Rapaport Magazine - March 2021

VOL. 44 NO.3 MARCH 2021

INNER WORKING S A look at the movements of the watch market, from leading brands to auction results

ANALYS I S

R E P O RT

R ETAI L

ST Y L E

WHAT THE NEW US ADMINISTRATION MEANS FOR THE DIAMOND INDUSTRY

AMID LOCKDOWNS, SINGAPORE JEWELERS ARE GOING LOCAL AND EMBRACING E-COMMERCE

ADVERTISING TO ALL AGE GROUPS CALLS FOR TARGETED, MULTICHANNEL MESSAGING

ART DECO: CONTEMPORARY TAKES ON THE MOST POPULAR DESIGN ERA

CONTENTS VOL. 44 NO. 3 MARCH 2021

19 DIALING UP

IN-DEPTH

THE BIDS

8 NEWS Talk about conflict; Fake grades; Stimulus checks boost US retail; Arctic unfreezes Ekati; Polaris to star.

Auction houses saw impressive timepiece sales last year as horology fans turned their attention to online buying.

12 NEWS ANALYSIS

22 REPORT

As the Biden-Harris administration settles in, fields like climate action, financial aid, and Covid-19 will see substantial policy changes. How will these affect the US jewelry sector?

Singapore has been a thriving jewelry market for overseas clients. Embracing e-commerce and going local have helped it weather the lockdowns, but concerns remain.

COVER

RETAIL

14 MAKING UP FOR LOST TIME

Watch brands had to shift gears in 2020 as the pandemic disrupted business. What does 2021 have in store?

32 PAGE

STYLE & DESIGN

30 JEWELRY

CONNOISSEUR

As the world emerges from quarantine, gem-studded watches will be all the rage.

26 RETAIL PROFILE

32 STYLE

A new generation of owners builds on the 135-year-old legacy of Michaels Jewelers in Connecticut.

Art Deco is still going strong a century later, with fresh interpretations from today’s designers.

28 RETAILRAP

34 DESIGNER

When marketing to an array of age groups, multichannel advertising and targeted messaging are key.

Thelma West has a long history in the diamond trade. Now she’s using her experience to create bold pieces and safe work spaces.

36 LEGACY

22 PAGE

The wonders of Egyptian jewelry come to life in a new book and exhibition from the Worcester Art Museum.

39 ESTATE JEWELS Philadelphia-based dealer Brad Wilson reveals why men’s vintage is becoming a big business.

40 COLORED GEMSTONE Suppliers discuss how sourcing, selling, and other parts of the trade have gotten more complicated since the coronavirus hit.

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MARKETS & PRICING 43 TRADE REPORT February retail season buoys market.

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

N OTE FROM TH E P U B L I SHE R SIGNS OF PROMISE

W John Costello PUBLISHER

IMAGE: BEN KELMER

J O H N .COST E L LO @ D IA M ON DS.NET

e are slowly approaching the end of a once-in-ageneration pandemic. It has caused widespread damage and devastation across the globe. There is, however, an air of optimism sprouting from the doom-laden days of the past 12 months.

Alongside falling infection rates and the rollout of vaccines, we are seeing an upswing in the economy.

Indeed, the US — the powerhouse behind global diamond and jewelry demand — is expected to experience “stellar” growth over the coming year, according to the Bank of America. Fueling this prediction is a belief that consumers are gearing up to go out and spend this year. The bank, affirming its confidence in the assessment, has increased its 2021 forecast for GDP growth from 6% to 6.5%. It has also raised its 2022 growth projections from 4.5% to 5%.

China, another important player in the global diamond and jewelry sector, is also a “good-news story.” It was the only country in the world to see growth in 2020 (2.3%). The International Monetary Fund (IMF) expects the nation’s economy to improve by more than 8% in 2021 and over 5.5% in 2022.

These key indicators paint a positive picture for our sector’s recovery. And the lessons we have learned will hopefully help make our industry more robust going forward.

The rise of Covid-19 has forced us to upgrade our digital capabilities. It has forced us to become closer to our customers. It has forced us to think beyond profit margins.

The diamond and jewelry sector has gotten off to a good start so far this year on the back of a successful holiday season. However, as we rebuild, we need to be wary. Things are unlikely to go back to the way they were. Consumers have evolved, as have the businesses that serve them. We have to continue along this path of adaptation and development.

As we slowly leave the specter of Covid-19 in our wake, we must emerge brighter and better able to serve our customers when, where and how they need us. This ongoing journey should never cease to be our goal.

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N E W S A N A LY S I S

ELECTI N RESULTS With the new US administration settling in, fields such as climate action, financial aid, and the Covid-19 battle will see substantial changes in policy. How will these affect the jewelry sector?

BY LARA EWEN

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residential elections usually precede policy changes.

However, this year’s incoming US officials face unprecedented circumstances and are poised to make sweeping, even historic shifts. During his first month in office, President Joe Biden signed a recordbreaking 24 executive orders, according to the Federal Register, overturning significant swaths of the previous administration’s work. And the Biden-Harris government is just getting started.

What will these changes mean for the jewelry industry?

PANDEMIC RELIEF

of environmental sustainability,” says Driscoll. “Retailers and brands that aren’t executing sustainable practices [risk] alienating the increasing number of consumers and employees that value sustainability and factor [it into their purchasing choices].”

Many luxury brands have already been working to mitigate their environmental footprints, observes Greg Furman, founder and chairman of the Luxury Marketing Council. “Most of the brands that need to think about that have thought about it,” he says. “And the ones that haven’t? Woe to them. Anyone who is asleep at the switch on social and environmental issues is a dinosaur.”

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ECONOMIC SUPPORT One of the first tasks of the new administration will be tackling the coronavirus. “The Biden administration will spend trillions of New economic aid packages are also on the horizon, and they can’t dollars to help solve Covid-19 and to keep the economy growing,” come too soon for many businesses and workers. assesses Marty Hurwitz, cofounder and CEO of consulting firm “The jewelry sector, similar to retail, is fragmented,” says MVI Marketing, which specializes in the jewelry industry.

Driscoll — though she adds that there’s been some consolidation For better or for worse, the pandemic was a net positive for many since Covid-19 forced some nonessential businesses to close jewelers, he contends. “Jewelry has a certain emotional appeal as permanently. “Laying the foundation for a strong economic a purchase, and during Covid-19, people needed a bond with their recovery includes addressing the entrepreneur and small and midloved ones. Jewelry really filled that need, so Covid-19 has been a size enterprises (SMEs). Relief and aid to small businesses will go a boon to the jewelry industry, ironically enough.” long way toward reviving the US growth engine, Although some worry “that as Covid-19 wanes, [and] government support of made-in-America it will negatively impact jewelry spending,” he products should benefit local artisans and says, he believes this concern is unfounded. “It’s US-based brands.”

“Anyone who is not happening in the near term. And anyway, Biden’s push to raise the minimum wage asleep at the switch the amount of money the administration will be will also affect stores, though Driscoll believes on social and pumping into the economy will help everyone.” the benefits will outweigh any drawbacks.

Even so, the virus has affected not just what environmental issues “For retail generally, higher minimum wages, consumers buy, but how they shop. holding everything else constant, will impact is a dinosaur” “The outlook in 2021 for retail, luxury retail profits,” she says. “However, for workers earning and luxury jewelry remains tied to Covid-19, minimum wage, and [those] whose wages are and how soon the US and the world get vaccines tied to minimum wage, increased disposable and win the Covid-19 war,” says Marie Driscoll, income will result, which could work its way managing director of luxury and fashion at Coresight Research. into retail.” That said, higher tax brackets may feel more of a “Consumer migration to online shopping, [in] multiple categories, pinch, she cautions. “Changes that are planned for corporate and continues with [or] without Covid-19, which accelerated the personal taxes could have an impact on disposable income, and migration. When consumers feel safe being social [again], consequently retail.” we expect pent-up demand to drive visits to stores, vacation Furman expects the luxury sector to stay largely immune to destinations and restaurants.” upheavals. In the 28 years he’s been in luxury marketing, he says, This could benefit brick-and-mortar stores that have languished he’s found that “irrespective of up markets and down markets — I during lockdown, suggests Driscoll, whose firm focuses on retail don’t want to sound arrogant, but the rich are always going to be and technology. She predicts that “the trend for experiences over rich. Not to be cavalier, but the luxury buyer will always buy luxury product, [which] was sidelined with Covid-19, will see a rebound.” unless there’s global devastation far beyond Covid-19.”

FOCUS ON SUSTAINABILIT Y

GREATER DIVERSIT Y

Climate change, sustainability, and eco-friendly materials and practices will also take center stage as the administration draws greater attention to environmental, social and governance (ESG) concerns. ESG is “a significant issue for the diamond, jewelry and watch world that I think will be enhanced by the Biden administration,” says Hurwitz. “Not only did they appoint [former Secretary of State] John Kerry as a climate czar, but they gave [geneticist] Eric Lander a cabinet position as science advisor. This is historic, especially coming off of the Trump administration, where science was ignored.”

New environmental policies may also impact consumer behavior.

“The Biden focus on climate change increases consumer awareness

Diversity issues are also expected to become a focus.

“The jewelry industry, like the Biden administration, needs to look like America,” stresses Hurwitz. “It needs to look more like the general population...in terms of ethnicity and sexual orientation, with more women. The jewelry industry is way behind the Biden administration in that. So everyone needs to aggressively recruit that personnel.”

To be effective, the changes will need to be substantive, he says.

“We’re in an industry dominated by old, fat, white men, many of whom may have been Trump supporters. And younger consumers can smell bullshit a mile away. If a brand pushes [empty talk] instead of a real initiative, they’re going to be called out.” ◼ DIAMONDS.NET

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REPORT

Clockwise from top left: State Property founders Lin Ruiyin and Afzal Imram; Vihari Poddar; Shanya Amarasuriya; Caratell Intertwined Love jadeite and diamond bangle. Opposite: Members of the newly formed Diamond Exchange of Singapore (DES) in 1986.

The affluent Asian country has been a thriving jewelry market for overseas clients.

After months of lockdown, its turn toward local buyers and e-commerce has helped it weather the crisis, but concerns remain.

B Y R I C H A G OYA L S I K R I

WHAT’S IN STORE FOR SINGAPORE

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mong the Asian markets for diamonds, gemstones and jewelry, the island nation of Singapore has usually remained in the shadow of the more dominant Hong Kong, India and China. By mid-2020, however, global news media started showcasing Singapore as an example to follow in successfully controlling the Covid-19 virus and reopening its economy.

Considered the Monaco of the East, Singapore has played a notable role in the diamond and jewelry sector’s history. In the early ’90s, the US was the primary source for certified diamonds. The ease of doing business in Singapore — along with pragmatic tax laws, security, good infrastructure, and transparency — made it the perfect hub for US jewelers and merchants to cater to the royal families of Brunei and Malaysia, affluent Indonesian industrialists, and a fast-growing class of high-net-worth individuals across Asia.

“Between 1991 and 2003, there was good two-way movement of diamonds between the US and Singapore, especially since [the Gemological Institute of America (GIA)] was in New York,” recalls veteran diamond dealer Suresh Hathiramani of Facets Singapore. At that time, “80% of rough diamonds were sold via the Diamond Trading Company (DTC) of De Beers, and about 10 DTC sightholders were in New York. Sometimes my US partners, facilitating certification of my stock, would land up buying a certain portion of my certified goods.”

Once India started processing certified diamonds in the early 2000s and the GIA opened an office there, things changed.

Unable to compete with India’s lower costs, diamond players in New York turned from manufacturing to trading, and to serving primarily their US customers. Meanwhile, the Hong Kong jewelry show emerged as an essential destination. In the years that followed, Indian diamond manufacturers made

great strides in improving their work quality and opened offices in Hong Kong.

The pull toward Asia had begun.

PU L L I N G TH R O UGH TH E PAN D E M IC In general, industry sources estimate that more than 75% of Singapore’s loosediamond customers are overseas visitors from neighboring countries. For jewelry, that figure is an estimated 60% to 70%.

With that in mind, how has Singapore evolved and performed in the face of the global pandemic this past year?

“From February till [the end of] June, there were practically zero sales, no movement of goods,” says Reuben Khafi, president of the Diamond Exchange of Singapore (DES) and AMTC Diamonds.

“From July onward, as Singapore emerged from the circuit-breaker [the country’s term for a lockdown], residents started socializing. There was a sense of euphoria [and] freedom, and luxury was at the forefront — whether high-end

watches, cars, diamonds [or] jewelry.

We particularly noticed an [increase] in requests for diamond engagement rings. We believe months of separation during the circuit-breaker motivated couples to move forward with their lives on a positive note.”

Singapore’s two-pronged approach to the virus — strict controls to curb its spread, and job support schemes for citizens and permanent residents — helped keep business wheels turning.

Although contributions from international visitors were missing, the affluent Singapore-based frequent fliers were also grounded. Singapore residents typically take two vacations every year, in addition to multiple minibreaks. With border restrictions in place, those travel budgets were diverted to jewelry in many cases.

“My business [before the pandemic] was mainly via international trunk shows, fairs, visiting overseas clients, export- ▶

“WE BELIEVE MONTHS OF SEPARATION DURING THE [LOCKDOWN] MOTIVATED COUPLES TO MOVE FORWARD WITH THEIR LIVES ON A POSITIVE NOTE”

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REPORT Clockwise from top left: State Property Dekker signet ring in emerald, diamond and enamel; Ninja Crane earrings by An Order of Bling with pink and white diamonds; Vihari ring with a Burmese pigeon-blood ruby and diamonds. Opposite: State Property Battuta necklace with emerald and black onyx.

Word-of-mouth references from existing customers brought in new clients from their social circles as well, she adds.

“WE OPERATE LIKE A FIRST WORLD NATION, WITH STRINGENT ANTI-MONEY LAUNDERING REGULATIONS, TOP-NOTCH INFRASTRUCTURE, AND AN ENVIRONMENT THAT ENCOURAGES TRANSPARENCY AND TRACEABILITY” oriented,” relates vintage and highjewelry specialist Brenda Kang of retailer Revival Jewels. “The last show I attended was Tefaf in March before returning to Singapore. I feel the circuit-breaker reminded people of the importance of appreciating their loved ones, especially mothers doing double duty during lockdown. Large travel budgets were used on luxury purchases, staycations and dining out, helping lift spirits after a dreary, stressful few months. Being a niche jeweler specializing in unique and collectible pieces, our biggest asset in 2020 was our strong social media presence, our website and our location in Singapore.”

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Q UAL IT Y P UR CH ASE S From discussions with key jewelry players, a few takeaways emerge. While the number of transactions may have dropped, the quality has improved. Clients have upgraded their budgets to make more meaningful purchases, especially in the last quarter of 2020. Jewelers who invested time and resources in building a foundation of Singapore-based clients, educating customers, establishing a quality digital footprint, and clearly communicating their value proposition emerged as winners.

This was true for Vihari Poddar of Vihari Jewels, a purveyor of colored diamonds and top-grade rubies, emeralds and sapphires. “We have jewelry manufacturing workshops in Hong Kong and Italy. In both locations, unfortunately, we had to let go of personnel to survive,” she says.

“During 2020, we [noticed] a shift in buying preferences. One group of clients stayed within the $10,000 to $12,000 range, while others were only interested in top-grade goods starting from $120,000plus. There was very little middle ground. Untreated pigeon-blood rubies, pink Argyle diamonds, and Colombian emeralds were the main attractions. Our clients were looking for goods difficult to replace. Cognizant of limited supply, we maintained our pricing and upped our

[Instagram] game, which helped improve brand visibility. Since our travel costs and spending were drastically cut, 2020 was a good year from a profitability standpoint.”

Some jewelers, like BP de Silva, introduced a “virtual concierge” in addition to their social media, spending many hours interacting online with their overseas and local clients. They further adapted by allowing artisans to shift their workbenches to their homes.

“Our customers are self-purchasing, career-oriented women such as bankers and lawyers,” notes BP de Silva creative director Shanya Amarasuriya. “It was difficult for them to be home for months, maintaining a work-life balance. Jewelry is a powerful tool for self-expression, and we found after the circuit-breaker that many clients desired understated, fine, wearable, bespoke pieces.”

A MERI CA N IN F LUE NC E Today, 95% of rough-diamond processing occurs in India. How has that impacted diamond and jewelry trading between the US and Singapore?

“The US influence is still quite strong here,” says Hathiramani. “Singaporebased jewelry consumers take their cues from designs and trends in the US. We operate like a First World nation, with stringent anti-money laundering regulations, top-notch infrastructure, and an environment that encourages transparency and traceability. This has resulted in Singaporean businesses garnering a fantastic reputation, attracting discerning clientele looking for trustworthy and responsible purchases.”

Being a multicultural, multilingual society with a rich history as a trading hub, Singapore offers designers an environment where they can amalgamate influences from the West and the East for an aesthetic that transcends borders.

“Besides Singapore, the US is our main market,” says Afzal Imram, cofounder of jewelry brand State Property Fine Jewellery. “When lockdown started here, US retail was still open. We continued our manufacturing in Singapore and were able to maintain supply to our US retailers.

When the US slowed down, Singapore had opened up. Our investment in an international network [and] a strong

from travel budgets and financial-market gains, a desire to connect to the past via vintage jewels, and most importantly, love and human connections. Spending for the Chinese New Year, which fell on February 12, also contributed to the recovery.

As for what consumers have been buying, Facets Singapore reports that clients seeking natural diamonds have focused more on size and color than clarity. For BP de Silva, natural teal sapphires and Paraiba tourmalines have been popular choices. The jeweler also reports a preference for fancy diamond shapes and a shift away from traditional round solitaires. At AMTC Diamonds, the financial markets’ volatility has driven customers to request D-flawless, type IIa natural diamonds and significant stones.

Luxury jewelry brand Caratell Singapore has seen a pull toward untreated gems, with cornflower-blue sapphires emerging as a favorite. State Property, meanwhile, cites emeralds as the number-one choice.

digital presence significantly helped.

Before Covid-19, only 5% of our sales were online. In 2020, that figure jumped to 30%, [half of which came from Singapore, and the other half from] the US. With offline, we focused more on smaller finejewelry boutiques in states like Florida and Texas instead of the larger cities.”

STO N E S TH AT SE L L In the last quarter of 2020, most fineand high-jewelry businesses reported significant sales — in some instances, greater than in the same period of 2019.

Among the factors responsible for this upturn were “revenge spending” — treating oneself to make up for being confined at home so long — extra funds

SUSTAIN IN G R ECOVE RY With vaccinations underway, jewelers are cautiously optimistic about the future, but the industry’s performance in 2021 depends on a few moving parts.

“To maintain stability and consumer confidence in the diamond jewelry sector, supply has to be carefully balanced with demand,” says Hathiramani. “Profitability will lead to innovation, more resources for digital marketing, and modernization of sales practices. Consumer confidence in diamonds is intricately linked with our industry’s self-confidence. [The genericmarketing] work of the Natural Diamond Council (NDC) has also helped a great deal, but we are not yet out of the woods.”

Sustaining the recovery will be vital for 2021. By mid-year, the frequent-flying Singapore residents will be vaccinated.

As the big spenders leave for long-awaited holidays overseas, how will local jewelry purchases fare?

“Businesses reliant on international customers have been severely impacted,” says Khafi. “We hope and pray that within the next few months, a majority of the population gets vaccinated [so] Singapore can relax its border restrictions responsibly, allowing us to gradually return to where we were.” ◼ DIAMONDS.NET

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THE FINAL CUT

Trailblazing techniques Rapaport Magazine asks three designers to describe a piece of theirs that pushed the boundaries of jewelry making.

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

SELIM MOUZANNAR

In 2017, I entered the Centurion design awards in the Modern Engagement Ring category. This was a fun one for me to enter, as I interpret “modern” as the freedom to push boundaries and concepts in [this] typically traditional category. Today, we see a lot of jewelers incorporating enamel into their designs, but back in 2017, it was more of a novelty and mostly relegated to antique jewelry.

The challenges I faced in making this ring were twofold: aesthetic, [as far as] how to incorporate a color and a decorative pattern; and technical, [in terms of] the application of the enamel, the delicate setting of diamonds — which I wanted to appear almost invisible — [and] the delicate touches of milgrain, as well as the overall assembly of the ring. [At first], I was a little worried, as the ring appeared more subdued than other pieces competing. I thought to myself, for this ring to win, it would require a discerning eye to see past the sparkle and appreciate the conceptual take on what an engagement [ring] could look like. With the results tallied, I was delighted to hear my ring had won first place! I still have that ring. I’ve actually made a couple on special order, but can’t bear to part with the original.

L ARISSA MORAE S There is a funny story behind the creation and design of my Gladioli necklace from the Van Gogh’s Inspired collection.

I had a vision in my head of creating a contemporary necklace, slightly offbalance in design and yet aesthetically beautiful — although my goldsmith did not entirely agree with me.

When I initially brought my idea to the goldsmith, a battle ensued. He believed the necklace shouldn’t be unbalanced and there were rules to follow when creating a piece such as this. He believed there should be symmetry to align the piece with a woman’s chest, but I had to remind him that I’m creating contemporary jewelry, and with that, there are no rules to follow. After much negotiating and determination on my end to bring my design to life, he changed his old ways of thinking and helped me produce a necklace that looked exactly as I had always envisioned. I am forever thankful my persistence and design came through in the end, and this necklace ended up winning first place at the MJSA Vision Awards. To this day, it is one of my proudest designs, and while the necklace hasn’t sold yet, it is currently in New York City with my PR team, patiently awaiting the perfect person to grace with its beauty.

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One of the craziest pieces I had to design recently was an ear cuff created for a private client. It was a mixture of D-flawless diamonds of different shapes dancing in full harmony. I wanted to create an explosion of diamonds on this ear cuff to feel their sparkle even more.

The design is in balance with the volume of the stones and their settings.

It is a farandole by which I pay tribute to multiple paradoxical sizes that end up coming together in harmony. I accomplished this by keeping a lightness and respecting the codes and techniques of fine jewelry. All of their connections are a poem that enchants the woman wearing it — I will even say an anthem to pleasure, and especially joy. These exceptionally pure and white diamonds with their icy side blend warmly together to give birth to a contemporary and timeless soul.

NOA M CARVER

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