rapaport feb 2016 v39 n2

Manufacturers of large stones and fancy colors

FOREVERMARK STRENGTHENS PARTNERSHIPS Philippe Mellier, CEO of the De Beers Group of

Companies, reassured partners of the Forevermark

diamond brand that 2016 would be a year of renewed

working relationships. Speaking at a cocktail reception hdd in

New York C ity after a partners' meeting in January, Mellier said

that while 2015 was a tough year for

many in the diamond industry. he believed Forevermark shone through

what he called a "perfect storm." Mellier described how 2015

began with retailers slowing down

restocking due to a softening

consumer demand at the end of

2014.ln addition, an evenhla1

slowing of growth in China

left many China~focused firms

stranded with excess inventory.

The compounded problems posed

by banks providing lower leveL~ Philippe Me/lier of financing had created working

capital and profitability issues among cutters and polishers,

he said . This resulted in distressed selling in the midstream,

contributing to polished prices dipping, leading to even slower

retail buying. Mellier said that De Beers recognized the need

to respond effectively to turn things around.

De Beers had taken measures to bolster the diamond

industry, according to Mellier, including allowing

sightholders increased deferrals, as well as rough diamond

price adjustments. The mining company sought to boost

industry confidence around product integrity by launching

a melee testing service, and invested "tens of millions of

additional dollars" in consumer marketing.

Forevermark diamond sales grew 33 percent year on year

from January to November in 2015. Me11ier added that partners

have told him their Forevermark dianlond~ achieve five margin

point<! higher than generic diamond~. H e said that Forevermark

hopes to provide partners a competitive advantage and drive a

premium that would help achieve a more profitable diamond

business. M ellier emphasized that Forevermark would continue

8 Rapaport February 2016

NEWS REVIEW ALROSA Keeps

Prices Stable

Rio Tinto Restructures

GIA Expands

Botswana Facility

World Diamond Congress

in Dubai

Turkey Partners

withWDM

to work on consumer marketing, undertake scale research and

expand on it<! responsible sourcing message. Charles Stanley,

president ofForevermark, said that the brand would work with

retailers to more effectively bring the emotional message of

diamonds to consumers, and to move a\vay from selling grading

reports. Selection of a diamond is beyond its 4C's, Stanley said,

and retailers need to communicate that to their customers.

Forevermark will teach retailers how to focus on the message of

the quality and integrity of its branded diamonds, and hopefully

drive sales home, he explained.

DE BEERS SALES JUMP De Beers sales of rough diamonds skyrocketed

118 percent to $540 million in January - its first

cycle of2016 - up from $248 million in its previous

and final cycle of2015. The revenue figure includes

sales to sightholders, auction clients and internal sales to

De Beers government and local partners, David Johmon, head

of ntid~treanl conm1Unlcations for De Beers, told Rapaport News.

Rough diamond demand broadened across the entire product

range as cutting and poli~hing factories begin to increase their

activity, De Beers said in a statement.

• D e Beers attributed the successful cycle to firmer polished

prices led by low levels of rough diamonds purchased by the

midstream in the fourth quarter of2015 and a subsequent

reduction in manufacturing.

• D e Beers would continue to be flexible in applying its supply

rules, said Philippe Mellier, CEO of D e Beers, speaking to

sightholders at the sight in Gaborone,Botswana .

• Rough diamond sales for the full year of2015 slumped

40 percent to 20.6 million carat<! as production fell

12 percent to 28.7 million carat<! . Sales for the quarter

plunged 55 percent year on year to 3.6 million carats.

D e Beers only provided quarter results by volume in its

report. Anglo American is expected to publish De BeeN

full earnings report on February 16,2016.

• Most of the production reduction came from its largest

source, Debswana, De Beers partner in Bot<!wana. Debswana

curtailed production 16 percent to 20 .4 million carats for

the fi111 year of2015 in light of trading conditions.

RAPAPORT FEBRUARY 2016

"It is for more tf an educational process in sellillg colored stones. Customers typically

(ome 111 armed with some knowledge if at least the 4Cs of diamonds. Explaining

about treatmCllts has to be part if the repertoire so they understand the reality

behind the colored stones tiler are huyillg and that most gems are treated. With

colored stOtlCS, we're usually creatillg the passion for tllat particular gem . . . "

jOhtl Carrer Presidetll

Jack Lewis Jewelers BloolHinguJtJ, nlinois

126 10 Rapaport February 2016

COVER 42 THE COLOR OF MONEY

Country of origin and treatments impact colored gelU~tone prices.

NEWS REVIEW 8 FOREVERMARK STRENGTHENS

PARTNERSHIPS De Beers Sales Jump.

28 RIO TINTO RESTRUCTURES Peregrine Settles Royalty Litigation; Diameor Arranges Loan Deferral; ALROSA Keeps Prices Stable; Murowa to Boost Production.

30 GIA EXPANDS BOTSWANA FACILITY AGS Offers New Service; World Diamond Congress in Dubai; lsrad Sues for GrantTerms Breach; LOB Releases Guide.

32 TIFFANY UPDATES BUYBACK PROGRAM Extell Acquires Land fur New Tower; Hatton Garden Heist Gang Convicted; Turkey Parmer'S with WDM; Element Six Sues lb.

INDUSTRY 18 SUPPLY SHORTAGES

PUSH PRICES UP Market sentiment improved in January. However, suppliers would rather have a market driven by ri.~ing demand than the prevailing shortlges in supply.

34 NEW CONSUMER MIND-SET DAMPENS HOLIDAY SALES Lower prices did lirde to stimulate demand as consumer<; seek experiences over material purchases.

RAPAPORT FEBRUARY 2016

ON THE COVER Emerald and diamond

neck cuff by Joseph Gad. See The ColoroJMoney,

page 42.

•

Rapaport DialTlOl'lCl Report (U5P5 0712·350; !S5N; 0746-9829) is published monthly by Rapaport USA Inc. 133 East Warm Springs, Las Vegas, Nevada 89119. Editorial, design and marketing services are provided to Rapaport Diamolld Report by Diamond Research and Marketing Institute LLC

Subscriptions: U.S. $180 per year, Overseas $350 to Rapaport Diamond Report, '33 East Warm Springs, Las Vegas, Nevada 89119. Periodical postage paid at Las Vegas, NV, and additional mailing offices.

POSTMASTER: Send address changes to Rapaport Diamond Report, '33 East Warm Springs, Las Vegas, Nevada 89119.

Copyright<> 2016 by Rapaport USA. All Rights Reserved. Reproduction is strictly prohibited.

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INTERNATIONAL 56 U.S. RETAIL

• , .

Charm jewelry boL~ters sales.

58 U.S. WHOLESALE

, • ,

Market conditiom continue the same.

60 HONG KONG Tough start to new year.

62 ISRAEL Hong Kong show will be market barometer.

64 INDIA Rough imporo lowest in four decades.

66 RUSSIA Jewelry sales shrink .

68 ANTWERP M ovement slow and cautiou>.

RETAIL 106 AN ARTIST'S EYE

Originality and creativity are on display at French Designer Jeweler in Scottsdale,Arizona.

108 RETAILRAP T his month Rapaport M agazine asks retailers, " How are colored gemstones selling?"

110 RETAIL BULLETIN

112 RETAIL SCOPE

COLORED GEMSTONE 116 DOUBLE VISION

Backing tramlucent pastel gemstones with hematite or mother-of-pearl to create doublets add~ new colors and texture to gems.

LEGACY 118 PSYCHOLOGY OF DESIRE

T he desire to create adornments with beautiful gemstones i.~ as old as civilization. And the desire to O\\m

these jewels, says a new book, has played a major role in shaping hi.~tory.

STYLE 120 THE JOY OF COLOR

A dose-up look at the 2016 AGTA Spectrum Awards™ winners.

126 DESIGNER LINES

128 JEWELRY CONNOISSEUR

ECONOMICS 82 PARCEL PRICES 86 RAPNET PRICE SHEET 88 TRADE SHEETS 96 ECONOMIC BULLETIN 98 IMPORT EXPORT

DEPARTMENTS 15 LETIER FROM EDITOR 94 ADVERTISER DIRECTORY

100 CALENDAR 102 TAKE NOTE

MANUFACTURING CORPORATION

62 W 47th St #1 4All, NYC· 212.827.0328 [email protected]· RioDiamond.co

Hong Kong International Diam.ond, Geln & Pearl Show Asian World Expo 2 - CON21

March 1 - 5

Baselworld Ha113.0 /E09

Marc h 1 7 - 24

RAPAPORT. Volume 39 Number 2

IDITORIAL EDITOR IN CHIEF: Amber M ichel le EXECUTIVE EDITOR: Phyl lis Schil ler SENIO R EDITOR: Joyce Kauf SENIOR ANALYST: Avi Krawitz ASSOCIATE EDITO R: Shuan Sim

INTERNATIONAL CORRESPONDENTS: U 5 RETAIl: Lara Ewell HONG KONG. Mary Kavanagh INDIA: Zainab A. Morbiwala RUSSIA: Svetla lla She lest BELGIUM: Marc Goldstein

COLORED GEMSTONE: Shery l Jones SPECIAL CORRESPONDENT: Et tagale Blauer

DISIGN PHOTO EDITOR: luciena Kardonsky SENIOR DESIGNER: Irena Sap ilak A SSOCIAT E DESIGNER: Ira Cook DESKTOP PUBLISHING CONSULTANT: Pet e Lambusta

MARKITING VP MARKETING: Ei leen Farrel l

PHOTOGRAPHY: Don Kozusko

FOR ADVERTISING INFORMATION Eileen Fa rrell Tel: 646 572 .8560, eileen@d iamonds_net TO CONTACT EDITORIAL Amber Michelle, Editor in Chief Tel: 212 535 .2283, amberCdiamondsnet The above editorial, design and marketing services are provided to Rapaport M a gaz ine by Diamond Research and Marketing Institute LLC. 420 Madison Avenue, 7th floor New York, NY 10017 Te l: 212 354.9100 Fax: 2128400243 d rm i@d iamonds.net PUBLISHER: Martin Rapaport A SSOCIAT E PUBLISHER: Rivka Rapaport A SSISTANTS TO PUBLISHER: Ezi Rapaport, Mordy Rapaport

RAPAPORT 133 East Warm Springs Road; Suite 100 Las Vegas, Nevada 89119 Tel: 702 .893 .9400 Fax: 702 893 9440 info@Rapapo rtcom www.Rapaport .com

RAPAPORT BELGIUM Hovenierstraat 53, Box 13 B· 2018 Antwerp, Belgium Tel: 32.3 232 3300 Fax: 32 3 .232 .4990 belg ium@Rapaportcom

RAPAPORT ISRAEL Betzalel St . 54, Suite 1362 Ramat Gan 52521, Israel Tel: 972.3.6 13 .3330 Fax: 972 3 613 3111 israel@Rapaportcom

RAPAPORT HONG KONG Unit 2206, Kinwick Centre 32 Hollywood Road Centra l, Hong Kong Te l: 852 .2805 .2620 Fax: 852 2805.2605

RAPAPORT LNOIA 101, The Capital. Plot No C·70, BKe Bandra East, Mumbai 400 05 1 Tel: 91 .22.6628.6500 Fax: 9 1 22 6628.6555 india@Rapaportcom

RAPAPORT INDIA- SURAT 501·504 C W ing, Diamond World Build ing, Mini Bazaar, Mangadh Chowk, Varachha Road, Sural 395 006 Te l: 9U6U54.9583 Fax: 9 1 261 254.9584 india@Rapaportcom

RAPAPORT DUBAI Dubai Diamond Excha nge Level 2, Office D06 Almas Tower, Jumeirah Lake Towers PO Box 340600 Dubai, UAE Tel: 971 .4 .363 .8403 Fax: 97 1 4.369 7243

Subscriptions: U.S, $180 per year. Overseas $350 to Rapaport Magazine, 133 East Warm Springs, Las Vegas, Nevada 89119, Copyright<> 2016 by Rapaport USA. All Rights ResefYed. Reproduction is strictly prohibited. Rapaport Diamond Reporr-, Rapaport Magazine-, Inde~, Index-The Internet Diamond Exchange-, Jewelry Connoisseur-, RapNe", Rapaport-, Diamonds,Ne" and JNS- are trademarks of Martin Rapaport,

observations

he mystery and allure

of co lore d ge m ston es

has seen a ren aissan ce in the

past couple of years as notable rubies and

Oscar Heyman

sapphires garner record prices at auction. Rubies and sapphires

were the top-selling lots in several sales at C hristie's and Sotheby's in

2015. In the world of colored gemstones, two things are of paramount

importance when discussing price - country of origin and treatment,

or lack thereof. Some of the most rare and valuable colo red gems

may originally be from mines that are no longer producing, such as

sapphires from Kashmir. Some stones are in a category of their own,

such as emeralds from the mines in Colombia or rubies from Burma,

which are highly coveted for the special glow of their color. Specific

geological factors may impact the color of a stone and in some cases

may leave certain characteristi cs that give clues as to where the stone

comes from . Gemstones are commonly treated to enhance color.

Finding a gem that comes out of the ground already the perfect color

is a rarity. So of course it is more valuable than a gem that has been

treated in some way. Gemologists and laboratories act as detectives to

discover the secrets of colored stones so that a valuation of the gems

can be made. In this issue of Rapaport Magazille,"The Color of Money"

takes a look at the various issues that contribute to the value of rubies,

emeralds and sapphires.

Editor- in-Chief

Rapaport February2016 15


r "' I-J L.- '-'

)

Market sentiment improved in January. However, suppliers would rather have a market driven by rising

demand than the prevailing shortages in supply.

iamond dealers expressed so me optimism about th e market in January and were confident that

the worst appears to have passed for the trade. Sentim ent improved as polished prices continued to finn amid supply shortages, while rough demand increased. However, uncertainty lingered as consumer demand remains sluggish due to the weak global economy and plunging stock market~ .

While the focus of the trade shifted from the U.S. to China ahead of the Chinese New Year Spring Festival early this month, expectations about China diminished as the Shanghai Stock Exchange slumped 17 percent from January 1 to 25. China's economic growth slowed to 6.9 percent in 2015, while weaker-than-expected D ecember manufacturing data signaled that the slowdown is likely to continue into 2016.

By AVI KRAWITZ

Weak sentiment about C hina had a ripple-effec t on o th er markets, with the Dow Jones Industrial Average (Dj l) falling 8 percent in the first three weeks of the year. Diamond dealers looked on with caution as they recognized that C hina would not stimulate global diamond demand in the same way it had over the past decade.

Therefore, while polished demand from Mainland C hina and Hong Kong improved in November and December as jewelers prepared for the Spring Festival, their buying slowed in january. j ewelers simply had enough goods for the season, while the consumer landscape remains uncertain as China's economy tran sitions from being export-driven to one that is focused on domestic consumption. Consequently, expectations for jewelry sales during the Spring Festival and subsequent diamond trading were muted.

LOWER TRADING Diamond demand was fairly stable

in January, with steady U.S. demand compensating for weaknesses in China and other emerging markets. There was some buying for inventory among U.S. jewelers looking to replenish goods sold during the holiday season. However, on the whole, demand was selective and the price increases experienced in the past few months were driven by supply shortages rather than higher demand.

Th e RapNet Diamond In dex (RA PITM) for 1-carat, Gemological Institute of America (G IA)-graded diamond s rose .9 percen t from January 1 through 25 . RAPI for . 30-carat diamonds grew 4.5 percent, while RAPI for .SO-carat diamonds increased 3.9 percent. RAPl for 3-carat diamonds edged down .2 percent during the period (see chart at right, top).

There is steady demand and shortages for .30-carat to 2-catat,D to H ,VS to S12, RapSpecA2 (triple EX, none) diamonds. Demand for melee was slightly weak with dealers still holding a lot oflowerquality inventory after the Rapaport Melee Index declined 16.9 percent during 2015.

However, trading is still well below levels recorded in previous years as businesses across the distribution chain are carefully managing their inventory. Polished trading dropped significantly in the fourth quarter of2015, as evident in the data published in the major diamond centers. Polished export~ from India fell 17 percent year on year during the final three months of the year, while exports from lsrae1 dropped 16 percent (see chart at right, bottom). Belgium's final 2015 data was not available at press time.

RapNet Diamond Index (RAPFM)

5.0

4.0

3.0

2.0

1.0

0

-1.0 1 3 5 7 9 11 13 15 17 19 21 23 25 JANUARY 2016

.30 ct - .50 cl - 1 01 - 301 -

The RapNet Diamond Index (RAPITW) is based on the average asking price in hundred $Ic!. oflhe 10 best priced diamonds, fO( the top 25 quality round diamonds (D-H, IF·VS2, GIA-graded, RapSpec·A3 and better), which are offered for sale on RapNet- Rapaport D~mond Trading Network .

4Q Polished Diamond Trade at the Major Centers $6,000

$5,000

UI $4,000 C o ~ $3,000

U} $2,000

$1,000

. 402013 . 402014 . 402015

Based on data published by India's Gem and Jewellery Export Promotion Council (GJEPC) and Israel's Economy Ministry. AJI data is gross (before returns).


4Q Rough Diamond Trade at the Major Centers

• c .Q

" ~

$4,500

$4,000

$3,500

$3,000

$2,500

$2,000

$1,500

$1,000

$500 $0

INDIA ROUGH

IMPORTS

INDIA ROUGH

EXPORTS

. 402013

ISRAEL ROUGH

IMPORTS

. 40 2014 .40 2015

ISRAEL ROUGH

EXPORTS

Based on data published by India's Gem and Jewellery Export Promotion Council (GJEPC) and Israel's Economy Ministry. All data is gross (before returns).


ROUGH ON THE RISE D espite lower trading, inventory

levels have been depleted, especially for better-quality RapSpec A2 (triple EX, none) diamonds. Shortages became increasingly evident in the past few months as manufacturers kept polished production at an estimated 30 percent below capacity after the November Diwali break and dramatically cut back on their rough purchases. India's rough imports fell 19 percent year on year during the fourth quarter, while Israel's rough imports slumped 33 percent (see chart at left) .

Rough demand increased notably in January as manufacturers started to raise their factory output in order to fill the polished supply gaps. De Beers and ALROSA reportedly sold all the goods on offer at their respective January sales.

D e Beers re duced pri ces an es timated 5 percent to 7 percent at its sight, while the company reported rough sa les - including at its sight and auctions - valued at $540 million in January, compared to $248 million in December.

Trading on the secondary market improve d, w ith De Beers boxes reportedly selling for cash at premiums of around 5 percent. Rough demand on the auction circuit also rose, with some market sources noting a double-digit increase in auction prices during the January cycle.

CONTROLLED MARKET One sightholder suggested th at

De Beers goods are now the most attractive on the market following the January price correction . While 2015 was characterized by excess supply in

the market, De Beers is expected to continue to limit its supply and keep prices relatively stable at upcomingsight~ .

Johan Dippenaar, chief executive officer (CEO) of Petra Diamonds, said he expec ts prices to remain steady in the first half of2016 after Petra's rough price index fell 9 percent in the final six months of2015. Petra's sales slumped 28 percent year on year in the fiscal half-year that ended December 31, with the average price achieved at its auctions down 23 percent (see chart at right).

As rough prices are anticipated to remain stable and supply limited, diaman taires are hoping that polished prices will continue the recent uptrend and that trading level~ will rise along with demand. However, most anticipate that prices will continue to be supported by shortages as rough bought in January is only expected to come to market as polished in three to four months. By then, dealers should have a better sense of whether demand is improving in 2016.

For now, much hinges on the Spring Festival, as a strong retail season in China will motivate jewelers to return to the market for goods and help stimulate diamond trading after the festival. Dealers have described the Hong Kong shows from March 1 to 7 as an opportunity to assess that prospect. But while stock markets shunped, oil prices plunged and the outlook for global economic growth slowed in January, few expect a boom in diamond demand.

Rather, trends in January suggested that the diamond market is likely to remain in a supply--controlled environment in the first half of2016, while the industry still need~ to figure out how to stimulate demand in such volatile economic conditions ...

Petra Diamonds Sales & Average Price

$350

$300

~ $250 a = $200 :;; '" $150 (/)

::J $100

$50 I $0

1H 2H 2010

I 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H *

2011 2012 2013 2014 2015 2016

• Sales - Avg . Price

Based on data published by Petra Diamonds. • Fiscal half year

$250

$200

$150 ~ ~

$100 g

$50

$0

Rapaport February20/6 21

ALROSA KEEPS PRICES STABLE ALROSA did not lower diamond prices at its

contract sale in January 2016. Andrey Zharkov, president

of ALROSA, said the company saw no reason to lower prices,

especially given that they rose slightly at the end 0[2015, reported

Russian news service lnterfax. Clients told R.1lpaporr News they

were allowed to defer up to 70 percent of allocated goods and

that all goods were sold at the sale.

• ALROSA's production increased 6 percent year on year to

38.3 million carats, driven by the launch ofit~ new pipe and the development of its existing assets.

• For the full year of2015,ALROSA sold 30 million carats of

diamonds . Revenue was set to reach at least $3.4 billion.

• ALROSA sold 7.1 million carats of diamonds, including

4.1 million carats of gem~ql1a1ity diamonds. Gem-quality

diamonds were sold at an average price 0[$:166 per carat and industrial diamonds were sold at an average price of

S 1 0 per carat.

RIO TINTO RESTRUCTURES Simon Trott, currently managing director of

Rio T into's salt and uranium businesses, will take on the

additional responsibilities as managing director of

the company's diamonds business. Trott will be

replacingJean-Marc Lieberherr, who was let go as part of

the miner's restructuring. Lieberherr, who has been

with R ioTinto for ten years, has held the position for

two and a half years . Trott will report to Alan Davies, chief

executive of diamonds and minerals. Rio Tinto has been

Simon Trott cutting costs and reducing debt

in its restructuring, including selling its thermal coal asset\ in Australia in January 2016.


PEREGRINE SETTLES ROYALTY LITIGATION Peregrine Diamonds Ltd. announced that it has

settled its litigation with BHP Billiton Canada

Inc. (BHPB) relating to the Chidliak royalty. In an agreement dated February 2, 2012, Peregrine granted

BHPB 2 percent royalty on future mineral production, including diamonds, from its Chidliak project in

Nunavut, Canada. The dispute arose when BHPB transferred the royalty right~ to South32 Limited - on

entity it created to house it~ noncore assets - in May 2015. In exchange for Peregrine dropping the litigation and

a cash payment ofS125,000, BHPB has agreed to terminate the royalty agreement.

DIAMCOR ARRANGES LOAN DEFERRAL Diamcor Mining Inc. announced that

Tiffany & Co. Canada , a regional subsidiary, has ag reed to payment deferrals and a maturity date extension for a period of six months. Interest will

continue to accrue on the outstanding balances during this period, with payments of both principal and interest to

resume on July 20, 2016. Tiffany & Co. provided Diamcor financing to advance the Krone-Endora at Venetia project

in South Africa in exchange for first right of refusal and the rights to buy up to 100 percent offuture production

from the site.

MUROWA TO BOOST PRODUCTION Murowa Diamonds P vt. Ltd., a former unit of

Rio Tinto Group in Zimbabwe, plans to produce more than 1 million carats in 2016, according to Bloomberg. Murowa's production in 2015 was 250,000 carat~, and the

mining company will inject $60 million over the next four years to achieve the increase. Lovemore Chihota, a spokesman

for Murowa, said that the expansion will go ahead despite the recent decline in diamond prices . He added that Murowa

intends to be the biggest diamond miner in the country. Rio T into sold its 78 percent stake in Murowa in June 2015

as it exited the country.

AGS OFFERS NEW SERVICE The American Gem Society (AGS) launched a

new grading service for diamonds set into jewelry.

The "Mounted Diamond Evaluation Report" is presented in a credit card-sized format and includes a sample photo

of the graded jewelry. The service is for diamonds larger

than .18 carats. The report will include:

• Color and clarity grades, along with total carat weight

provided by the manufacturer.

• A description of the jewelry and verification of the

mounting stamp indicating the precious metal quality.

• Confirmation that the diamond is natural and untreated.

WORLD DIAMOND CONGRESS IN DUBAI

facility in Gaborone, Botswana inJanuary 2016 as

part ofits beneficiation efforts. The Gaborone facility was fiNt set up as a diamond grading lab in 2008, and the

expansion will include more classroom space. The move is

part of CiA's goal of making Gaborone the destination for

industry-leading gemological education in Africa. Today,

CLA employs 95 people in Gaborone, of whom 65 were

trained by C IA as diamond grading professionals.

ISRAEL SUES FOR GRANT TERMS BREACH Israel's Civil E nforcement Unit has filed a

claim to a Jerusalem court on behalf of the Ministry of the E conomy and Industry suing companies from the Samuel-Rozenbaum group and their owners for $1.3 million.

The 37th World Diamond C ongress, the • According to the suit, Samuel-Rozenbaum received a

biennial meeting of the World Federation of $1 million grant in the early 1990s to boost Israel's diamond

Diamond Bourses (WFDB) and ,---------------, exports but fraudulently failed to pay

International Diamond Manufacturers royalties owed to the state.

Association (IDMA), will take place in • The suit demands that defendants

Dubai, United Arab Emirates (UAE) from pay back $1 .1 million plus linkage

May 16 to 19, 2016. The meeting will focus differential~, interest and legal expenses

on the themes of responsibility, transparency of$100,715.

and sustainability, Ernie Blom,WFDB's

president said in a statement.The themes will

be di.~cussed by WFDB 's 30 president.~ and

more than 200 representatives of the global

diamond industry. Attendees will include

diamond producers, representatives

from diamond countries as well as from

service organizations such as labs and bank.~ . Blom

said that the meeting will seek to advance support for

generic marketing of diamond via WFDB's Diamond

Mark initiative and to create stronger links with

the Diamond Producers Association (OPA) .

GIA EXPANDS BOTSWANA FACILITY The Gemologic al Institute of Americ a (GIA)

opened an expanded laboratory and classroom


LOB RELEASES GUIDE The London Diamond Bourse

(LDB) has partnered with British

government agency Insolvency

Service to release a guide to prevent

Ernie Biom diamond investtnent scams. The document dea1~ \vith companies purporting to offer diamond~

as an invesnnent in the light of rising incidences of people being

fraudulently sold diamond~ and precious stones that do not exist

or at highly inflated prices. Contents of the guide include:

• The working practices of known scanuning companies and

highlight that LDB members are subject to regulation.

• H ow consumers can seek redress through arbitration.

• Information about companies that are part of the scam

offering false recovery services to viCtinlS.

TIFFANY UPDATES BUYBACK PROGRAM Tiffany & Co. announced its board of directors

has approved a new stock repurchase program. It will authorize the repurchase of up to $500 million of the COOUllon

stock available through open market transacrion~, block trades or

privately negotiated tramactions.

• P urchases will be discretionary and will be subject to the

company's liquidity needs. The program will expire on

January 31,2019.

• The new program replaces the company's existing

stock repurchase program announced in March 2014 ,

which authorized the company to repurchase up

to $300 million of its stocks on the

open market.

• As oflate January 2016,

approximately $61 million of stocks

remained available for repurchase

under the prior program .

ELEMENT SIX SUES IIA Element Six Technologies Ltd. , the

synthetic diamond supermaterials

company of the De Beers Group

of C ompanies, began legal action

EXTELL ACQUIRES LAND FOR NEW TOWER Gary Barnett, president ofExtell Development,

developer of the htternational Gem Tower in New York City,

has acquired two nearby properties from Thor Equities

and SL Green Realty, reported real estate trade publication

T ile Real D eal. The new properties, 562 Fifth Avenue and

564 Fifth Avenue, would allow Barnett to move forward with

plans for another building near his International Gem Tower

in the Diamond District. Records show that the two deals cost

$109.5 million. All parties declined to comment.

TURKEY PARTNERS WITH WDM Turkish bourse Borsa Istanbul

and the World Diamond Mark

Foundation (WDM) signed an

agreement to institutionalize

diamond trading in the country.

Tuncay Dine, CEO offiorsa Istanbul,

said that the decision to join the WDM

came at a crucial moment as diamond~

and diamond jewelry faces significant

competition for market share in the

luxury consumer product market.

against Singapore-based synthetic Alex POPOI' Alex Popov, chairman ofWDM, said

that Turkey will play an important role as diamond producing company TIa Technologies Pte. Ltd.

in January. Element Six alleged that Ila Technologies

infringed its patents for a diamond material with high optical

transparency and low crystalline stress, and its manufacturing

methods. Element Six believes lIa Technologies is exploiting

the patents for commercial gain in both industrial and

jewelry sectors .

Ii a Technologies responded to Element Six's claims and

said it will challenge the validity of Element Six's patents .

Vishal Mehta, CEO of Iia Technologies, said that he

believes the company has not infringed on Element Six's

claims an d has entered its appearance in the High Court

in Singapore. Bo th companies have said that they will not

conul1ent any fur ther on the matter through the duration

of the legal proceedings.


a WDM ambassador for its role as a gateway for trade between

Europe, the Middle East and Asia.

HATTON GARDEN HEIST GANG CONVICTED Three more people were convicted inJanuary 2016

in connection with the April 2015 burglary in

Hatton Garden, London's diamond district. The ruling

brought the total number of people convicted or who have

pleaded guilty to nine. The newly convicted are: Carl Wood,

William Lincoln and H ugh Doyle. The leader of the gang,

Brian Reader, had admitted his guilt last year. The gang had

drilled through a 50 centimeter-thick concrete wall and broke

into 73 security boxes, affecting 39 victims and absconding

with good~ worth about $20 million.

- Additional reportillg provided IJY Acquire Media .

•

INDUSTRY

NEW CONSUMER MIND-SET HOLIDAY SALES

Lower prices did little to stimulate demand as consumers seek experiences over material purchases .

any u.s. jewelry retailers - and the retail industry in general - experienced

modest sales growth during the November and D ecember holiday period in 2015 . Holiday sales grew 3 percent year on year du ri n g that period to $626 .1 billion , according to the National Retail Federation (NRF). That growth fell short of NRF's targeted 3 .7 percent, and a far cry from the 4.1 percent sales boost in 2014. Lower oil prices have led to falling consumer prices and greater spending power, but retail buying did not increase accordingly. Coupled .. vith the strong US. dollar, tourism grew at a low rate and those that visited spent l ess .A~ a result, many jewelers and tourism-dependent retailers saw lackluster sales from international visitors.

"DISINFLATION" AND CURRENCY CHALLENGES "It's been a tough season and a disappointing year," said

Jack Kleinhenz, chief economist at NRF." It's not that we have weak demand, but rather weak prices. R etailers don't have pricing power anymore." He called the falling j ewelry and general merchandise prices as a "disinflation" that has been a big i<;.me,not just in the US. but also around the world. R etailers had to be price competitive to even move products.

Furthermore, consumers had the benefit of technology, allowing them to go online to check prices at one store and then perhaps decide to make the purchase at another. "Firms that were able to implement technology well showed stronger sales," Kleinhenz pointed out. Mobile conunerce in the US. soared 59 percent year on year to $12.65 billion in November

r

and December, according to estimates from comScore,a company that measures online

analytics. That number accounted for 18 percent of total digital conunerce up from 13 percent in 2014.


Kleinhenz noted that midmarket retailers such as Macy's and some luxury retailers such as Tiffany & Co. did not do as well as they had

By SHAUN S",

hoped during the holiday period .These companies have traditionally counted on their sales b ei ng bolstered by tourists who visit the major cities in the U.S. during the holiday period. The strong U.S. dollar has made it more expensive to vi si t the country and spend, adversely impacting retailers on both the East and West Coasts, Kleinhenz elaborated. According to the U.S. National Trade and Tourism Office, international visitors to the U.S. in 2015 was forecast to grow at its slowest rate - a growth of just 300,000 visitors to 75 .3 million, representing only .4 percent. The country had enjoyed an average growth of 6 percent each year since its recovery from the 2008 recession.

The strong currency also adversely affected sales gains made in overseas regions (see Holiday Season 2015,opposite). Tiffany & Co. and the various jewelry maisons under the Richemont balUler were among some brands that saw their overseas sales growth in Europe and Japan either diminished to modest numbers, or even plunged into the red.

LESS BLlNG, MORE EXPERIENCES Kleinhenz also noted that consumers have continued their

gradual move away from material purchases and toward experiential purchases, such as travel and dining. "There was a pent-up demand for services after the recession," he explained. The retail sectors that did do well were furnishings and home building supplies. Consumers have become conservative and debt levels have gone way down, and people are investing more in their houses. The sectors that fared the worst were apparel and accessories. "There was an excess supply of winter clothes due to the unusually warm weather we had, and there had been an inventory buildup from sununer into fall," Kleinhenz said.

Some breakthrough in product innovation would make consumers start spending again , speculated Kleinhenz. "Consu merism as we know it has changed. People are not going to overleverage themselves to buy goods as they become satisfied with what they have." He described

HDTVs and 4K TVs as innovative products that were sales boosters in 2014, but 2015 - other than technology wearables such as Apple Watches and Fitbit5 - had been largely missing such breakthoughs.

Looking ahead, Kleinhenz expects consumer prices to stay down in the early part of2016, and might not pick up until midyear or the end of the year, when wages might start to increase.But he predicted, while the year might not be spectacular, as the U.S. economy is forecast to grow at subdued rates of around 2.5 percent, it will not be terrible. "The economy is not as fragile as some people have been suggesting," he concluded.

SIGNET Signet, the largest jewelry retailer in the U.S., enjoyed

growth across all its major divisions. • U.S.- based Sterling Jewelers division - comprising

Kay Jewelers, Jared and other regional brands - saw an overall 7.2 percent year-on-year boost during the holiday period, with Kay growing 8.9 percent and Jared, 6.8 percent. T he success of Kay was attributed to key collections and ca tegories, including the recently introduced Ever Us two-stone rings.Jared saw its new store operations, marketing and merchandising initiatives pay off.

• Zale division sales were driven by material increases at flagship Zales stores as well as Piercing Pagoda kiosks. The Ever Us and other collections, as well as gold jewelry, were important sales drivers in the kiosk channel.

. The UK.jewelry division enjoyed higher same-store sales but saw gains offiet by unfavorable currency exchange rates . Branded bridal, diamond fashion jewelry and beads primarily drove same-store sales.

. Econunerce sales were up 10.9 percent to $139.7 million.

TIFFANY & CO. Tiffany & Co. attributed restrained consumer spending

and uncertain glo bal eco nomic conditions to having negatively affected its holiday earnings.

. Th e Am eri cas' lower sa les of 7 perce nt were exacerbated by the decline in foreign-tourism spending in N ew Yo rk and o ther U .S. markets. Total sales in C anada and Latin America rose .

• Asia Pacific sales exc1udingJapan plunm1eted 11 percent during the period. C hina's strong continued growth for Tiffany & Co. was offset by weaknesses in H ong Kong and Singapore. Japan 's sales ga ined 12 percent due to strong tourist numbers, though its gains were reduced to 9 percent after strong US. dollar considerations.

. Europe's 4 percent sales increase in constant exchange rates was turned into a contraction of 4 percent after currency considerations. Sales rose in the u.K. but notably declined in

France, with mixed performance across Continental Europe. . The company forecasts that the strong dollar and global

macro challenges might result in mini.r1131 growth in net sales and earnings for 2016.

RICHEMONT Switzerland-based Richemont's holiday sales results were

wrapped into its third-quarter reportThe luxury group fared well, helped by the weakness of the euro currency, which R.ichemont uses in its reporting.

. The group saw sales declining in November 201 5 for Europe, which primarily reflected lower levels of tourislll .

• Trading in Asia Pacific remained challenging as demand for watches continu ed to contrac t. Mainland C h ina demand improved, but Hong Kong and Macau reported significantly 10wer sales.Japan saw growth , although at lower rates due to seasonal factors such as Chinese touri<;m .

• Sales in the Americas remained subdued, although jewelry showed growth over soft demand for watches.

. The group 's j ewelry maisons, including C artier, Van Cleef & Arpels and Piaget, were the top performers, limiting decline for the segment as a whole. The jewelry mai<;ons' sales improved by 2 percent while watchmakers' sales ticked up by 1 percent .

. Richemont expec ts that the challenging trading environment would likely preva il until March 2016, negatively affecting operating profit for the year . •

HOLIDAY SEASON 2015 COMPANY Signet St erling Division Zale Division U. K. Division

Tiffany & Co. Americas Asia Pacifi Japan Europe Other Regions

Richemont (3Q) Jewelry Maisons Europe Asia Pacifi Americas Japan Middle East & Africa

TOTAL SALES $1 .95 billio n $1 .2 billion $532.9 millio n $217 millio n

$961 millio n $505 millio n $187 millio n $123 m illion $128 millio n $1 9 million

$3. 16 billio n $1 .73 billio n $937. 5 millio n $1 .12 billio n $556.3 millio n $303.5 millio n $245.2 millio n

CHANGE FROM 2014* 5% [6.3 %1 7.2% 2.3% [5 %1 .9 % [4.9%1

-6% [-3% 1 -7% [-5%) -11 % [-6 %1 9% [12 %1 -4% [4%] -20% [-16 %1

3% [-4%] 2% [-5%] NA [-3%1 NA [-9% 1 9% [-3%1 17% [9%1 4%

*Percentage in brackets reflects change at constant exchange rates

Rapaport February 2016 35

Taka t

42 Rapaport February 20 16

COVER

Country of origin and treatments impact colored gemstone prices.

By ETTAGAlE BlAUER

n the world of gemology, tw"O key factors influence the price of rubies, sapphires and emeralds - whether

the stone is trea ted and its country of origin. While treatments such as heat or clarity enhancement playa role

in determining the market value of a stone, it is the country of origin that has the most significant impact on price.According to

Rahul Kadakia, international head of jewelry for Christie's, a very fine, unheated Burma ruby can fetch $1 million a carat, while a comparable T hai ruby might bring only $1 00,000 per carat. Given the importance of country of origin, there is growing pressure on laboratories to make this vital determination.

Ascertaining country of origin poses many challen ges. C h ristopher P. Smi th, pres iden t o f Amer ican Gemological Laboratories (AGL), says the process is "part science and part art," with "lots of experience" added in .The scientific methods are used to examine the "different properties and characteristics" while looking at the stone in it~ entirety. "Methods include microscopy, visible and infrared spectroscopy, as well as chemical composition," Smith explains. All the data has to be examined and interpreted.

Pierre H ardy, spokesm an for Giibelin Gem Lab, a Swiss gem laboratory that examines colored gemstones, likens the process to detective work, "gathering all possible clues and evidence, in order to put the puzzle together and see the big picture, that is, the or igin ." Moreover, he points out,"T he gemological properties are primarily the result of the geological envirolllilent in which the gemstone grew vvithin the earth ."As a result, Hardy notes that many gem laboratories are hiring scientists trained in geology rather than regular gemologists.

Place of origin remains the most difficult part of the Gemological Institute of America's (GIA) work explains Shane McClure, G IA's global director of colored stone services. AGL, Giibelin and GIA send field gemologists deep into the mines to see the gems where they are found, which is the best means to obtain verifiable source material to determine origin. This research in the field provides samples as a basis for the laboratories' reference data.

TREATMENTS Although whether or not a gemstone has been treated or enhanced

factors into price, the reality is that very, very few rubies, sapphires and emeralds reach the market without some kind of treatment or enhancement. To maintain the integrity of the colored gemstone business, Douglas Hucker, chief executive officer (CEO) oftheAmerican Gem TradeAssociation (AGTA),says, "Any treatment should be properly declared. Customers accept information as long as it is disclosed."

However, counter to regulations (see Treatment Disclosure, right), some stones sold in the market are treated and not disclosed as such. This can cause problems for the laboratories, wholesalers and retailers alike. For laboratories, all stones are initially suspect and the process of investigation begins.

The complex world of treatments in terms of rubies, sapphires and emeralds comes down to two words: heat or fillers. Today, the heat treatment of corundum and clarity enhancement of emeralds is routinely employed to improve the color and/or clarity of these gems. Other forms of treatment may also be applied to these gems, however they are not as c0llU110n.Additionally, certain treatments, such as heating, may inhibit the ability to perform a country of origin determination, whereas others, such as clarity enhancement, do not materially impact a lab's ability to determine a gem's provenance.

The Federal Trade Commission (FTC) specifies when treatment must be disclosed as follows:

Adding another layer of complexity is the lack of agreed-upon definitions among the laboratories on how to describe the amount of treatment or the color of a stone and the difficulties in interpreting the nomenclature appearing on colored stone reports today.What 1s"minor" as compared to " insignificant" or "moderate," for exanlple?

EMERALD ORIGINS

• If the treatment is not permanent.

• If the treatment requires special care.

• If the treatment has a significant impact on value.

The American Gem Trade Association (AGTA) offers the following guidelines:

Treatment should be disclosed at every step along the way, which means from the moment it is mined, where filling or heating may take place in the rough, to the cutte , dealer, jeweler and retailer.

For more information, contact the Jewelers Vigilance Committee, 272.997.2002.

According to Smith of AGL, most gem varieti es form around a limited range of geological variables . As a result, there are similar types of material that can occur in different geographical areas ." For emeralds, we are looking at specific inclusion features, chemical composition and spectral features as clues to origin. When one considers

Top: Emerald before (top) and after (bottom) ExCel" process. Photo courtesy Eternity Natural Emeralds.


Colombian emeralds, they stand out as originating from a unique geologic occurrence consisting of an evaporative brine from black shales in veins and breccia, which im parts properties unique to that 10cation.Whereas,emeralds from Brazil and Zambia have mostly formed in a classical schist type deposit and therefore may be very similar in properties and characteristics to one another."

Another point of distinction, says GrA's McClure,i~ that"Colombian emeralds typically have three-phase inclusions in jagged voids, calcite and pyrite crystals and an unusual kind of graining referred to as 'gota de aceite'-literally 'drop of o il.'"

EMERALD TREATMENTS Wendi Mayerson, senior staff gemologist atAGL, notes that the treatment of emeralds

is nothing new. "Pliny describes dyeing emeralds in 77 AD." Moreover, she says, "You can use almost anything to fill fissures in emerald," which can make identifying the

nature of the filler challenging. Few labs, such asAGL, identifY the

BURMA: SANCTIONS nature of the fillers used to clarity enhance emeralds in addition to quantifYing the degree of the treatment. Most labs, such as Giibelin and GIA, only quantify the extent.

It is known within the industry that rubies mined in Burma prior to 2008 are not allowed to be imported into the U.S. Why

then are sapphires not part of the sanctions? Cecilia Gardner, president. Jewelers Vigilance Committee (JVC), says, "The sanctions were enacted under President George W. Bush. It was known that the Burmese military controlled rubies. and jadeite. Sapphires were not under the same control. H

The sanctions were renewed in 2014 in spite of tentative moves toward democracy. Christopher P. Smith, president of American Gemological Laboratories (AGL), says. "Before sanctions were imposed, the ruby trade in Burma was decentralized. The government was not able to get control of it . Since sanctions. the small -scale miners were cut out of the distribution networks."

Adding oil to emeralds is considered the "traditional" treatm ent. According to Kadakia, an em erald " that only has minor oil is an accepted form of enhancement." Polymer-type resins are the tool of choice of many for filling the fissures that are common in emeralds. Unlike oil, which can dry up or leak out over time, resins are said to be more permanent, but Mayerson says that's not always the only point to consider. "Modern, polym er-type fillers;' Mayerson says, "can also be better at reducing the appearance offissures."

While there is a variety of polymer-type fillers used on emeralds, the ExCel® process is often m entioned by dealers and other laboratories as the best method. Clarity Enhancement Lab (CEL), located in New York C ity, is credited with developing the ExCel® process and remains the only location performing the treatm ent process. Although it is considered to be permanent, Eternity Natural Emeralds (ENE) President Shawn O'Sullivan says, " It is a stable filler and so will not alter in color or transparency over time. However, it can also be taken out ."

PRICING EMERALDS According to Gary Schuler, director of the jewelry department at

Sotheby's, if an emerald is untreated, other than with minor oil or traditional type filler, it's worth 20 percent to 30 percent more than a stone treated with a modern filler. If there has been significant treatm ent resulting in more fissures filled with a product such as resin, he says,"the value decreases by another 50 percent to 60 percent."


Stuart Robertson, research director for GemWorld, a Glenview, lllinois, company that offers appraisals, a colored gem and diamond price guide and other gemology-related services, puts the price difference for finer quality 5-carat to 8-carat untreated emeralds at 70 percent to 100 percent more than treated stones.

Rayaz Tabt, ofTabt Gems, USA, a dealer in fine colored gemstones in N ew York, points out that the branding of colored stones based on country of origin has added an even wider dispar ity in pr icing. He says an unenhanced Colombian emerald is priced five times as high as an unenhanced Zambian emerald - $200,000 per carat for the Colombian, $40,000 to $50,000 foc the Zambian.

CORUNOUM TREATMENTS For corundum - sapphires and rubies - heat is the enhancement of

choice fo r its ability to add or soften color or even melt away inclusions. Smith explains there are broadly speaking three categories of heating: relatively lower temperature heating, relatively higher temperature heating and more extreme heating conditions.

R elatively lower temperature heating is generally considered as being below the threshold when rutile silk - an inclusion within the stonedissolves, where primarily only the appearance of the stone is changed by removing less desirable colors or color modifiers. "Although the practice of heating coru ndum dates back more than a thousand years, since about the mid- 1970s relatively higher temperatures and contro lled hea ti ng conditions have become the most common type of heating," Smith explains."Using higher temperatures and controlling factors such as the atmospheric conditions, holding the stones at temperature, as well as ramping up and down of the temperatures allows for much more to be accomplished in addition to just modifying the color to a greater degree," Smith says.

The transparency of a stone may be improved by dissolving rutile silk, as well as healing fissures. In addition , under more extreme heati ng conditions additio nal elem ents su ch as titanium, chromium and/or beryllium can be diffused into the stone. Smith adds, "Essential characteristics and properties of rubies and sapphires are altered at the relatively higher temperatures and under more extreme heating conditions. This can im pact a lab's ability to determine origin ." O rigin determinations are still possible in heated rubies and sapphires, however Smith points out one example of why this can become more challenging. "Rutile silk is a

CITY HOUSE LOT# SHAPE 2011 11111/1 1 Hong Kong Christ ie's - 2724 Cush ion 11111/11 Hong Kong Christie's -2724 Cush ion 12/01/1 1 New York Christ ie's 77' Oval 11111 /11 Hong Kong Christie's 2813 Cush ion 2012 11127112 Hong Kong Christie's - 1898 Pear 11127112 Hong Kong Christie's - 1898 Pear 05/14/12 Geneva Ch ristie's 66 Cushion 05/16112 Geneva Ch ristie's 358 Octagonal 2013 05/15113 Geneva Ch ristie 's 263 Cushion 11/26113 Hong Kong Ch ristie 's 2075 Oval 11/13/13 Geneva Sotheby's 355 Ova l 2014 10/07/14 Hong Kong Sotheby's 1935 Step-cut 11/12114 Geneva Sotheby's 470 Cushion 11/11/14 Geneva Ch ristie 's 348 Cushion 2015 06/02115 Hong Kong Ch ristie 's 2 11 1 Octagonal 05/12115 Geneva Sotheby's 502 Cushion 05/13/15 Geneva Ch ristie 's 351 Cushion

*Sold at El izabeth Taylor Auction

ami Prive

SIZE COLOR CLARITY

23 .12 Emerald Colombia $83,612 $1 ,933,103 25 .38 Emerald Colombia $83,612 $2,122,066

8 .24 Ruby Burma $5 12,925 $4,226,500 26.41 Sapph ire Kashmir $145,347 $3,838,618

23 .18 Emerald Colombia $97,919 $2,130,674 23 .34 Emerald Co lombia $91,919 $2, 145,381 32.08 Ruby Burma $209, 154 $6,709,664 47. 15 Sapphire Burma $77,884 $3,672,235

23.28 Emerald Colombia $83,434 $1,942,341 13.21 Ruby Burma $449,596 $5,939,160

114.73 Sapphire Burma $62,082 $7,122,692

35.72 Emerald Colombia $121,777 $4,349,880 8.62 Ruby Burma $993,816 $17,575,740

392.52 Sapphire Ceylon $44,777 $4,226,500

38.51 Emerald Colombia $60,383 $2,325,356 25.59 Ruby Burma $1,183,045 $30,274,113 35.09 Sapphire Kashm ir $210,268 $7,378,310

Source: Rapaport Magazine auction results.

Rapaport February 2016 4S

Akiva Gil


very conunon inclusion in ntbies and sapphires from many origins. However, some sources may exhibit patterns of rutile that help us to determine where the stone has originated from . Since relatively higher temperature heating will dissolve the rutile, making it disappear, we

no longer have this inclusion feature to help us in our determinations."

RUBY

While most ruby undergoes heat treatment, there is a small production of stones that remain

unheated. In the past, a majority of the unhea ted rubies came from Burma, presently Myanmar. However more

recently, the Montepuez region of Northeast Mozambique has become an important source of unheated gems. Originally discovered in

2003, London-based mining company Gemfields obtained the mining rights in 2011 . Gemfields subsequently started to offer their ruby production through public auctions in June 2014.

Niveet Nagpal ofOmi Prive in Pasadena, California,says,"There is always a challenge sourcing finer-quality material. Rubies are probably the most difficult because of the way ntby is formed in nature;larger sizes are very rare." Of the new source, he says,"The Montepuez stones are some of the most beautiful in the world ." Many of these stones tend to be darker with brownish or purplish undertones, however in the best-quality stones, the color can be bright and vibrant, even rivaling Burmese gems. On the plus side, he says, "There is a small, yet consistent supply of unheated stones so sellers are able to offer the rarity of an unheated ruby without the price tag associated with fine Bunnese gems."

"There are a few classic inclusions in each of the big three colored gems but also exceptions to all ofthem;'says McClure."Bunna ntby from Mogok typically has clouds of very fine rutile needles, rounded transparent crystals of calcite and irregular swirling graining and color zoning."

Still, nothing surpasses fine Burma rubies . "Burma stones have a kind of inner glow that no other source seems to have," elaborates Nagpal."Thai and African stones typically can 't com pare. They tend to have a different chemistry, usually meaning more iron that impacts their color."

PRICING RUBIES

In the market today,Burma and Mozambique dominate the ruby landscape. In terms of pricing rubies, Nagpal goes on to say that for an unheated gem of similar quality, Burma ruby carries an enormous premium over beautiful Mozambique rubies, with the Burma ru by costing 200 percent to 300 percent mote. "Pricing for these rubies however," Nagpal continues, "is not an exact science."

The difference is not as extreme for heated stones. The difference between a price for a Burma or an African ruby from Mozambique or Madagascar is 20 percent to 30 percent for smaller sizes and average qualities . As the size and quality increase, so does the difference in price.

SAPPHIRES In the world of sapphires, there is considerably more unheated mater ial than one can

find in mby. For blue sapphires there are al<;o more sources that supply global demand: These sources consist of Burma (Myanmar), Ceylon (Sri Lanka), Kashmir (Northern India) and Madagascar.When it comes to origin determinations, this greater number of sources can also make origin determinations trickier."You would never confuse Burma and Kashmir blue sapphires;' Smith says,"however both Sri Lanka and Madagascar can produce Kashmir-like stones." Smith further explains, "On the other hand, true Burma stones may be cOMIsed with some Sri Lankan and Madagascar material as welL"

Kashmir sapphire typically has extremely fin e- grained cloud .. in parallel planes, tourmaline inclusions and elongated corroded zircon crystals, says M cClure.

SAPPHIRE PRICING With blue sapphires,Takat says, a stone from Kashmir would be worth $100,000 per

carat, while a similar sapphire from Madagascar would go for $20,000 per carat. Time has played a role in pricing, of course, as the market for the increasingly rare

stones grows. According to Kadakia , a 10-carat Kashmir sapphire that sold for a total of$10,000 in 1965 is now p,iced at $150,000 to $200,000 a cant.

GRADING SYSTEMS Unlike the world of diam ond grading where the G IA's D- ro- Z system is in use

globally, several co lor grading systems compete for buyer's and seller's attention. Explaining G IA's procedure,McClure says, " The colors listed on our reports are simple visual colors .We use Munsell color references for consistency."

GemDialogue, a color comm unication system devised by the late gemologist Howard Rubin in 1983 and still in use today, includes 21 transparent color charts showing ten saturation levels for each coloLA stone is positioned against the various charts until a match is found. The system is presented in a loose-leaf binder and is meant to be used in the field when the gem buyer is without access to other tools.

In the past two years, Gem World introduced a very similar system , based on M unsell chips, but also providing pages with overlay charts . Each of the 1,400 colors is given a specific name. The system is intended for use with the firm 's Gem Guide pricing scale.

The system in use atAGL takes a more holistic approach to grading co lored stones. It evaluates the color based on a l - to-lO scale, while al<;o looking at other important factors, such as the clarity and cutting. AGL's system is not as easy to

grasp at a glance as there is a lot of information to absorb, but it is intended to give the m ost precise, and repeatable, measurem ent of a stone's quality in a way that is comparable to the G IA grading system for diamonds .

Kashmir Sapphire. Photo courtesy Sotheby's.


The traditional description of the finest rubies as "pigeon's blood" color is coming back into use. GemWorld's Robertson says one lab mainly servicing the Chinese market is grading up to 90 percent of the rubies it sees as being "pigeon's blood" red. Schuler notes, "We are going back centuries when the ultimate customer was a king, a conquerorT hey lived and breathed battles and hunting."

PAPER TRAIL

RUBIES, SAPPHIRES, EMERALDS 2011-Nov. 2015 Given the increased value of colored stones, today's buyers want more than a single report. As a result, it is not uncommon for important colored stones to have two or three reports for any given stone.With the demand from the market and consumers, several labs have also developed special letters and even custom made small books to better highlight the qualities of a particular gem, as well as the region from which it originated.

2011

2012

2013

2014

201S.Nov.2015

2011

2012

2013

2014

201S.Nov.2015

Source: u.s. Census Bureau

QUANTITY BY CARATS Rubies Cut But Nat Sapphires Cut But Not Emeralds Cut But Not

Set For Jewelry Set For Jewelry Set For Jewelry

3.922.651 6.981.303 2.755,435

4.259,789 5,944,317 2,894,750

3,757,687 6,862,776 3,039,527

3,616,487 6,079,823 3.320,118

3,142,900 6,142,333 4,738,196

CUSTOMS VALUE

W ith demand for the finest rubies, sapphires and emeralds on the rise, the pressure will only grow on labs that certify these gems to maintain their standards and to continually pursue more and better ways to ensure their results in terms of origin determinations and the detection of treatments. It is an ongoing struggle bu t one that must be waged with vigor.

Rubies Cut But Not

Set For Jewelry

44,185,657

111,535,046

148,162,093

132,358,567

137,651,515

Sapphires Cut But Not Emeralds Cut But Not

Set For Jewelry Set For Jewelry

280,730,523 348,192,117

268,391,400 410,381 ,298

345,595,211 433,569,922

415,740,636 647,422,754

401 ,449,056 530,239,342 CONCLUSION As the most prized emeralds, rubies

and sapphires become increasingly rare and a more sophisticated global customer emerges, country of origin and treatments, or lack thereof, are increasingly important elements in a gemstone's pedigree, all of which determines j ust how much the stone is worth. Gemological laboratories play an important role in ascertaining that gemstones and the factors influ encing their value are properly identified. This is essential for safeguarding consumer trust.

"T he laboratories take very seriously the trust that the trade and consumers have placed in us to accurately identify the stones they submit to properly disclose treatments and establish their provenance," Smith concludes "Although gemology is not an exact science, we are constantly investigating ways to refine our due diligence, to improve upon our standards and increase confidence in our results." .


Charm Jewelry Bolsters Sales BY lARA EWEN

Mter holiday sales numbers were tallied, retailers allowed that while

the 2015 holiday wasn't a complete win , it ended on an overwhelmingly positive nmc. Sales and traffic were modestly up in most areas, helped by the success of lower-priced fashion items such as the stretchable Paris bracelet ofSwavorski® elements and moderate designer lines such asAJexandAni.Colorand bridal sold well. Overall, retailers were confident that 2016 would bring improving sales, higher traffic and a continued undercurrent of cautious optimism for the future.

WRAPPING UP THE YEAR Several weeks after the 2015 holiday

season WTapp<.--xl up,stores were able to make a firm assessment ofbmh the holidays and the overall year, and for the most part the numbers were good. "ChristnllS 2015 was better than okay," said Hank Davis, owner of D avis Jewelers in Louisville, Kentucky. "We had a double-digit increase. We were trending that way for the year, but Christmas is its own entity. I would say designer brand~ are important, but it 's not just the brand, it's the presentarionYou want the steak and the sizzle. It's about experience, and not just how you treat the clients. It's about the overall experience."

Sales were also robust in the mountain states. "20 15 ended well," said Keith Hurdle, owner of Hurdle's Jewelry in Boulder, Colorado. "We had a record year, our b<.--st year ever. It was 10 percent above 2014, and 2014 was our previous best year. It's probably becallSe of our push on social media, and because Boulder seems immune to economic woes. There's a lot of tech here. That said, we didn't see high individual-sale dollar figures . During the holidays, our average sale was double what it used to be, at $2,000 and $4,000, but we didn't see a lot of five-figure sales."

Stores credit increased traffic and the popularity of branded product for th e improved bottom line. "2015 was great," said Charla Hall , manager of


Baker & Baker Jewelers in Marietta, Ohio. "We had more tram;.action~ than in the past due to brands like Alex and Ani, and our final numbers were up, so we are happy with how 2015 ended."

CONCERNS AND QUESTIONS Unfortunately, not all stores saw record

nWllbers."1 will say in tenns of the year, thing; were quiet;'said Ryan Krasner, vice president and marketing director at Harold Steven's Jewelers in San D iego, California. "Our December wasn't as strong as the previous year, but \ve had a better November. Some things came in last minute, but some of our existing customers didn't come back, or they spent less."

Additionally, however successful 2015 was, some retailers had concerns about the coming year. "20 15 was robust," said Joe Strong, co-ownerofWaterfall Jewelers, with two locations in the Detroit area. "One location had its best year, both saleswise and in terms of traffic. The other location was about the same year on year. Bm I think 2016 is kind of scary. For my store, I expect an increase again, bm with the political climate and possibility of terrorism, we could be one terrori~t attack away from the stock market going down. But as long as nothing dramatic happens, then the year should be okay But it's a littie scary,just like 200 I You never know."

COLOR AND FASHION One of rhe big stories moving forward

was the success of colored gemstone jewelry, although semiprecious generally sold better than precious. "We don 't sell rubies and emeralds very well," said Davi~. "But sapphires and semiprecious sell well."

Some stores are glad to find new focus on color. " Overall, 2015 was a good year for colored stones," said Krasner. "We saw a slight increase for nice colors in the right design.We are a heavily bridal store,so I can take a little hit on the bridal, but we need to increase in fashion."

Still, some stores were having problenL~

selling more expensive colored pieces . "Color is doing very well, and we're doing more outside the three majors," said Hurdle. "Tourmaline i~ doing well for us in a "Variety of colors. I'm a fan of color, but sales are about price more than anything else. Ruby, emerald and sapphire have gone up so fast, it's hard for people to look at a small stone and spend money on it. I hear a lot of the finer material is going to China and that drove prices up. But that's just hearsay."

Other stores are finding real success with affordable fashion lines. So much so, in fact, that it 's been hard to meet demand. "We have been trying to restock Alex and Ani, but they are out of so much t1lat it has been a bit of a battie," said Hall. "But we aren't selling beads much, and more people are coming in for self-purchases over gifts."

Slrong agre<.-..:l.. "We've carri<.-..:l.A1ex andAni for a year and a half,"he said."ln D ecember 2015, we sold about 4,000 Alex and Ani bracelets, as well as Paris bracelets, and that 's nice because it helps with the slumping sales for Pandora." .

• Round brill iants sell best, with ovals and cushions tied for second place.

• 1.25-carat stones are the current top sellers.

• 511 is the most popularclarity.

• HII is the most popular color range.

• 18·karat white is the top·selling metal, mainly due to its use in popular designer lines. Rose and yellow gold also continue to trend.

• The average price for an engagement ring, including stone and setting, is $7,780.

Market Conditions Continue the Same BY SHUAN SI/y\

The subdued growth seen during the holiday months of November

and December 2015 continues imo January 20 16, though wholesalers have to

contend with challenging prices. " I was expecting morc, but r can't complain," said Betty Livieim, president of American Gem Corp., a d iamond importer and wholesaler based in New York. She noted that clients have been looking for beuer-quality goods - around VS clarity in colors F through H - yet want prices that make it challenging for those in the midstream. "Even ifT offer a very decent pr ice for a stone, they still want it cheaper!" expressed Livieim, describing buyers having an eye out for rhe best bargains as representing the prevalent mood in the market.

Roy Wachsler, a sales executive from Dharm International,a New York subsidiary of Dharmanandan Diamonds Pvt. Ltd., said that business has been slower than usual but he believes that they came out okay. "Customers are getting smaller sizes and offering lower prices," he commented. "Small" goods and "big" goods - from .4 carats to 1 carat and 5 carat~ to 6 carats, respectively - fared well in recent montlL~, with anything in between struggling a little. Diamantaires reported having no inventory trouble for most goods that they need despite a reduction in manufacturing, and they did not foresee any shortages any nme soon.

IIIDIA DIAMOND WEEK IN NEWYORK The January In dia Diamond Week in

New York was the fOlUth iteration of its kind held at the D iamond Dealers Club (DDC) in New York City. M any exhibitors shared that the first two days of the show were great, but traffic dropped off sharply by the third day. The show attracted about 1,000 buyers and 70 exhibitors - 15 of whom were from India, brought in by the Gem & Jewellery E},.-port Promotion Council (GJEPC) . Many were of the opinion that the show in August 2015 was better, which in turn was eclipsed


by the January 2015 show. "Everybody wants to sell but no one wants to buy," said Livieim, who was exhibiting at India Diamond Week for the first time. Some felt that the lackluster traffic might have been due to the show being too close to the gem and jewelry shows in Tucson, Arizona, and Miami, Flo ri da, both in late January, and the upcoming shows in Hong Kong in March.

Ching Parikh, director of Janam Corporation Pvt. Ltd., a manufacturer based in Mumbai, said that it was "definitely worth it" to return for their second In dia Diamond Week. "We brought many Gemological Institute of America (GIA)-certified goods, and the last time we didn 'r see much response for some fancies such as princesses,so we were able to prepare rills time around," Parikh said. David Lasher, managing director at DDC, commented that some returning exhibitors who brought tile right kind of goods did exceptionally well at this show.

NEW CONTACTS For some other exhibitors, the

opportunities to make new contacts and reestablish existing relationships were the main draw of the event. " If I were only to look from a sales perspective, then rhis wouldn't be a good show," claimed Nilesh Chhabr ia, chief operating officer of sales and marketing at Finestar Jewellery & Diamond~ Pvt. Ltd., a Mumbai manufacturer. He explained that this show allows customers who only know tllem through trading platform.~ to see them "face to face, which will make it easier to do business in the lilmre."

The price challenge that buyers presented at the show surprised some Indian diamantaires. "The buyers here seem to have better bargaining power, as many of them have cash in hand ," commented Akshay Dugar, a partner of Mumbai manufacturer Choice Diamond. "In Mumbai, I can usually get prices dose to my asking prices. I would probably make more money sitting in Mwnbai than

here in New York," he said. However, he reflected that tlus had been a good show for him due to the business opportunities presented and added that he would come back for the next show.

T he Ind ian exhibitors felt that the U.S. diamond market, compared to other global markets, is stable. "The U.S. market is never bad," said Chhabria. "After all, this is where the bridal jewelry tradition is firmly established.'While diamond bridal jewelry is slowly fmding a foothold in India, it is still easier to sell bridal-oriented goods such as rounds for rings in the U.S., he added.

Compared to tile Indian wholesalers, the New York diamantaires were less certain of a rosy outlook for 2016. They felt that there have been no dear signs from the economy and the industry promising them good sales ahead. "If I' m going to base my assumptions on this show," said Wachsler, who exhibited at the show;"tllen probably not." +

• Stones up to 1 (a rat, and 5 (aratsto 6 carats sold well.

• Demand was strongest for VS2-SI2, F through J color.

• Round sales steady, with ovals and princesses most popular for fancy shapes.

• Wholesalers noted that buyers were seeking steep discounts.

• India Diamond Week had buyers looking for stones between 1 (arat and 3 carats.

• Some interest in emerald and pear shapes at the show, with ovals being the hottest.

• Buyers were reque5ting GIA goods, in the VS and SI ranges in (olors G through K.

Tough Start to New Year BY MARY KAVANAGH

Business continued to be tough for Hong Kong's diamond industry in

the early weeh of the new year following a difficult 20 15. Retail sales fell 7.8 percent in value and 6 percent in volume in November, putring the city on track for its

worst performance since 2003 when SARS hit.At thl[ time, retail sales for the Kill year decreased 2.3 percent in value compared to a drop of 3.1 percent in value for the 11 momhs up to the end of November 2015. Thomson Cheng, chairman of the Hong Kong Retail ManagemcntA'\.mciarion (HKRMA), predincd the full-year figure for 2015 to have fallen by 3 percent at least and many of the association's members have predicted a single-digit decline for 2016.Tourist numbers to Hong Kong over the Ciuistmas and New Year period were down 2.53 p ercent compared to the previous year, with the biggest drop in the number of visitors from Mainland China, which was down 5.45 percent.

NOT IN THE MOOD "2015 was very challenging in the entire

luxury world and we aho felt a slowdown," said Alon Garry, chief executive officer (CEO) and founder of luxury jewelry brand , Van Eyck, and diamond trading company, Windiam Asia. Van Eyck is a high-end fine jewelry brand that sells pieces in the $20,000 to $200,000 price range and targets high-net-worth individuals who already own diamond jewelry and are looking for something unique. "Our customers have money, but they are nm in the mood to buy," he said. On the wholesale side, last year was the worst year since the 2008 crisis, according to

Garty. " It's different from the 2008 crisis," he said. "Prices crashed in 2008, but came back up after ten months and we had a lot of bargains and opportunities, but the current crisis has been ongoing since 2014 - 18 months - that's a long time," he added. Garty saw a slight pick-up in business toward the end oflast year, mostJy for large stones - 5 carats and above for fancy colors on an order-basis only and 10 carats and above for white diamonds.

Simon Zion of Dehres Limited also


reported that business in recent months has been challenging. " It was a difficult season and we are feeling it tremendously the past five to six months," he said noting that the anticorruption campaign in China had hit the HongKong,Macau and Taiwan markets hard.

COLORED GEMSTONES The market for colored gemstones has

increased over the past year. According to Zion, the high level of tramparency in the diamond industry has made it more difficult for wholesalers, brokers and retailers to make the same profit margins as before. " I think this is a major factor pushing people into the colored stone business. There is a much wider range of goods, and the goods are generally much cheaper in total value so customers who are a bit more cautious in how they spend their money, yet still want to buy an impressive necklace with big stones, can do that," he said.

The increased demand for rubies, emeralds and sapphires has also been influenced by the recent success of tJlese stones at the Sotheby's and Christie's jewelry auctions. Over the past year these stones have featured heavily in top ten li~t.~

and have repeatedly smashed world record prices. " T he most popular gemstones are rubies," Zion said. These arc extremely popular and it seems that every top-quality unheated Burmese ruby that comes to auction smashes records. "We pay a lot of attention to colored stones," Zion added. "Even in a tough market they are popular." Customers tend to go for larger gemstones, 2 carats to 3 carats for earrings and 5 carats for main stones.

INTERNATIONAL MARCH SHOW Exhibitor feedback from 2015's three

main international jewelry shows in the city

was not overly positive. The Hong Kong International Jewellery Show w ill take place from March 1 to 7, at two venues in the city. Dehres Limited will be exhibiting and, although hoping for an improvement over 2015 show, Zion is realistic in his expectations. "The shows last year were not as good as in previous years and we

anticipate it to be similar in 2016," he said. "The March show is the most important show in A~ia, along with the September show, and we deftnitelywon't be giving it up, although we have had a few difficult years."

Garry, on the other hand, has made a strategic decision for Windiam not to

exhibit at any of Hong Kong's international jewelry shows this year - for the first time in 15 years. "When I started to do the exhibitions in Hong Kong, there were 18 diamond exhibitors. Now in March , there are more than 800," he said, noting that there was not necessarily the equivalent increase in customers to match that of exhibitors. "The shows used to account for 30 percent of our annual mrnover in sales, but today it is 10 percent," he pointed out, adding that the commimlent of time and resources necessary to exhibit doesn't make sense for them any more.

The future is uncertain for industry players and many find it difficult to anticipate which direction to move in next. Only time will tell if the market has already bmtomed out and if there is hope of a recovery this calendar year. Everyone is hoping for better days. +

• Customers are generally buying less and buying smaller pieces.

• Well-designed fashion jewelry at lower price points w ith smaller stones continues to do well .

• There is a shortage of 2-carat to 3-carat fancy shapes and goods in VS and SI quality as wholesalers sell existing stock.

• A slight pick-up in the market was seen for goods on order overthe Christmas period along with a slight increase of 3 percent to 4 percent in the price for diamonds weighing less than a carat.

Hong Kong Show Will Be Market Barometer BY AVI KRAWITZ

After a tough year in 2015 and some improvement in recem months, Israeli

diamantaires expect that the Hong Kong International Jewellery Show in March will provide a hencr indication of how trading will develop in 2016. "The March Hong Kong show will be an interesting time to measure where the market is going, what prices dealers are paying and what inventory requirements we will have," said MishaelVardi, owner ofVMK Diamonds, a supplier of fancy color diamonds.

The Israel Diamond Institute (IDI) pavilion is usually among rhe largest at the event as the Israeli industry has used the Hong Kong shows as an effective platform to raise its exposure in the A~ia Pacific region.lsaacBerman,presidem, I. Berman Diamonds, explained that sLlch a gathering should provide some perspective to Israeli diamantaires who are not sure in which direction the market is heading - especially in light of the declines experienced in 2015 and overall caution about the Chinese economy. He added that the event is important given the large number of dealers and buyers that attend the show and it is also the first real opportunity for jewelers to replenish inventory that was sold during the Chinese New Year Spring Festival.

U.S. STABLE, CHINESE UNCERTAINTY D<.---alers who spoke with R.11fxrport Mq~zille

reponed that U.S. demand was stable in January and they were satisfied with the U.S. market after the holiday season. However, their attention shifted to the Asia Pacific region, which was more volatile ahead of the Spring Festival.

Carmel Lustig, marketing and sales direc[Or at Lustig Brothers, which deals mainly in triple EX certified diamonds, noted that there was a tremendous improvement in the Chinese market about three months ago. Jewelers in China and Hong Kong placed most of their diamond orders in November and December so they could have the jewelry set in time for the festival, he explained. Chinese demand therefore quieted as the season approached


and activity also slowed in January as stock markets slumped.

"People are heavily invested in stocks and real estate and therefore it is natural that the diamond market should slow as stocks crashed," Lustig said. "But I think the Chinese New Year will be okay and if the stock market stabiliz<.-'S, the Hong Kong show will also be positive."

LOCAL SHOW, LOWER VOLUME Similarly, Berman expects the International

DiamondWeek in Israel, taking place from February 14 [0 18, w ill lift sentiment in the local trade. Israel Diamond Exchange (IDE) PresidentYoram Dvash stressed the event giv<.-'S local suppliers access to buyers they would otherwise not meet, while the buyers gain access to a lot of new, first-hand goods and attractive prices.

Supply remains a thorny issue for the local trade as shortages have supported polished prices but also made it difficult for dealers to fill some orders. Vardi expects that there will be shortages of select goods at the Hong Kong show since manufactllrers have not yet raised polished production. Polished prices firmed toward the end of 2015 due to shortages rather than a spike in demand andVardi expects that trend will continue at the show.

For that reason, Israeli diamantaires have mixed feelings abollt current market conditions since trading is still well below levels recorded at this time in previous years. Data published by Israel's Economy Ministry showed that the country 's polished exports fell 20 percent year on year to $4.99 billion in 2015, with the volume of exports down 12 percent [0

2.179 million carats. Polished exports to the U.S. dropped 16 percent to $2 billion, while exports to Hong Kong plunged 28 percent to .$1.35 billion.

Shmuel Mordechai, Israel's diamond controller, stressed that the decline was in tine with the slowdown witnessed in other centers, which stemmed from a slowdown in demand in both the U.S. and China.

OPTIMISM FOR 2016 Most dealers lowered their stock

position in 2015 and are now only buying goods they know they can sell and make a profit, according to Vardi. He added that maintaining healthy liquidity is key to operating in such a market. Suppliers are hesitant to give credit out of fear they won't receive payment for their goods, he explained. Credit issues and the ability to source the right goods are among the key challenges facing the market in 2016 but Vardi is confident they would be met in the year ahead.

Lustig stressed that as long as rough supply and manufacturing levels remain conservative and demand is not affected by external factors such as another stock market shock, 2016 will be better than last year for the diamond industry. "I think that 2016 will be a better year and you feel that we 've passed the bottom," Lustig said. "All the craziness of 2015 has calmed down and I think we will see at the Hong Kong show that the market has stabilized." +

• Dealers satisfied with U.S. holiday season, uncertain about Chinese New Year.

• Steady demand for '·carat, D-H, S12, triple EX diamonds.

• Improving demand and shortages for .30-<arat to .50·carat, G·J, VS·SI diamonds.

• Good demand for ovals and pears with shortage of top·make fancy shapes.

• Fancy color diamonds stable, with very good demand for good·quality pink and blue diamonds.

• Rough demand rising due to polished shortages.

Rough Imports Lowest in Four Decades BY ZAINAB MORBIWALA

Diamonds may he a girl's best friend but given the demand dynamics, it

seems girL~ - along with everyone - '" losing their interest in diamonds and befriending something else. The market conditions have not as yet improved and the industry overall is facinga tough time ahead.

INDUSTRY NEWS In an exclusive interview with

Rapaport Magazine, Dinesh Navadia, president of the Surat Diamond A"sociarion (SDA) explained, "The markec for diamonds in India post-Diwali has seen some positive growth, hut to bring in stability between demand and supply for rough, it is important that diamond manufaClUrcrs restrain from investing in morc rough without clearing off the inventory they have." Navadia shared that the development of the small and medium enterprise (SME) sector under the association would address the issues they face in relation to impon, [mance and other related things that could help them boost their business. Navadia added, "The conunittee has already agreed to have an SME senor under the Gem and Jewellery Export Promotion Council (GJEPC).We should see it being operational this year."

Mehul Chok~,chairman, Gitat~ali Group, speaking exclusively with Rnpaport Magaziue, pointed out, "The gems and jewelry industry in India is facing a shonage of rough, keeping in mind the speculative demand." He added, "We have to look at the demand for polished stock - i, hasn't as yet seen much improvement. It is important that we see profitability this year, as we have witnessed negative growth for the past two yean.We need equilibrium between rough and polished. I believe 2016 should be a better year."

Highlighting the negative phase that the gems and jewelry industry is currently experiencing, Sabyasachi Ray, executive direcror, GJEPC, told Rapaport Magaziue exclusively,"It is a matter of concern to look at tile figures of rough imports. Ncverin the


past four decades have we witnessed such a drastic drop. If we take into consideration the period between April 2015 and September 2015, the import of rough has gone down by 26 percent in value and 15 percent in quantity. This is not a good sign. The demand for diamonds is facing a global slowdown and this is one of the issues that is concerning us."

SEEKING GOVERNMENT ACTION In regard to the drop in imports of rough,

a delegation from GJEPC met with the Finance Minister of India Arun Jaitley to discuss a positive way forward.According to a press statement by the council, the delegation requested the introduction of a SpecialTumoverTax regime forthe diamond industry, with.75 percent tax on sales turnover based on computing net income as 2.5 percent of turnover, up to 6 percent of income This would be along the lines of the tax regimes prevalent in other diamond trading nations like Belgium and Israel. Such an approach would be tax neutral and encourage companies in Belgium and Dubai to shift capital in India, in addition to boosting e},.l'0n.~.

Another important point is the recently opened Special Notified Zone (SNZ) at the Blurat Diamond Bourse (BDB). Praveenshankar Pandya, GJEPC chairman, has urged the government to permit the sale of rough diamonds at the SNZ by implementing a .25 percent tax on sales turnover by foreign mining companies. According to him, this would generate a new era of tax collection by shifting such sales from Belgium, Israel and Dubai.At present, only the viewing of diamonds is allowed at SNZ but not the sale.

Also discussed by Pandya at his meeting with the finance minister was the inclusion of the gems and jewelry segment under the interest subvention scheme and merchandise exports from India scheme (MEIS). According to Pandya, if implemented, this would immensely help the Indian gems and

jewelry industry. Pandya also pointed out that the gold jewelry sector had huge potential and therefore jewelers should be included under the government's gold monetization scheme. He noted that the current 2 percent difference between import duty on gold bars was too high and suggested it should be brought down to .25 percent.

In speaking with Rapaport Magaziue, Ray further suggested that the 2.5 percent import duty on colored gemstones too should be waived as this would help strengthen the colored gemstone and studdedjewclry industry in India.

MARKET DYNAMICS Choksi emphasized that keeping 1Il

mind the current political situation, the implementation of gross service tax cannot be expected to happen in 2016 and the standardization of certain taxes between different states in India would not be implemented. Speaking of the current movement of goods, Chok~i shared, "We see a selective buying in smalls; particularly fine-make goods are moving. We are aho seeing positive movement in very small sizes (-2) and +11 is moving in all ranges.There is a shortage of dossier." +

• Positive sentiments cont inue in the market.

• Decent activity seen in VS lower category.

• Good demand observed in .30 carats and .40 carats.

• Polished prices remains firm due to shortages in supply as production is below capacity.

Jewelry Sales Shrink BY SVETlANA SHELEST

A month into the new year, Russian jewelers are assessing the results of

the year 2015 and the recent holiday season sales, as they firm up their expectations and consider plans for 2016. Given that the country's economy at large experienced quite a few downturns in 2015, the Russian diamond jewelry market has shrunk for the year by two third~ in dollar terms, which corresponds to a decrease of 40 percent if expressed in rubles,according to Bain & Company partner Olya Linde in her interview with Russ ia 's leading business daily Vcdomosti at the end of2015. The company's analysts project that 2016 performance will remain around the same level as 2015 and forecast a modest growth of about 4 percent in 2017, if all gol.-'S well.

According to the jewelers themselves, while the dramatic 40 percent fall in diamond jewelry sales was experienced by many, it should rather be considered as an average that does not apply consistently to all market players. Larger companies, including the Moscow-based ADAMAS and EstetJewelry House,rLl'orted that their 2015 diamond jewelry sales stayed at the level of2014. However, Fyodor Poludenny, brand managerofGEVORKYANJcwelry Group, which includes Estet Jewelry House, told R.tpaport J\1agazitlc, the demand for diamond jewelry with .50-carat stones and higher declined by about 20 percent in 2015, especially in the second half of the year.

ValeriaArusramova,commercial director of Valery Gold Jewelry Home,said the fmn saw a 20 percent decrease in the demand for d iamond melee jewelry in 2015 . She also shared that "mid-tier shopping ranging from 50,000 to 120,000 rubles approximately $640 to $1,500 - is now completely gone from the sales. T he bulk of cmtomers are shopping for something cheaper, while another group of buyers is looking for the more expensive items. We have received about 20 percent more requl.-'Sts for diamonds 1 carat and up than the previous year," she explained . Dmitry Baranov, operations director ofADAMAS, confirmed that "cer tain customers have decided to shop specifically for diamonds


and are not tempted by o th er, more affordable stones."

CREAnNG COMPElI1IVE ADVANTAGE Among the shoppers seeking a

less expensive purchase, the demand for silver jewelry and gold jewelry featuring semiprecious stones has grown considerably. "The main attraction factor for today's customers is a modest price tag balanced with original design," explained Poludenny. "We saw a surge of demand for gold jewelry with tourmalines and amethysts in 20 15.AIso,gold jewelry items featuring a mix of different semiprecious stones - such as peridot, topaz, garnet, sometimes ,vith small sapphires or emeralds added into the mix - were quite popular last year," he said. "In the more expensive category of jewelry with colored precious stones, we have seen a growing interest in rubies, which are relatively rare on the Russian market, and a steadily high interest in sapphires and emeralds," he added.

Stanislav Hofinan , commercial director of St. Pe tersburg-based Sadko Jewelry House,agreed that in tlle difficult economy, sales require a strong competitive advantage. "Our diamond collection Twist is still sellingwell,"he said,"but under the current market conditions, I would say this success is driven by the unique know-how we employ rather than the customer's interest in diamonds." Sadko boasts a "dancing diamond" proprietary technology, which has been in production for three years now. It is one of the first inventions in the Russian market exploiting the idea of showcasing the diamonds in movement. The solution is both simple and effective: The stone is suspended in the center of a jewelry piece and balanced carefully so that it responds to the wearer's movement with continuous Butter.

NO CHRISTMAS MIRACLE The majority of jewelers appear to

agree that Christmas and N ew Year sales have concluded with about a 20 percent year-on-year decrease. T he higher sales results a year ago are largely explained by an Wlprecedented customer shopping spree

that took place in December 2014 and early 2015 fueled by a sudden devaluation of ruble against the U.S. dollar. Summing up the 2015 season , Alexander Kurgansky, founder and C EO of the Brilliant24.ru online diamond store launched in 2015, said: "Unfortunately, this year, there could be no 'Chrisnnas miracle.' D ecember 2015 was no different than any other month of the year in that itwas very hard and required triple effort to produce fCSults." Kurgansky went on to explain that in 2015, customer preferences were D to G,VVSI toVVS2 stones ranging from .25 carats to .50 carats. "Russian diamond shoppers prefer white and clear stones even if that means having to compromise on the weight," he said.The most popular cuts were round, princess and cushion. In Kurgansky's opinion, these preferences are not likely to change in 2016, although it is possible the demand for the cushion cut might grow, but by no more than 10 percent. +

• Russian Ministry of Finance reported an increase in production of silver but a decrease in production of gold in 20 15 in Russia. From January to October 20 15, the country produced 918.89 tons of silver, which topped the output results for the same period in 2014 by 14.6 percent.

• Russia's overall production of gold in the first ten months of 2015 has decreased by .88 percent year..on·year and totaled 246.1 tons. Within it, production of mined gold went down by 1.1 percent and amounted t o 196.87 tons, while the recycled 90ld production increased by 1.8 percent, reaching 32.93 tons.

• Russia also reduced production of bar 90ld by 3.8 percent year·on·year in the first 11 months of 20 15, according to the Russian Assay Chamber report.

Movement Slow and Cautious BY MARC GOLDSTEIN

A~ could he expected, the diamond industry is extremely vulnerable to

the global economic environment. And had news is coming from most of the countries that have been supporting the global diamond trade over the past couple ofyears:mainly, the BRIC countries - Brazil, R ussia, India and China. The good news, however, if there is any, is that the issue is global and concerns all sectors of economic activity.

"During the last quarter of2015, we nmiced a totally unexpected pick up in Italy. In particular, there's a resurgence of activity among the northern Italian jewelry manufacturer.;, which is a good sign," ~id Julien D rybooms of Dry booms & Zonen. "On the other hand, the news from China, \vhcre we were last week, confirmed that the market is quieter, most probably because a lot of money was lost in the stock exchange. Con~equently, the Hong Kong show isn't expected to do anything else but assess the weakening trend. As far as tbe European diamond business is concerned, Vicenzaoro and the Antwerp Diamond Trade Fair (ADT F) are slowly taking over from Basel, which has now defmitely become a watch industry trade show. Even if news from Vicenzaoro seems to be okay, we arc still waiting to see wbat the neJ.."t ADTF will be in order to have a more accurate view of the old continent's health," Dryboom.~ concluded.

MOVING FORWARD Nirav Shah of Beauty Gems BVBA

elaborated: "We definitely noticed that retailers bave started restocking. However, they're doing it very carefully, wbich translares into approximately 30 percent less orders placed compared to the same period in 2015. It's the sevemh time we're participating in the ADTF. For us, if this show keeps being well managed, it's abom to become a major barometer of the health of the European market fo r the year co come. Hong Kong isn't expected to be great, but it seems that we're going to be able to rely on the U.S. co give us some stability. Indeed, American orders keep coming in at a steady pace."

According to D oshi Mitesh Ramesh of


Prime International BVBA,"T he market is going to be slow, but there is definitely business to do for those who do it strategically: buy at sensible prices, manage efficiently and sell at the right prices. By the way, it's interesting CO emphasize that while only recently 40 percent of the diamantaires were working according CO a viable business model and the otber 60 percent were running on overhang, today everybody is cautious and is sharply monitoring inventory levels.The demand for inventory replenislunent is definitely there, and an apparently contradictory feature can be seen: Even though orders arc down between 30 percent to 40 percent compared to 2015, the buyers who come are willing co pay the price to get the goods. However, let's not lose sight that consumer demand isn 't that great and consequently, retailers aren't going to jump to buy."

ROUGH ISSUES Howeve r, regarding the rougb, a

worrisome pattern appears to be coming to light. A~ everybody knows, for the past few months, the major suppliers have been reducing the quantity of rough that is being forced into the pipeline. Prices went down as well, which is what the market absolmely needed to restore profit. However, a diamantaire who wished co remain anonymous said that sightholders are now pushing up rhe premiums on the secondary market. This, in turn, could likely change the endeavor, initiated by the producers, to help the market into a simple transfer of profit from the Diamond Trading Company (DTC) to its sightholders.

COLORED DIAMOND MARKET On the other end of the pipeline IS

the natural colored diamond market, which appears to have remained virmally untouched by the crisis, according to Na tacha Langerman of Langerman Diamonds. "The most expensive stones, those that sell for record prices in auction houses, are pulling with them all diamonds in the same color range. Today, red diamond~ of one carat wouldn't sell for

less than $2.5 million. Blue diamonds have become the greatest record breakers and are now unaffordable. Argyle Pink also count among the skyrocketing p r ices," she elaborated.

David Shara of Optimum Diamonds confirmed, " In a world where oil prices are going down and where stock exchanges are more volatile than ever, the rarest fancy color diamond prices keep increasing at a pace of sometimes 20 percent CO 30 percent a yearVivid blue, vivid green or fancy red never went down over the past 30 years . T he secret behind tillS steady increase, which is comparable CO that of paintings by the Great Masters, is that there are only a couple of stones in each color category around the world for 50 buyers with standing orders. It 's absolutely a sellers' market."

Yellow diamonds in general, however, are reported to be less valuable, since they are essentially less rare than others. Globally, th<.-J' follow the trend of the white diamonds, which is also why they have been losing value recently. +

Polished:

• Everything is selling, especially for cash. More than ever, cash means a discount.

• Cash and l iquidity issues are being seen across the wor ld.

• In general, small goods below l O-pointers are a little less easy to move.

• A shortage of over 10 carats is being fe lt across the pipeline.

• Russia is expected to weaken as a market for colored diamonds, mainly due to the depreciation of the ruble aga inst the U.S. dollar. Saudi Arabia will also suffer shou ld t he oi l market remain depressed.

ITIS HAPPENING ON RAPNET.

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www.rapnet .com RAPNET. A Rapaport Group Company THE DI A M O ND MARKET

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THE DIAMOND MARKET

Guide to the RapNet Asking Price List

What is RapNet?

RapNet is the Rapaport Diamond Trading Network available exclusively to members of the diamond and jewelry trade. With listings of over 1 million diamonds valued at more than $6.75 billion and over 14,000 paid members in 84 countries, RapNet is the largest and most important diamond trading network in the world. Buyers and sellers deal directly w ith each other without any commission or trading fees. RapNet membership includes an online subscript ion to the Rapaport Price list and starts at $660 per year.

What is the RapNet Asking Price List?

The RapNet Asking Price list provides a snapshot of best and average asking prices for specific diamonds offered for sale on the RapNet Trading Network. The prices are presented in US $ per carat and percentages below or above the standard Rapaport Price list. The RapNet Price list is based on GIA graded Excellent and Very Good Cut diamonds. Additional online price and trading information is available 2417, real-time, for a wide range of diamond qualities.

How is the RapNet Asking Price List Different than the Rapaport Price List?

The Rapaport Price List, published for over 30 years, presents Martin Rapaport's opinion of High Cash Asking Prices that are used by the global diamond trade as a starting point for negotiations and a basis for estimating the value for a broad range of diamond sizes and qualities. The RapNet Asking Price list presents actual asking prices by sellers for specific diamonds. Rap Net Asking Prices are not based on opinion and may fluctuate on a minute by minute basis. Rap Net Prices are available to members online in real time via Rapaport TradeScreens~ A primary benefit of the Rap Net Asking Price list is that it discloses detailed information about discounts and premiums to the standard Rapaport Price list.

How to Read the RapNet Asking Price List?

RapNet Best/Average Asking Prices

1_00-1_49

14.575/20.839 -47/ -24%

US $14,575 is the Best Rap Net asking price available for a Round, D, IF 1.00 - 1.49ct diamond. -47 % is the Best RapNet asking price available expressed in terms of d iscount to the Rapaport Price list.

US $20,839 is the RapNet average asking price for the diamond. -24 % is the RapNet average price expressed in terms of discount to the Rapaport Price List.

For more information or to join RapNet go to www.rapnet.com. email [email protected] or call +1 -702-893-9400 in the USA.

ECONOMICbulletin u.s. Imports Slide

us. polished diamond imports fell1S percent year on year to $1 .62 billion in November 2015, representing the steepest drop recorded in the year. Polished diam ond imports by weight declined .,.-14 percent to 735,561 carat~ . Polished diamond exports dipped 16 percent by value to .......- 0:?JY $1 .37 billion and 15 percent by weight to 1 million carats . • Rough diamond imports surged 39 percent by value to $32 million and

126 percent by weight to 29,042 carats. ! • From January to November 2015, polished diamond imports and exports

slipped 3.2 percent to $21.47 billion and 12.7 percent to $17.06 billion respectively. For the same period, rough diamond imports plullUneted 47.2 percent to $277 million.

India's Exports Down India's polished diamond export'> tumbled 17 percent by value to

$1.2 billion and 5 percent by weight to 1.9 million carats . Polished diamond imports plunged 45.9 percent by value to $239 million, but grew 19.4 percent by weight to 1.2 million carat~ .

• R ough diamond imports increased 2.4 percent by value to $1.47 billion and

\

6.9 percent by weight to 15 million carats. Rough exports lowered 7.3 percent by value to $99.6 million, but j umped 24.4 percent by weight to 2.8 million carats.

• From January to December 2015, polished diamond exports and imports dipped 11 percent and 53 percent to $20.62 billion and $3.37 billion respectively.

• From January to December 2015, rough diamond exports and imports declined 25 percent and 22 percent to $1.13 billion and $13.54 billion respectively.

Israel's Exports Drop Israel's polished diamond exports slum ped 20.3 percent to $5 billion for the full year of2015 and

18.3 percent to $1.07 billion for the fourth quarter. Polished diamond imports for the full year of 2015 receded 23 percent to $3.48 billion . • R ough diamond imports sank 30 .9 percent to $2.78 billion for the full year of2015 and 33 .7 percent to

$657 million for the fourth quarter. Rough diamond exports dwindled 28 percent to .$2.2 billion for the full year of2015.

• Polished exports to the U.S., Israel's biggest diamond trading partner, shrank 16 percen t to $2 billion and 28 percent to $1.35 billion to H ong Kong, Israel's second-largest diamond trad ing partner.

Rough Imports Polished Imports

$800 , Q $600

~ ~ $400

" 0 $200 0

•

0

0

0

0

0

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10 20 15

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"000 " 0 , $3000 ~

~ ~ $2000

"

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10

~ I , ~

I

Dec Jan Feb Ma, Apr May June July Aug Sep Oct Nav 20142015

___ U.S. ___ Belgium

Rio Tinto's Production Surges Rio Tinto reported a 50 percent jump in diamond production year on year to 4.3 million carat'> fo r its fourth

quarter that ended December 31, 2015. For the ul11 year 0[2015, the mining company recorded a 25 percent increase to 17.4 million carats. Rio T into expects to produce 21 million carats of diamonds in 2016. • T he Argyle mine in Kimberley, Australia saw production swell 86 percent year on year to 3.4 million carats

in the fourth quarter. • The Diavik mine in Canada saw production contract 3 percent year on year to 899,000 carats in the fourth quarter.

Rockwell's Sales Plunge R ockwell Diamonds reported sales plummeting 66 percent year on year to $5.3 million

in the third quarter that ended November 30,2015. Carats sold sank 71 percent to 4 million carats, for an average price of $1,328 per carat.

• R ockwell's Saxendrift asset saw sales decline 70 percent year on year to ho'L---'r---'r-\ $2.1 million as a result oflower production as well as average stone size .

• R ockwell's RHC asset sold $2.9 million during the third quarter. Production at RHC fell short of targets due to a plant closure resulting from the investigation into a fatal accident at the complex.

Lucapa Hits Record Sales Lucapa Diamond Company's diamond sales from its Lulo diamond project

in Angola improved 33 percent to $5.7 million, at the time of reporting, in the

~:Z:~:~~~:~~: fourth quarter that ended December 31,2015 . The company reported its three I- diamond sales completed in the quarter achieved the highest quarterly sales results

achieved to date, with an average price of$l ,512 per carat . • During the quarter, 28 diamonds ofl 0.8 carat~ or more were recovered. The two largest gems

weighed 74.5 carat~ and 66.3 carats . • Average stone size recovered increased 12.5 percent quarter on quarter to 1.35 carats.

Petra Diamond Sales Slump Petra Diamonds LiIluted reported that its revenue for the

first half offiscal year 2016 that ended December 31, 2015 dipped 28 percent to $154 million.By volume, the mining company sold 7 percent less at 1.3 million carats . • Production was up 2 percent to 1.6 million carats, Petra

remains on track to reach full production of between 3.3 million carats and 3.4 million carats.

• Petra expects sales volume to hit between 1.9 million carats to 2 million carats due to tinting of tenders.

Polished Exports

.~ $3200 f-i-+W+-Hf-i-+j-l+-Hf-i-+4+-Hf-I--4

! $2400 ~~~~~i~~~~~~~~~~~~ OJ> $1600 ~

c: $800

'0 Jan Feb Mar Apr May Jun jul Aug Sep Oct Nov Dec

"" ____ U.S. ____ Belgium ___ India

Precious Metals

DATE

1/4116

115/16

1/6/16

1n/16

118/16

1111 /16

1112/16

1/13/16

1114/16

1115/16

1118116

1119/16

1/20/16

1/2 1/16

1/22/16

1/25/16

1126116

GOLD LONDON PM

1082.25

1077.00

1091.40

1106.35

1101.85

1100.75

1085.40

1088.15

1088.40

1093 .75

1089.20

1086.25

1101.75

1096.50

1096.25

1106.60

1113.60

PLATINUM PM

893.00

873.00

865.00

874.00

853.00

843.00

835.00

839.00

816.00

834.00

820.00

814.00

833.00

862.00

867.00

SILVER

14.0000

14.0100

14.0050

14.0300

14.0400

13.9700

13.8800

13.8300

14.0200

13.8000

13.8800

14.0300

14.0500

14.0100

14.1700

14.2200

14.3300


CALENDAR of events

2-7 AGTA GEMFAIR, TUCSON, ARIZONA, <39ta.org 3 ACCREDITED GEMOLOGISTS ASSOCIATION (AGA). TUCSON CONFERENCE, ARIZONA, accreditedgem%gists.org

3-7 JCK TUCSON, ARIZONA, tucson.jekonfine.com 3-7 MADRID JOYA. SPAIN, ifema.es 3-7 JUNWEX ST. PETERSBURG. RUSSIA, restec-junwex.com 5-8 INDIA INTERNATIONAL JEWELLERY SIGNATURE SHOW, MUM BAl. iijs-signature.org

7-11 JEWELLERY & WATCH SHOW AT SPRING FAIR INTERNATIONAL, BIRMINGHAM. UK, thejewelleryshow.com 8-11 MINING INDABA. CAPE TOWN. SOUTH AFRICA, miningindaba.com

10-16 PALM BEACH JEWELRY, ART & ANTIQUE SHOW, FLORIDA, palmbeachshow.com 12-15 INHORGENTA MUNICH, GERMANY, inhorgenta.com 14-18 INTERNATIONAL DIAMOND WEEK, RAMAl GAN. ISRAEL. en.isde.co.il 17-20 FENINJER BRAZILIAN GEMS &: JEWELLERY SHOW, SAO PAULO, BRAZIL. feninjer.com.br 19-23 NAPLES ART, ANTIQUE &: JEWELRY SHOW, FLORIDA. naplesshow.com 24-28 BANGKOK GEMS &: JEWELRY FAIR, THAILAND, bangkokgemsfair.com 2S-28 SIBJEWELLERY, NOVOSIBIRSK, RUSSIA, sibfair.ru 27-28 JAA AUSTRALIAN JEWELLERY FAIR, MELBOURNE, jewelleryfair.com.aulmelboume 27-29 SJTA ATLANTA JEWELRY SHOW, GEORGIA, atlantajewelryshow.com

MARCH 2016 1-S HONG KONG INTERNATIONAL DIAMOND, GEM &: PEARL SHOW, hktdc.com 3-7 HONG KONG INTERNATIONAL JEWELLERY SHOW, hkjewellery.com S-8 BEST ADORNMENTS OF RUSSIA. MOSCOW, restec-junwex.com

7-12 AJWEl(. AL-AIN INTERNATIONAL JEWELLERY &: WATCHES EXHIBITION, UAE, baderuae.com 10-12 ASA PERSONAL PROPERTY ANNUAL CONNOISSEURSHIP CONFERENCE, VANCOUVER, CANADA. appraisers.org 10-13 JEWELRY INDUSTRY SUMMIT, NEW YORK, jewe/ryindustrysummit.com 10-13 ISTANBUL JEWELRY SHOW, TURKEY, istanbuljewelryshow.com 13-15 JA NEW YORK SPRING SHOW, ja-newyork.com 13-15 LUEUR SPRING, NEW YORK, lueumy.com 13-15 MJSA EXPO NEW YORK, mjsa.org 16-19 POLAND SHOW - AMBERIF, GDANSK, amberif.amberexpo.p/ 17-24 BASELWORLD 2016, SWITZERLAND, base/world. com 18-20 GEM &: JEWELLERY INDIA INTERNATIONAL EXHlamON (GJIlE), OtENNAL chennai.jewelleryfair. in 19-22 EUROPE JEWELLERY &: GEM FAIR, MESSE FREIBURG, GERMANY, jgf-eufope.com

Hong Kong

APRIL 2016 5 SOTHEBY'S MAGNIFICENT JEWELS AND JADEITE, HONG KONG, sothebys.com

5-9 MIDEAST WATCH & JEWELLERY SHOW, SHARJAH, UAE. mideastjewellery.com 7-10 JUNWEX EKATERINBURG. RUSSIA. rest€C-junw€x.com 8-11 CHINA-BEIJING INTERNATIONAL JEWELRY SHOW, newayfairs.com 9-11 JEWELERS INTERNATIONAL SHOWCASE (JIS), MIAMI BEACH, FLORIDA, jisshow.com

13-16 AGS INTERNATIONAL CONCLAVE, ARLINGTON, VIRGINIA, americangemsocietyorg/conciave2016 14-17 VICENZAORO DUBAI, UAE. vicenzaorodubai.com 17-19 SMART JEWELRY SHOW, CHICAGO, ILLINOIS, smartjewelryshow.com

19 SOTHEBY'S MAGNIFICENT JEWELS, NEW YORK, sothebys.com 20 CHRISTIE'S MAGNIFICENT JEWELS, NEW YORK. christies. com

20-22 CHINA INTERNATIONAL GOLD, JEWELLERY & GEM FAIR, SHENZHEN, jeweflerynetasia.com 23-36 JEWELLERY ARABIA, KUWAIT, jewe/feryarabia.com.kw

MAY 2016 3-7 INTERNATIONAL JEWELLERY & WATCH SHOW, ABU DHABI, UAE, jws.ae 7-9 MGJ CONFERENCE, VALENCIA, SPAIN, gemconference.com

1-11 OROAREZZO, AREZZO, ITALY, oroarezzo.it 11-13 INTERNATIONAL JEWELLERY KOBE, JAPAN, ijk-fair.jp

11 SOTHEBY'S MAGNIFICENT JEWELS, GENEVA, sothebys.com 18 CHRISTIE'S MAGNIFICENT JEWELS, GENEVA, christies. com

19-22 VIETNAM INTERNATIONAL JEWELRY. WATCH SHOW, HO CHI MINH CITY, vietnamjewelryshow.com 2S-29 JUNWEX NEW RUSSIAN STYLE, MOSCOW, restec-junwex.com 30-612 G.L.D.A . INTERNATIONAL GEM. JEWELRY SHOW, LAS VEGAS, glda.com

31 CHRISTIE'S MAGNIFICENT JEWELS, HONG KONG, christies. com 31-6/6 JCK LUXURY, LAS VEGAS. luxury.jckonline.com

• The De Beers Group of Companies named Nimesh Patel as

chief financial officer. Patel succeeds Gareth Mostyn, who is now executive head of strategy and corporate affairs. Patel was previously group head of corporate finance at Anglo American, which owns a majority stake in D e Beers.

• Dominion Diamond Corporation has appointed Jim Gowans

and JosefVejvoda to the board of directors. Gowans,currently president, CEO and director of Arizona M ining Inc., will be the nonexecu tive chairman of the board. Vejvoda, president of Jove Capital Inc. and portfolio manager at K2 &A~sociates Investment Management Inc. "vas identified and suggested to Dominion by a group of shareholders.

• Tammy Kidder has been promoted to vice president of tools and supplies at Stuller, Inc., taking over the role previously

filled by Darrell Warren. Kidder was formerly vice president of findings, metals and recycled mater ials.

• The United Arab Emirates' (UAE) Ministry of Economy selected Ahmed Bin Sulayem, as chairman of the Dubai

Multi Commodities Centre (DMCC), as the country's chair of

the Kimberley Process (KP) for 2016. T he UAE officially assum ed its position as chair o f th e KP in 2016 after having been elected as vice chair in Septem ber 2015 .

• The Israel Diamond Exchange (IDE) has made Eli Avidar

managing director, taking over from Moti Besser.

Avidar wi ll rema in as managing director of the Israel Diamond Institute Group of Companies (ID I) alongside his new position, as reported by R apaport News.

• The Indian Diamond & Colorstone Association (lDCA) elected

Ashok Sancheti of Pioneer Gems as its new president for the

2016 executive committee. l~sh Barmecha of Niru NY

Ltd. was appointed vice president,Jay Mehta ofAmikam as secretary, Prateek Nigam of O riental Gemco (NY) asjoint secretary and Nirav Doshi ofJewelex NY Ltd. as treasurer. IDCA's new board of directors are: • SJwilesh Jhalafli, Prompt Gems Imptrs, Inc.

• Afok Mehta, IDo. • Atit Mehta,Atit D iam ond Corp. • Rajeev Pandya,Ashi LLC. • Neeraj Rawat, R awat Gems. • Neil Savafia, Neil Savalia, Inc. • Mehul Shah, Shivani Gems, Inc.


• R ayazTakat,T akat Gems USA, Inc. • Nilesh Sheth, N ice D iam onds.

• Yoram Dvash, owner of Y. Dvash Diamonds, has been

announced as president of the Israel Diamond Exchange (IDE).

H e will be replacing Shmuel Schnitzer as president of the bourse. Appointments to the bourse's board and conmlittee are: • Yehezkel B lum - executive vice president

• Shalom Papir - senior depu ty president • Yaacov Ahoon Shely - vice president and treasurer • EI Shiri and Yoram H arel-Haimoff - vice presidents

in rotation • Meir Dalruni and Shai Schnitzer - honorary secretaries • Cha im Volner , Emma J an over, P h i li ppe Frey,

H erzel Siton, Shlomo Eden, Hani Israel, Ban Samuel - board members

• The Natural Color Diamond Association (NCDIA) has

picked Barbara Wheat as executive vice president. She was previously execu tive d irector of th e In ternational Colored GemstoneAssociation (lCA) and was an adviser on international relations for the T hai Gem and Jewelry TradersAssociation (T GJTA).

• Polished diamond manufacturer leo Schachter Diamonds

has hired Joseph Green as its new executive vice president of

sales. Green will be responsible for market planning and strategic business developm ent. Green was previously senior vice president of Freder ick Goldman.

• Samantha laJuett joins RDI Diamonds, a diamond wholesaler based in Rochester, New York, asa simple solutions

specialist. She will be working "vith RDl's stock programs to ensure clients get th e stock they need. LaJuett is a Gemological Institu te o f Amer ica (G IA) D iamond Graduate and she is the daughter of Sara LaJuett, RDl's sales manager, and niece of Michael Indelicato, RDl's CEO, both of whom are cofounders ofRDl.

• The Women's Jewelry Association (WJA) nominated Brandee Dallow, director of Rio Tinto Diamonds North

America representative office, as the new president of the

WJA International board of directors. Jenny luker, president

of the Platinum Guild International (PGI), takes on the

president-elect role. Other appointments are:

• Kristie Nicolosi, president and chief executive officer of The Kingswood Company, as treasurer.

• Michelle Permlteall ,director of marketing communications at Baume & Mercier, as vice president of administration.

• D es iree H anson, directo r of luxu ry re tai l client development atThe NPD Group, as vice president of chapters affairs.

• Danielle Illgwer Colten,VP of IT development and marketing at leo Ingwer Inc.,a~ eastern regional director; Sara Commers, owner of Conuners Custom Jewelers, as central regional director; Clare Ullman, owner of Clare Ullman Design, as western regional director.

• Craig DanJortlt,director of global business development at the Gemological Institu te of America (GIA) as international affairs co-chair; Monica Elias, founder of Elias World Media (EWM), as sponsorship chair; Rebecca Moskal, partner at Conununique, as events co-chair; Eri" O'Donne1l,jewelry group marketing director at Emerald Exposi tions, Marett Rosen, vice pres ident of bridal and jewelry at Stuller, Benjamin Smitltee, CEO of the Smithee Group, as education chairs, Lauren Thompson, associate director of communications at Jewelers of America OA) as public relations coordinator;

• Deborah Yonick , jewelry journalist, as director ofW]A Unplugged, a group for"W]A members not near any chapters.

• The Jewelers' Security Aliiance{JSA) made Stewart E. B. Wicht

its new chairperson for a three·year term . W icht is the CEO of Role x Watch USA, and has been on the JSA board for five years . He replaces outgoing chairperson Adam Heyman. Kevin Valentine was also newly elected to the JSA board. He is the senior vice president of audit, loss prevention and risk management at SignetJewelers.

• Eric Friedland has been chosen as president of

Peregrine Exploration while retaining his title as cha irman.

Friedland is replacing Brooke Clements, who stepped down as president and CEO of Peregrine. Clements will continue to act as a consultant to the company.

• In other JSA news, the organization honored David Sexton

and Jamesliscinsky at its annual luncheon on January 9, 2016

in New York City.

• Sexton, vice president for loss prevention consulting

at Jewelers Mutual Insurance Co., received the Industry Service Award. Sexton was honored for his work in jewelry loss prevention.

• Liscinsky,seniorspecial agent with the US. Department of Justice's Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), received the James B.WhiteAward. Liscinsky was honored for his investigative work that resulted in the arrest and conviction of eight gang members who robbed traveling jewelry salespeople 111 SlX states.

• The Jewelry Industry Summit (JIS), a forum on sustainability

and responsible sourcing, has opened registration forthe event.

JIS will be held at the Fa,hion Institute oITechnology (FIT) in New York City from March 11 to 13,2016.The swnm.it will feature interactive meetings with small and large discussion groups assisted by professional facilitators rather than a filll schedule of speakers. Registrants ofJIS will also gain free entry to the JA New York spring show, MJSAExpo New York and LUEUR, which conunence March 13 at the Jacob K.Javits Center in New York City.

• The American Society of Appraisers (ASA) announced the

upcoming 2016 ASA Personal Property Annual Connoisseurship Conference will be held March 10 to 12, 2016 in Vancouver,

Canada. The theme of the conference is "The Sacred and the Profane;'where participants will discuss how appraisers deal \vith sacred objects and the rules. Highlights include: • An introductory lecture on the appraising of sacred

objects by Richard-Raymond Alasko. • A panel on contemporary art and collector car markets

by Don Thompson, David Kinney and Donald Osborne. • Sessions on appraising sacred books by Lee Biondi :lnd

John Henley; Chinese fine and decorative art market by David Borodin; appraisal ethics by Mary Jane Andrews and more.

• Museum and gallery tours, including the Vancouver Art Gallery and the Museum of Anthropology.

• The 47th St. Business Improvement District (BID), also

known as the Diamond District, is hosting a free educational

seminar for the diamond and fine jewelry industry in New

York City on February 23, 2016. The seminar will feature presentations by the US. Department of Commerce; transportation and logistics insurance provider Roanoke and events organizer R eed Exhibitions . ..


RETAIL PROFILE

• )

Originality and creativity are on display at French Designer Jeweler in Scottsdale, Arizona.

By JOYCE KAUF

have built my business around sellingj ewelry from original artists who are 31m extremely fine

...... ~, craftsmen," explains French Thompson, owner of French Designer Jeweler in Scottsdale,Arizona. Intent on finding jewelry that "makes heads turn," he selects o nly those designers whose diamond and gemstone jewelry reflects that unique combination of artistry and skill.

Thompson's "ah-ha" moment came after seeing an exhibit at the Denver Museum of Art that featured the work of several Colorado metalsmiths . A college student at the time,Thompson recall" the"life-changing"impact of the j ewelry. " I had never seen such creativity before." O ne of the exhibitors was a professor at Colorado State University. Thompson later enrolled there and earned a Bachelor of Fine Arts (BFA) in metalsmithing. After graduation, he moved to Scottsdale to work at a bronze art foundry. He considered opening his own foundry, but decided to accept a jewelry apprenticeship instead. He spent the next 13 years working for ajeweler whose retirement prompted another career decision.Thompson bought all his fixtures and in 1996 opened his own store.

Located in downtown Scottsdale, the store i'i surrounded by art galleries. With its enviable weather, the city is a magnet for tourists in the high season, which runs from December through May. Tourists account for 60 percent of Thompson's business, but he has developed a loyal following who return each year. He offers a simple explanation:"My j ewelry stands out."


UNIQUE FLAVOR "We're not va nilla," says Thompson , u sin g an

ice cream analogy, but noting th at vani lla is not intended as a derogatory designation since it outsells all the other flavors combined. "All over America, you can go from one store to another and basically find the same jewelry.A lot of people buy it. But I like to add other ingredients that enhance the flavor." He seeks out designers whose work is not derivative. " They are studio jewelers - go ldsmiths and m etalsmiths themselves - who for the most part design and create their own pieces. They are the trendsetters who others in the industry will emulate." And he refers to them as "artists" for their one-of-a-kind work produced in limited quantity.

Thompson acknowledges that "artists" who excel at both creativity and design skill are a small group. Exclusivity is another cr iterion. Most of the artists he sells have no other or very limi ted exposure in the entire state . Alex Sepkus is his best seller, followed by Atelier Zobel, Barbara Heinrich and Carolyn Tyler, who works in 22-karat gold. Rings, pendants and earrings are his top-selling categori es.

"We tend to like a lot mo re color in Arizona," says Thompson , citing the popularity of yellow gold settings and colored gemstones, including peridot, aquamarines, colored sapphires, rubellites, tourmalines and blue zircons .

STARLIGHT SPARKLE Thompson attributes his strong diamond sa les

[0 the higher- quality diamonds in the handmade, labor-intensive pieces."There are no SI diamonds in the score,"Thompson points outVS and G to H diamonds represent the " minimum" quality he carries . However, most di amonds are VVS in the E to F color range. For his own custom designs, Thompson only uses VVS [ 0

flawless clari ty diamonds. Thompson likes to recall how he was able to demonstrate

the quality of his diamonds t,_o~ .. custom ers in a dramati c .oil

way. H e was showing a customer a diamond snowflake pendant, but she was no t convinced about the diamonds' quality. It was already evening, so he [Old her to take the pendant outside to look at the diamonds in the dark. She returned to the store "amazed" at tlleir sparkle. As she was purchasing the item, Thompson explained, " Fine, well-cut diamonds don 't need much light to look beautiful."

GALLERY OF JEWELS Thompson has created an

artist's gallery in his 700-square-foot • store with custom mahogany cases and custom-designed mirrors bordered in that same wood. To complete this "world of art," two-dimensional artwork graces the walls.

"I like to create vignettes for each artist;' says Thompson, who favors merchandising by designer, rather than category. "The jewelry is so distinctive, even within each designer, that customers have a range from which to choose:' He frequently changes displays to offer his customers more options to add another designer to their collection.

Even trunk shows reinforce the artisti c theme -Thompson calls them "artist appearances."They are held five times a year during high season and always during the Thursday ArtWalk, a weekly event held every Thursday and sponsored by the S cott.~dale Gallery Association . Thompson will also feature his gold and colored gemstone jewelry in the five special "Gold Palette ArtWalks," organized by the same local galleries this season.

Thompson's retail philosophy is sunul1ed up in the phrase, "Open the door to originality"'" that he uses in his advertising and on his website, frenchonmain.com. With an artist's eye for detail, he invites customers to experience a world of creativity and craftsmanship . ..

•

, •

, ,

Barbara Heinrich


r

-'1"'- he 4Cs are not the only things that make a piece of diamond j ewelry a sales winner. In an ongoing series, Rapaport Magazine explores the "3Ws"what's selling, what's not and why - by going

straight to the people who really know - jewelry retailers. Each month, we ask a sampling of retailers to comment on the important issues that are facing the industry today. H ere is what they had to say when asked: "Which gemstones are most popular? D o yo" tleed to educate your custom ers m ore about colored gemsto/les than with diamonds?JJ

JOHN CARTER, PRESIDENT JACK LEWIS JEWELERS BLOOMINGTON, ILLINOIS

"Color gemstone sales are steady but nothing that would rival diamond sales . While we have sold the big three gemstones - sapphire, mby and emerald - and some significant pieces, we also do some more exotic stuff. Spinel is probably one of our best-selling colored stones,just because it's unusual and the color is typically more natural and it's durable. In fashion jewelry, colored gemstones are increasingly a bigger part of what we sell, especially with the silver manufacturers .


By PHYUIS ScHILLER

" It i~ frr more of an educational process in selling colored stones. Customers typically come in armed with some knowledge of at least the 4Cs of diamonds. Explaining abou t treannent~ has to be part of the repertoire so they understand the reality behind the colored stones they are buying and that most gems are treated.With colored stones, we're usually creating the passion for that particular gem, showing them how special it is and that it typically came out of the ground the color they're seeing, which is why we do well with some of the more exotic stones."

KAREN KUHLMAN, MANAGER DON'S JEWELRY & DESIGN WASHINGTON, IOWA

"What sells primarily are the big three, sales are split pretty evenly among them. Next after sapphire, ruby and emerald is blue topaz or morganite. With the big three gemstones, it's more fashion styles, but beyond that, for blue topaz, amethyst, peridot and so forth, it's more basic styles that sell.

" I don't think much education is needed to sell colored stones, except concerning wearability and durability.We do explain treatments to customers but it doesn't affect whether they're going to purchase the piece or not."

DAN WILSON, MANAGER STRAUSS JEWELERS MOUNT VERNON, WASHINGTON

"We sold across the board this past Chrisunas, diamond semimolll1ts, engagement rings and colored stones both in silver and in white gold and yellow gold. I would say, if you combine the silver and the gold, colored gemstones were a good fifth of our business. As far as volume goes, we probably sold more of citrine, blue topaz, pearl, which we put in that category, garnet and amethyst than the big three stones.We do explain that most colored stones are treated in one way oranotber.We go into it as deeply as the customer wants to, but it's usually not a big issue. Colored gemstones are less of a conunodity than a diamond i~ ... vith certificates and the internet.We sell it more based on color and romance; it's definitely more fim."

JEFF FOX, MANAGING PARTNER TORIN BALES FINE JEWELRY VICTORIA, TEXAS

" In terms of color, based on the past six months, for us, sapphire is still probably number one.This year, tanzanite was second in line. A lot of people's reference to color is their birthstone or because it's a favorite color.With a little more education, you can develop their appreciation for other things about gemstones. I think customers have a surface level understanding about treatments. We try to educate our customers on everything, whether it 's diamonds or color."

BRENDA NEWMAN, OWNER THE JEWELRY SOURCE EL SEGUNDO, CALIFORNIA

"We love colored stones; we started with colored stones. But in order to grow our business, we had to get into the bridal business. Diamonds are always the thing that brings people in and the thing that people want. And in theory, if you can secure them as clients ,

Rona Fisher

then they continue to grow with you. Color for us is a lot more fun , a lot more creative. This

past D ecember, we sold more higher-end emerald, ruby and sapphire pieces than I have probably sold in the past five years. By the same token, I had a couple of larger diamond sales from existing clients . There's education involved no matter what you sell and talking about treatments is a natural part of the discussion.

"My biggest co llectors of colored gemstones are working women between the ages of 30 and 60. They interchange their wardrobe of jewelry along wi th their clothes and shoes and handbags . They've got the disposable income to buy a really special pink sapphire ring and then some matching diamond earrings or a really interesting African tourmaline ring because it's beautiful. But without disposable income, clients will limit themselves to just diamond pieces. They won't always be able to reach for that green African tourmaline because it doesn't go with everything. It takes a really specific woman to wear interesting colored stones."

BRUCE WATTERS, CHIEF EXECUTIVE OFFICER BRUCE WATTERS JEWELERS INC ST. PETERSBURG, FLORIDA

" I really love the colored gem department in my store. And I have a collection with nothing below first class; I have no synthetics . I'm very proud of our colored stones and we do quite well with them. Sapphire would be the predominant stone because it goes better with everything else and of the big three stones, it's the least expensive, which might have some bearing on it. Of course, there's a lot of explanation that this is not a conflict stone and this is not a treated stone except perhaps with heating-because almost all colored stones are heated to

enhance the color, that's ahnost a given. But rather than going through the 4Cs, like you do with a diamond, it's fun to get into the history, the folklore, the superstitions and all of that stuff about colored gemstones." .


Consumer Confidence Jumps The Conference Board Consumer Confidence Index®

improved again to 98.1 in January 2016, up from 96.3 in

December 201S.The Present Situation Index was unchanged

at 116.4 and the Expectations lndexincreased to 85.9 fium 83.0. • Consumers saying business conditions were "good"

remained unchanged at 27.2 percent, while those saying

business conditions were "bad" declined to 18.5 percent

from 18.9 percent.

- Those claiming jobs were " plentiful" and "hard to get"

both decreased to 22 .8 percent from 24.2 percent and 23 .4 percent from 24.5 percent respectively.

• Respondents anticipating their incomes to increase

climbed to 18.1 percent from 16.3 percent, and those expecting incomes to fall also went up to 10.8 percent from 9.5 percent.

• Consumers expecting business conditions to improve

over the next six months rose to 16 .2 percent from

14.5 percent, while those expecting conditions to worsen

inched down to 10.3 percent from 10.8 percent.

Macy's to Close Stores Macy's, Inc. said it will close 40 stores out ofa current total

of about 770 as part of a restructuring initiative to cut costs.

The announcement came in light of what Macy's called

"disappointing 2015 sales and earnings performance." Its

comparable sales on an owned-plus-licensed basis declined

4.7 percent year on year in the months of November and

D ecember 2015 combined, or a drop of5.2 percent on

an owned basis .

- The retailer closed four stores in the final three quarters of

Jewelry Stock Index

COMPANY 1128116 12131/15 % CHANGE

Blue Ni le 33.38 37.13 -10%

Signet Group 113.98 123.69 -8%

Tiffany & Co. 61.02 76.29 -20%


2015, with the other 36 to be closed in early spring 2016.

The 36 stores account for approximately $375 million in

alU1ual sales.

- About 3,000 associates will be affected by the closings,

or approximately three to four positions per remaining

Macy's store.

- The closings are aimed at achieving approximately

$400 million in annual cos t savings begi nning in

2016. Macy's will invest in growth strategies in its

omnichannel capabilities .

- Macy's expects comparable sales on an owned-plus-licensed

to continue falling in the fourth quarter by 4.7 percent,

instead of its projected decline of between 2 percent and

3 percent. This would translate to a full -year 2015 sales

slump of2.7 percent.

Birks 3Q Sales Increase Jewelry retailer Birks Group reported that comparable

store sales for the third quarter ti cked up 3 .5 percent

year on year. It reflects a 5 .9 percent growth in comparable

store sales in Canada and a 1.4 percent improvement in

comparable store sales in the US, notwithstanding the

strong US. dollar impacting tourist spending in the US.

- Total consolidated net sales fell 6.6 percent year on

year in the third quarter after currency considerations.

Total consolidated n et sales rose 1.2 percent before

currency considerations.

- Timepieces and fin e jewelry sales in the US. jumped

2.4 percent year on year for the holiday period. Canada

stores continued to experi ence an increase in average

sales transactions .

Rapaport Jewelry Index

'''''

'"' "" "" ,

J F M A M J J A S 0 N 0 J 20" 2016

- Dow.)ones Index - Rap Jewelry Index

Michael Hill's 1H Sales Grow Australian jewelry retailer Michael Hill announced

an 8.7 percent year-on-year growth in all store sales and

a 4.8 percent improvement in same store sales across its Michael Hill and Enuna & Roe brands in the first

half that ended December 31, 2015. The group earned $211.7 million in all store sales and $200.3 million in same

store sales during those six months.

• Forallstore sales the Michael Hill brand saw 3.5 percent growth

to $120.5millioninAustralia,6.1 percent to $43.5 million in

New Zealand, 18.4 percent to $36.5 million in Canada and 25 .1 percent to $7.4 million in the U.S.

• The Michael Hill brand achieved 2.6 percent growth to

$1 18 .1 million inAustralia,6.1 percent to $43.5 million in New Zealand,S .2 percent to $30.5 million in Canada and 1 percent to $5 .6 million in the US. for sam e store sales .

- The Emma & Roe brand reported all sto re sales

skyrocketed 89.4 percent to $3.2 million in Australia and

265 .8 percent to $254,800 in New Zealand.

• Same store sales for the Elluna & Roe brand in Australia

jumped 49.1 percent to $2.3 million .

• The group considered the Enuna & Roe brand to still

be in its trial phase, and expects to open five more stores

before the end of the financial year.

• The board of Michael Hill International Limited also

alU10unced that it was considering listing the company

on the Australian Securities Exchange (ASX) .

Jewelry Sales Rise, Prices Fall U .S. specialty jewelry store sales rose 3.6 percent

year on year to $2.6 billion in November 2015, according

to the U.S. Census Bureau. Specialty j ewelry store sales

from January to November 2015 fell 1 percent year on year

to $24.69 billion. Total retail and food service sales in

November increased 1.6 percent to $448.58 billion.

Th e consum er pri ce index (CP I) for jewelry

shrank .4 percent in December 2015 from November 2015,

according to the Bureau of Labor Statistics. The C PI

for all urban consumer goods declined .1 percent.

Consumer Confidence Inde

'" '00

" ~

" , , , • , •

• The CPI for watches slipped 1.6 percent month on month

in December, but rose .8 percent year on year.

• Inflation was recorded to be 1 percent lower year on year.

CTF 3Q Sales Slump Hong Kongjewelry retailer ChowTai Fook's (CTF) retail

sales value dwindled 11 percent year on year in the third

quarter ending December 31, 2015.The company, China's

top jewelry retailer by market value, cited fewer tourists

from mainland China into Hong Kong and weaker local

retail sentiment~ in Hong Kong and Macau as reasons for

the decline. CTF filed its report solely in percentage terms.

• Hong Kong and Macau's retail sales value collectively

fell 20 percent, while mainland C hina dipped 6 percent.

• Same store sales dived 15 percent year on year by value

and 13 percent by volume across the group. H ong Kong

and Macau's same store sales tumbled 23 percent by value

and 21 percent by volume. Mainland China's same store

sales slipped 6 percent by value and 7 percent by volume.

• Gem-set jewelry same store sales lost 16 percent in

Hong Kong and Macau,and 7 percent in mainland China.

• Gold products accounted for 56 percent of CTF's total

retail sales value, followed by gem-set jewelry at 28 percent,

platinum and karat-gold products at 12 percent and

watches at 4 percent. •

u.s. Retail Jewelry Store Sales S Billions

J F M A M J J A 5 0 N D

2011 1.65 2.27 2.01 2.23 2.67 2.11 2.02 2.22 2.12 2.04 2.50 5.72

2012 1.67 2.60 2.05 1.95 2.67 2.14 1.94 2.1 1 2.04 2.05 2.53 6.03

2013 1.78 2.53 2.13 2.23 2.70 2.12 2.00 2.14 2.01 2.23 2.67 5.n

2014 1.89 2.61 2.14 2.28 2.83 2.16 2.13 2.22 203 2.16 2.51 5.56

2015 1.77 2.47 2.03 2.22 2.n 2.28 2.19 2.22 2.02 2.13 2.60

Total Year Year-to Date "fo Change

2011 29.56 23.84 1%

2012 29.78 23.75 0%

2013 30.31 24.54 3%

2014 30.52 24.96 2%

2015 24.70 24.70 -1%

Annual Percentage Rates

JFMAMJJASOND

Rapaport February 20 16 111

WP Diamonds Releases Ranking Online buyer of diamonds, jewelry and watches

WP Diamonds released a ranking of the top diamonds and diamond j ewelry preferred by consumers in the U.S. Titled "America's Diamond and Jewelry R anking," the report draws data across 15,000 consumer inquiries over 50 states. • New York was reported to have the highest average

value per carat of diamond, followed by Florida, California, Connecti cu t and M aryland.

• M aryland topped the charts for largest average carat size owned at 1.75 carats .The following nine states include: Michigan, 1.69 carats; Illinois, 1 .59 carats; Alaska , 1.49 carats; New York,1.47 carats; Texas, 1.47 carats; Florida, 1.47 carats; Virginia, 1.44 cara ts; Arkansas, 1.41 carats; California, 1.40 carats.

• Round shapes are most popular in th e U.S. -55.4 percent; followed by princess - 22.1 percent; marquise - 4.8 percent; emerald - 4.5 percent and cushion - 4.1 percent.

• The top five states in which each cut is most popular are: ROJ/ nd - Mi chigan, Montana , Tenn essee, Mississippi, Kentucky; Princess - Nebraska, Kansas, Arizona, Ohio, Wisconsin; Cushion - Mississ ippi , Montana, South Carolina , Texas, Delaware; Emerald - Rh od e Island , Kansas, Texas, West Virginia, South Dakota; Heart - Delaware, Florida, Minnesota, Utah, O regon; Marquise - Louisiana, Illinois, Indiana, Virginia, Missouri; Oval-Texas, Minnesota,Arkansas, New York, Michigan; Pear - Texas, Connecticut , West Virginia, C alifornia, Oregon and R adiatlt -South Carolina, Utah,WestVirginia, Iowa,Arkansas.

FTC to Change Jewelry Guide The Federal Trade Commission (FTC) is seeking

conunents by April 4, 2016 on its latest draft of proposed changes to the FTC Guides for the Jewelry Industry. The guides - formally called "Guides for the j ewelry, Precious Metals, and Pewter Industries" - provide advice on avoiding deceptive claims about materials used

11 2 Rapaport February 2016

for the jewelry industry, including diamonds, precious metals and pead s. The FTC is making changes to the guide after a public roundtable in 2013 agreed that the FTC's guides should be amended. • The FTC specifically requested comments on issues concerning composite gemstones, pearls, diamonds and precious metal alloys.

• The guide's proposed changes include topics covering below-threshold alloys, precious m etal contents of mixed metal products, synthetic diamonds and treatments.

• The new guide will target rules governing the use of the word "gem," as well as appropriate vocabulary and guides for disclosures.

· The j ewelers Vigilance Committee avC} said it plans to reconvene a conunittee of industry associations and a separate conunittee open to all industry members to formulate a response to the new draft.

JVC Publishes New Guide The j ewelers Vigilance Conuni ttee aVC) published

a guide that helps jewelers ensure their products sold comply w ith the law. The guide "Getting It Right - JVC's Guide to Quality Programs for Jewelers: Ensuring Legal Compliance" was published with a grant from the International Gemological Institute (IG I}. The first of its kind from JVC, the gu ide differs from JVC's previous resources by providing jewelers practi cal information on best practices they can adopt to ensure compliance, such as a sample inspec tion report and a checklist , said Suzan Flanun ,JVC's senior counsel. Flanun added that the guide would be relevant in the recent climate as the number of regulatory laws and interest in complian ce increase. The gu ide covers product areas including: • Precious metals • Gemstones and pearls, including diamonds • Advertising and disclosure • Country of origin markings • Plant and wildlife products

GIA Debuts NY Design Program The G emologi ca l Institute of America (G IA)

launched a 26-week diploma program in January 2016 in New York City for j ewelry design and technology ODT) students.Taught in a classroom in the International Gem Tower in the Diamond District - GIA's N ew York campus - student'i learn how to use computer-aided design/computer-aided manufacturing (CAD/CAM) software and 3D printers as a rapid pro totyping system to design and manufacture jewelry. The next session will conunence on September 29, 2016.

Carelle Earns "Made in NY" Mark Jewelry brand Carelle has become one of the first

fashion and jewelry companies to be recognized under New York City's "Made in NY" distinction . O riginally an initiative of the N Y C Economic D evelopment Corporation to recognize and celebrate NYC's film,TV and digital sectors, "Made in NY" has been expanded to include New York City's fashion and manufacturing industries. The fashion initiative was launched in August 2015 and will feature various programs to support local fashion industries which include promotional campaigns, business-to-business opportunities and financing options.

JA Announces GEM Award Winners

finest champions. She was supportive, smart, and giving of her remarkable talents. She touched the lives and hearts of so many." Amber Michelle, editor in chief of Rapaport Magaz ine, said, "Cindy Edelstein loved jewelry and was a driving force in thejewelry design conullunity. She was constantly developing innovative new programs to promote designer jewelry to the industry and to assist designers in growing their businesses. Above all else she always said that she was blessed to have her husband Frank and her daughter R emy."

Designer Erica Courtney has launched a crowdfunding effort to help create a college fund for Edelstein' daughter Remy Sasha Stankus. The fund aims to raise $350,000 and has raised over $40,000 so far .•

Jewelers of America OA) announced the winn,er~s;..~ ... of the 14th annual GEM Awards held in ... New York C ity in January 2016. More than 450 people in the jewelry industry attended the event. The winners are: • Rob Bates, news director of J CK, for the

GEM Award for Media Excellence. • Cartier, for the GEM Award for Watch Design. • Temple St. Clair, for the GEM Award for Jewelry D esign.

Cindy Edelstein Dies at 51 Cindy Ed elstein, author, edi to r and lo ng-time

consultant to the industry died on January 24, 2016 of heart failure. Edelstein was 51 .Beginning her career in the industry as a fashion editor at JCK magazine, Edelstein founded the Jeweler 's Resource Bureau in 1991. Her husband Frank Stankus joined her in the business five years later. Edelstein, a member of the Women's Jewelry Association (WJA) , was well-known as a trade show consultant for the jCK, Couture and AGTA show. She also created her design-centric show globalDESIGN.

A spokesperson from trade organization j ewelers of America OA) said, in an email to Rapaport News, "jewelers of America and all of our members mourn the loss of Cindy Edelstein. She was one of our industry's


COLORED GEMSTONE

Backing translucent pastel gemstones with hematite or mother-of-pearl to create doublets

adds new colors and texture to gems.

e lvety purple amethyst, sunny lemon quartz, min t green prasiolite, blue topaz

and rhodolite are just a few gemstones that are being transformed into spectacular shades of

color after being fused together with other material such as hematite or mother- of-pearl to form doublets. These innovative combinations are giving well-known gemstones new depth and luster - making a technique that was best known for creating beau tiful and durable opals popular again.

In addition to creating new colors with natural gemstones, doublet~ are a way to use natural gemstone material that is sometimes too fragile to be se t and worn alone. This is the case with most opals, which are the most common and popular doublet. Opal deposi ts form in thin layers, making the stone so fragile that it is often too delicate to wear. By fusing this material on top of a less expensive natural or man-made material, the opal becomes more durable.


By SHERYL JON ES

Peter Blythe,ofMineshaft, based in Canberra , Australia, and a self-professed "opalholic," says he cuts his opal into

free-form shapes and fuses it to either potch opal, which is opal without color or play, or ironstone, which is the less desirable product that remains after cutting a boulder opal. The result offi.1sing opal on top of dark material is a vivid, dazzling array of colors that looks amazing and sell quickly.

Double ts also m ake gemstones th at are more expensive due to lack of availability more affordable. " I have seen an increase in the popularity of opal doublets within the past five yea rs due to the shortage and expense of solid black opal,"Blythe says. "Doublets are a good alternative for a fraction of the cost, but with the vivid colors and individuality only opals can provide. Solid black opal can range in price from .$3,000 to $100,000, w hich is too expensive for most customers. But a high-quality doublet that ranges from .$300 to $1,000 is much more affordable."

IMPROVED TECHNIQUE

Abeer Jain, director of marketing and sales at Fine Gems NY Inc., says he and his father,Amar Jain, president

of the finn, have been manufacturing doublets for the past ten years . "As quality natural gemstone material becomes

\ sca rce and more expensive, thi s is a way to provide new products by maximizing the use of the same natural stones we always offer without using synthetics to create new colors,"

says Abeer. Abeer and his father improved the

process of nlsing the stones together using a proprietary process."The technique involves creating a special adhesive to merge the stones that does not bubble or alter the natural composition or the color of the natural

. " gems ton es to any way, explains Abeer. The result~ are

beautiful, durable stones that have a more intense, rich color that looks seamless from the top.

NEW COLORS

Gemstones such as good-quality amethyst

(

and prasiolite in very large sizes can be expensive. But making doublets requires less material and has th e added benefit of g iving a new look to more expensive gemstones. Amar adds, "The most popular product combinations have been amethyst backed with hematite, rose lavender amethyst backed with hematite, crystal with hematite, lemon quartz with hemati te, moon quartz with mother-of-pearl, rose quartz with mother-of-pearl, crystal with mother-of-pearl." The hematite adds sparkle and shimmer and the mother-of-pearl gives stones a luminescent quality.

Margo Manhattan

These attractive combinations, which can be set in all types of metal, offer customers more options and a way

for jewelers to increase sales . Other gemstone combinations the l ains

manufacture include smoky quartz with m other-of-p earl, smoky quartz with black

mother-of-pead, citrine with mother-of-pearl, peridot with mother-of-pearl, blue topaz with mother-of-pead, amethyst with black mother-of-pearl, lemon quartz with pink mother-of-pearl, prasiolite with hematite. Th e l aios are continually addin g n ew creat ive

combin ations, su ch as crystal with rh odolite, peridot with mother-of-pearl and aquamarine

with mother-of-pearl. Th e l aios' new lin e of doublets is

a success with long-time customers, among them , jewelry designer,

Margo Manhattan. Her eponymous line features the crystal and hematite and

crystal and mother-of-pearl doublets. " I love the stones . The colors are deep and mesmerizing. They work

perfectly with my edgy rock'n'roll design esthetic," says Manhattan.

With so many different varieties of gem stones t o choose from, the

potential co mbinations of gemstone doublets and resulting shades of color are endless. Selecting the right colors can be challenging. "My rule of thumb is if it is bright and colorful, it will sell quickly,"

says Blythe. But he adds, "To make the most vibrant doublets requires high-quality material, which is getting harder to source." Even so, doublet~ are still the best option of presenting natural gemstones in new colors. Doublets may provide the right competitive edge in a market where manufacturers and jewelry designers need to present new and exciting material at affordable prices ...


LEGACY

The desire to create adornments w ith beautiful gemstones is as old as civilization. And the desire to own these jewels, says a new book,

has played a major role in shaping history.

ant, take, have;' says Aja Raden, in her new book, Stoned:Jewelry, Obsession, and

How Desire Shapes tlte JMJrld, are words that sum up the feelings that jewels have inspired

throughout the ages . "We can unspool the neurology of it, the psychology of it and the economics of it, but it really does come down to desire. I always have had a particular obsession about jewelry - I see it, I want it. And it turns ou t science backs me up. W hen you see something you like, you are compelled to take it."The "science" behind this love of sparkle, she explains, "is because our brain has evolved for hundreds of millions of years, from when we were primates, to look for water. So when we see something shiny or glittery, every part of om brain lights up."

Raden, a j ewelry designer and now chronicler of jewelry history, says she collected not only jewelry but facts about it . "So I knew most or the majority of these stories before I ever started writing this book." In her book, she points out how specific jewels influenced world events, from Queen Isabella's love of emeralds inspiring Christopher Columbus to seek ou t wealth in the NewWorld to the elaborate diamond necklace


By PHYUIS ScHILLER

whose theft tarnished MarieAntoinette's already shaky public image and contributed to the French Revolution and the downfall of the French monarchy. And then there's the "perfect" pearl necklace, La Peregrina, that Queen Elizabeth I coveted enough to risk war with Spain, ultimately leading to the defeat of the Spanish Annada and Britain's Golden Age. The book presents eight examples in all, but the author says there were many others she might have included . Ultimately, Raden says, the story these jewels tell is how beautiful things affect people and the emotional attachment people form with them."And it's because they're not just things, they're symbols. In some cases, they're tangible, physical stand-ins for intangible things but at the same time they're also artifacts ."

People melt down statues, people paint over frescoes and knock down buildings eventually, Raden says. "The reason we have jewelry from the Stone Age is because it's so beautiful nobody takes it apart.And because it is a time machine, a VIP pass to royalty or history or things you'd other.vise never have access to.You can pick up this jewel and say, 'All of these things happened and they were all wearing this or trying to get this.'"

AN ENGAGING IDEA So much of jewelry purchasing,

points out Raden, is not just about what you want but the desire to fit in and keep up. It 's how De Beers created the engagem ent ring imperative, she says, a story she relates in the book. "Afte r WWI I, in order to expand their diamond market in America, De Beers needed to invent a product to sell to the rising middle class, w ho didn 't necessarily want diamonds, in a ring or otherwise." What De Beers did,she says, was to market the diamond engagement ring as a "necessary luxury" by creating "a permanent emotional attachment to have o ne. That 's how you get people to part with cash . There is a spo t in the brain that confuses love and money." If everyone else has a diamond ring, she continues, "then I better get a diamond ring. If someone has a bigger diamond ring than me, I need to get a bigger diamond ring. That's the prime mover for a lot of people buying j ewelry - keeping up, fitting in, because these jewels are signifi ers. They say you belong to a certain class. It's not about individual taste in the arts, it's about what you think the jewels are telling people about you."

When it comes to want ~~~~~~;~~::-----~~~:~~~~~~~--_J and desire, everyone wants the sam e thing, Raden goes on to say. " First and foremost you want safety and security for yourself and your children . But once yo u ge t past the basics, everyone wants something shiny. Everyone wants to compete and compare. It's normal and somehow comforting to know that people who I don't know, who have a very different culture, aren't that different in this respect."

PUTTING A VALUE ON THINGS "My ultimate takeaway is there's no reality to what

is real," sums up Raden . Whether it 's glass b eads being the most valuable thing someone's ever seen, as when the Dutch gave them in trade to the Lenape Indians for Manhattan , or a ring made from bort that a dictator thought was precious because he was told that it was worth millions,"sc much of it is smoke and

mirrors . And ye t, it 's also human, th e way we imbue things with meaning and value based on our circumstances . And it doesn't matter because we're all in it together. It's less interesting how colored gemstones form, whether in the ground or a lab, but how they form in a human mind, how they come to take on meaning and take on value." Ajewel's real value and purpose, Raden says, is one and the same, as its "only actual ftulction is to reflect our values back to us and show us who we are and what we "vill do to get it, what will we do when we have it. Although the value is imaginary, the imaginary value is powerful and can be real if we all believe it together, whether it's engagement rings or glass beads." ..


BEST USE OF COWR Bella C ampbell CampbelliaN

STYLE

~!!s:r: OF SHOW & FIRST PLACE CARVING Allen Kleiman A. Kleiman & Co. Suite of Paraiba tourmal ine, 58.07 tota I-carat-weight, Nauti lus shell carvings.

By AMBER MICHELLE

olor is one of the best ways to express your personality. Combine colored gemstones in unique jewelry designs and you've got a winner. That's exac tly what happened at th e

32nd edition of the American Gem Trade Association (AGTA) SpectnunAwards™ competition, where colored gems were showcased

in innovative designs. The judging for the competition took place in N ew York City, where RonaldWArends,Aires Jewelers; Stephen M.Avery,

Stephen M. Avery, Inc.; Deirdre Feath erstone, Fea therstone D esign ; Lauren Kulchinksy-Levison, Mayfair Rocks and Aton Suna, Suna Bros., gathered to evaluate the 492 entries. At the same time, the C utting Edge

Awards, which recognize excellence and creativity in lapidary work, were also being assessed. Once the winners were announced, the j ewelry

and gemstones were displayed during an editor's event to promote colored gemstone jewelry to the media, stylists and other

style influencers.

Slue-green tourmaline, emera ld and la-k.arat yellow gold earrings.

BEST USE OF PLATINUM & COWR Andrew C osten, CosteN C atba/lle Green t ourmaline, indicolite tourmaline, rubellite tourmaline, yellow zircon, diamond and plat inum ·Symphony of Colour· brace let.


BEST USE OF SILVER & COLOR William Travis Kukovich William Travu j nvelry Brown diamond, diamond, mixed gold and oxidized §ll .... er pendant.

BEST USE OF PEARLS Naomi Sarna Naomi Sama Desig1ls Freshwater baroque cultured pearl, diamond and l8-karat white gold necklace.

EDITORS CHOICE Eclat Jewels Eclat j ewds Inc. Aquamarine. dlamond,enamel and 18·karat yellow gold cuff.

FAsmON FORWARD Brian Cook Nalllrt's Goomary Quartz, Paraiba tourmaline, hauyn, ruby, spesyrtite garnet, golden rutilated quartz, fire agate beads and 24-karat yellow gold ·Wheel of Light· numinous pendant.


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FIRST PLACE Tony Nemyer Grimbil/l Jewelers Purple spinel, diamond, platinum and 1S-karatyellowgold ring.

FIRST PLACE

SECOND PLACE Laurence Bruyninckx Laure/ICc B ruynillckx Slue topaz, mint tourmaline, diamond and la-karat white gold earrings with interchangeable dangles .

SECOND PLACE Ricardo Basta E. Eichberg, l lU. Rubellite tourmaline, diamond, ruby and l8-karat rose gold ring.

C laudia Kretchmer Somewhere in the Rainbow Color-shift blue zircon, diamond, platinum and 24-karat crystallized gold MRock Star2M pendant.

FIRST PLACE Brent Malgarin Elegmlt Gems, Ltd.

SECOND PLACE Lindsay J an e Ambassador Gen,S

THIRD PLACE Caroline C hartouni C(Jrolille C

GEM DIVA Erica Courtney Erica Courtney, Inc. Slue sapphire, diamond and platinum ·Champagne Bubble" wedding ring set.

?araiba tourmaline, diamond and la-karat white gold earrings.

THIRD PLACE Randy Coffi Somewhere ill the Rainbow Skolor tourmaline, Paraiba tourmaline, pink. sapphire, diamond and platinum ring.

THIRD PLACE Gil Gil Int'/ Alexandrite, diamond and platinum ring.

GEM DIVA Lisa Linhardt Linhardt Design Yellow sapphire and oxidized sterling silver MTempest" sculptural duster ring.

GEM DIVA N aomi Sarna

Slue zircon, pearl, diamond and platinum necklace.

f'adparadscha sapphire, orange and pink sapphire, diamond and platinum ring.

Naomi Sarna Desig1lS White, yellow, pink, brown and green diamond, multicolored sapphire, amethyst and l8-karat white gold petal brooch.


MANUFACTURING HONORS Michael Jakubowski Gem Fanatic U.nheated pink sapphire, white and pink diamond, l4-karat white and rose gold ring.

HONORABLE MENTION Alexia Connellan Alexia COlllleila" Luxury Jewelry Purple-pink tourmaline, purple sapphire, diamond and la-karat rose gold "Victoria" bracelet.

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HONORABLE MENTION Josette Patterson Mark Pattersoll Rubellite tourmaline, diamond and l8-karat white gold "Aura" earrings.

PLATINUM HONORS Kathy Kinev Jewel Creations, flu . Slue zircon, diamond and platinum "Chartres" ring.

PLATINUM INNOVATION Michael Endlich Pave Fine Jewelry Lavender 5apphire, diamond and platinum "Sweetness· ring.

SAVOR SILVER Hisano Shepherd little It SI.iced Tahitian baroque pearl, black diamond and sterling silver cufflinks.

MANUFACTURING HONORS Troels D. Larsen Truels D. LArsen Tewelry Tanzanite, diamondand l8-karat yellow and white gold necklace.

PLATINUM HONORS Wick & Greene Jewelers Wick & Greelle Jewelers Unheated blue sapphire and platinum fleur-de- lis pendantJpin.

PLATINUM HONORS Eddie Sakamoto Somewhere ill the Raillbow Tanzanite, diamond and platinum "Ice-Ice Baby" bracelet.

SAVOR SILVER Priyanka Murthy ARYAESHA Slue topaz, diamond and sterling silver ring.

PLATINUM INNOVATION Lorenzo Chavez Geogem-USA Black jade, 5apphire, diamond, platinum and la-karat yellow gold "Big Sky" pendant.

SAVOR SILVER William Travis Kukovich William Travis Jewelry f>rehnite, l8-karat yellow gold and oxidized silver ring.


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FIRST PLACE Ricardo Basta E. Eichberg, Inc. Carnelian, tsavorite garnet, diamond and l8-karat yellow gold "Enchanted Frog" ring.

HONORABLE MENTION Heath London

SECOND PLACE Heath London

• • , Heath LondoN Jewelry Rock crystal quartz, rubell ite tourmaline, diamond and la-karat gold earrings.

THIRD PLACE Kim Hurlbert-$arosi Sarosi by Timeless Gems Imperia l topaz, diamond and l8-karat yellow gold ring.

GEM DIVA Gurmit Kaur Campbell, SRW South Sea cultured pearl, diamond and l8-karat yellow gold "Betwixt and Between" ring.

PLATINUM INNOVATION Heena Chhcda-Shah VALANI Blue sapphire, diamond and platinum "Rival" ring.

Heath London Jewelry ?araiba tourmaline, p ink tourmaline, diamond and l8-karat yellow gold "Rajasthani Dreams·

MANUFACI'URING HONORS PLATINUM HONORS Michael Endlich

SAVOR SILVER Elizabeth Garvin Eliz abeth Can,ill Pille Aquamarine, heliodor, l8-karat yellow gold and oxidized sterling silver ·Cyclone" cuff.

Stuller, Inc. Stuller, l,u.

Pave Pille Jewelry Moonstone, diamond and platinum "Moon Beam" ring.

earrings. Topaz and platinum ring.

FIRST PLACE Mark Schneider Mark Schlleider D esigll Peridot, spessartite garnet, tsavor ite garnet, white diamond, yellow diamond, platinum and l8-karat yellow gold ring.


FIRST PLACE Ziad Noshie Almaza jewelers Mother-of-pearl, black diamond, white diamond, tsavorite garnet, l8-karat rose gold, 18-karat white gold and silver "Hanging Panda. "

THIRD PLACE Mark Schneider

SECOND PLACE Ralph Wobito Wobito Gems, Ltd. Colorless topaz and diaspore perfume bottle.

SECOND PLACE Llyn L. Strelau Jewels by Desigll Black onyx, rock crystal, black and Mark Schlleider Design

MANUFACTURING HONORS Craig Slavens

white South Sea kesh i pearls, diamond, l8-karat yellow and 19-karat white gold · Paddle Your Own Canoe" reversible cufflinks.

PLATINUM HONORS David Hines Nvir B/flIuhe Alexandrite, l 8-ka rat white gold and platinum "Cobra" ring.

Fire opal, tsavorite garnet, colored diamond, white diamond and sterling silver ring.

Studio 247 Pinejewe/ry Unheated Sri Lankan color-change violet-blue sapphire, diamond, l8-karat yellow gold and platinum ring.

SAVOR SILVER William Travis Kukovich William Travis jewelry Golden sheen sapphire, 18-karat yellow gold, l8-karat rose gold and oxidized silver ring.

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FIRST PLACE Joseph Ambalu Amba Gem Corp. 8.06-<arat unheated blue Burme~e sapphire.

SECOND PLACE David Nassi 100% Natllral, Ud. 22.73-carat unheated Sri Lankan yellow ~apphire ..

THIRD PLACE Sailesh Lalli Sparkles and Colors USA, fnc. 1 :l.28-carat unheated Burmese royal blue ~apphire.

FIRST PLACE John Dyer Johll Dyer & Co. 21.96-carat multifaceted cu~hion-cut imperia l topaz.

SECOND PLACE Hemant Phophaliya A G Color, bu. 40.58-carat checkerboard tanzan ite.

THIRD PLACE Darrell Jang Darrell Jang 42 .39-carat cut-corner octagon tourmaline.

FIRST PLACE Allen Kleiman A. Kleiman & Co. ?air of unheated oval Madagascar morganite.

SECOND PLACE Mikola Kukharuk Nomad's Suite of vintage pear-cut grossular mint garnet, 50.26 total carat weight.

THIRD PLACE Ajay Bansal Best in GeIIrs ?air of matched pear-shaped cabochon opals. 84.63 total carat weight.

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SECOND PLACE Glenn Lehrer Lehrer Designs, Inc. 48.86-caratopa l "Soul Angel" carving.

THIRD PLACE Rodney Rahmani Brilliant Stars 67.11-carat unheated blue Burmese sapphire carving.

HONORABLE MENTION Glenn Lehrer Lehrer Designs, Inc. 53. 57-carat tran~pa rent gem ~ilica chrysocolla "Georgia's Dream" carving.

FIRST PLACE Dalan Hargrave Srmstone Butte Milring 63.63-carat sunstone "Cele~tial City" carving.

SECOND PLACE Dalan Hargrave B. Hmju 22.45-carat herringbone cut tourmaline.

THIRD PLACE John Dyer Johll Dyer & C o. 120.98-carat tanzanite "New Era" cut with inverse facets.

FIRST PLACE Robert Shapiro Robert Shapiro 14.29-carat oval black o pal.

SECOND PLACE Sailesh Lalli Sparkles and Colors USA, Inc. 14.93-carat moonstone.

THIRD PLACE Steve Wallner Westview Gems 5.29-<arat green-blue colo r-~hift sapphire.


DESIGNERlines by A IIIber Michelle

he extraordinary jewelry of Hong Kong-based des igner

Wallace Chan is captured in a new book, H:allace Chan: Dream Light Water, which he

penned with jewelry historian and gemologi~t .... _ ..... ' Juliet de La Rochefoucauld. Publi shed by

Rizzoli New York, the book features Chan's most intricate and technically challenging creations. All of the jewelry in the 380-page tome is showcased through detailed photography that accentuates the precious materials, innovative techniques and vision of Chan . Wallace Chan: Dream Light Water is a limited edition of 2,000 individually numbered copies.

Chan shares his design philosophy and creative influences with Rapaport Maga z ine Editor-in-Chief Amber Michelle.

Why did you decide to write a book? Books are precious to me. They are the embodiment

of memories and knowledge, a medium to pass on the human heritage. With this book, I wish to show jewelry art in a different perspective. It took many years to discover the right style of photography for my pieces.The dose-up images in tilis book reveal tile detail .. of craftsmanship that we normally cannot see with the eye. I want to show tile complexity of each piece of jewelry tillOugh the lens .

What j,ifIuences your jewelry desig ns? Love and life influence me and my work. Every day

Above: Stilled Life depicts a cicada comprised of wafer-thin carved imperial jadeite using a technique invented and patented by Chan. Yellow diamonds, rubies, lavender jade and gold add detail to the cicada.


I greet the world with an open heart; I absorb knowledge and experiences like a sponge. I feel that I am a newborn every morning, always curious. Buddhists say, "There is no gate to wisdom, love is the only way." I love all things in the universe, a cup, a plant. If you love it tenderly, listen to

the stories it tells, you naturally feel inspired all the time.

JVI,at are ti,e elements that make goodjewelry desig n? There is no good or bad in art, only personal preferences.

·When it comes to jewelry, ergonoI1lics is a crucial element. If you make an earring that hurts the ear, or a necklace that burdeIL" the neck, you fail. Jewelry is meant to be worn, it must be comfortable. A good piece of jewelry should be friendly to the human body.That is why I spent eight years researching and experimenting with titanium. It is a bio-friendly metal and five times lighter than gold .

You Iw ld afew p atents. H ow do you come up Wi tll these innovative jewelry-making techniques?

My desire to create is a driving force to my desire to innovate. I have ideas that I want to realize, but the idea. .. cannot be realized without certain tools, materials or techniques and that is when I need to innovate. Innovations help me pass through barriers I encounter on my path.

U'hat do diamonds brillg to tile desig n of a p iece ofjervelry? We celebrate the symbolism of diamond .. - eternity,

power and glamour. 1 often juxtapose diamond .. with jade to play with the contrasting characteristics of the t\Vo. lt helps bring out my universal view tiut all is one and one is all.A .. a creator, it is important not to be bia.<;ed.1 appreciate all kinds of materials as long as they are able to convey the spirit of my work. +

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