending all this time and energy dissecting a group of young individuals who are fully grown people who have already delved into their careers. And yes, they still have the things that make them tick, but they have also matured as a generation, the same way our generation did. I don’t necessarily think about them as an individual generation anymore.

“What I can say is that the way the jewelry-buying consumer has changed is that people are all about the experience now — millennials as well as other generations — and they are used to having that in everything that they do. So yes, custom is a brilliant way to give them that, because it allows them to tailor the experience to match whatever their expectations are.”

“ALL-OUT CUSTOMIZATION ISN’T THAT IMPORTANT FOR THE MAJORITY OF OUR CUSTOMERS.”

“ANY SUCCESSFUL JEWELRY STORE TODAY HAS TO BE USING CUSTOM AS A PART OF WHAT THEY DO, OR THEY’RE MISSING THE BOAT ON WHAT CONSUMERS OF ALL GENERATIONS WANT.”

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