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Two of the largest jewellery retailers in the US both reported solid sales growth in the third quarter, another sign that the improvement in the US economy is growing in all market segments.


Signet Jewelers, the largest specialty retail jeweller in the US, UK and Canada, said Tuesday that its largest US division, Sterling Jewelers, reported that third quarter sales increased 9.7 percent to $692.8 million. Same store sales for the division increased 6.8 percent. The Sterling division operates approximately 1,500 stores primarily under the Kay Jewelers and Jared the Galleria of Jewelry chain brands.


Signet completed its acquisition of its main rival in the US, Zale Corp, in May. This added another $331.4 million to Signet’s third quarter bottom line. However, the struggling chain jeweller, which has approximately 1,600 stores in the US and Canada, saw same-store sales fall 0.9 percent. This along with $11.5 million in adjustments related to the Zale acquisition resulted in a third-quarter net loss of

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.3 million for Signet.


Total third quarter sales for Signet were

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.18 billion, which includes the company’s UK division, with approximately 500 stores.


Mark Light, the newly appointed CEO of Signet, said he is pleased with the results.

“We delivered a solid third quarter highlighted by continued strength in same store sales, which rose 4.2 percent, led by Kay at 7.5 percent and Jared at 6.5 percent,” he said. “While Zale same store sales declined 0.9 percent, we remain pleased with the Zale division integration progress. In the short time period since owning Zale, we have been able to implement select initiatives to further the Zale holiday business.”


In addition, Signet announced it has entered into a rough diamond supply contract in Botswana with DeBeers.

“The DeBeers sight advances our strategic diamond sourcing efforts to the next level,” Light said. “Following last year’s purchase of a diamond cutting factory in Botswana, we believe, as a sightholder, that we are now far ahead of most industry peers. This provides us greater access to supply in a growing supply-and-demand gap.”


Together with the end of the asset purchase program, another good sign of the US economy improvement?


Meanwhile, Tiffany, the largest luxury jewellery retailer in the US, reported double-digit third quarter sales growth in the US, its best performer for the period.


The international jeweller said total sales in the Americas (which consists primarily of US sales) increased 10 percent to $459 million in the third quarter and 9 percent to

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.38 billion in the year-to-date. On a constant-exchange-rate basis, total sales increased 11 percent and 10 percent in the third quarter and year-to-date, respectively, due to geographically-broad-based growth across the region, the company said. Same store sales rose 11 percent and 9 percent in the respective periods.


Worldwide net sales rose 5 percent to $960 million. On a constant-exchange-rate basis, excluding the effect of translating foreign-currency-denominated sales into U.S. dollars, worldwide net sales rose 7 percent due to growth in all regions except Japan, with the largest growth in the fashion jewellery category. Same store sales rose 4 percent.



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The drama over grading standards keeps getting more interesting. It started with Rapnet dropping all EGLI (EGL International) reports from their database. Polygon’s Certnet quickly followed Rapnet’s lead. EGL USA was rightfully indignant in their response. EGLI proclaims there is no single, international standard for diamond grading. Last week’s commentary from Martin Rappaport ignited heated debates on virtually every industry forum.


Last week Ernie Blom, President of the World Federation of Diamond Bourses posted his viewpoint (Open letter regarding over grading certification | 19 Nov 2014) of the issues of grading standards. Now we have the Jewellers Association of Australia (JAA) announcing their list of six accepted grading labs. And to top it all off, EGLUS announced the imminent launch of their own diamond trading platform to go head-to-head with Rapnet for a share of the diamond market itself.


The most creative playwright in the world could not make this stuff up. It has all of the elements of high theatre...wealthy, powerful players battling for dominance in philosophy and market share of one of the planet’s most treasured, romantic, and sexy luxury items. Vast fortunes are at stake. They must be protected or be lost. The fate of the consumer’s hard earned money rests in the hands of these few controllers of this multi-billion dollar industry.

But this is not a movie. It is a reality show. And like most of the popular reality shows on television it lacks one thing...reality itself. Or in the case of the jewellery industry, it is the refusal to see the reality. It does not matter if diamond bourses, both virtual and physical, declare one lab as a standard or refuse to accept other labs. It does not matter who stands in righteous indignation over the lack of ethics in our industry.


As long as we try to stick to grading as we know it, we will never fix this mess. There are millions of reports already out on the market from various labs, including so-called “accepted” labs all using GIA terminology. Very few of them will ever agree on grading standards or even come close. Those existing reports are not going to suddenly disappear. The labs that provide them will still find market share. Sellers at the retail level that regularly use them will not stop. They like the profits that come with them. Some of these retailers have little or no training and legitimately don’t know any better while others simply don’t care or are deliberate in their actions.


Martin Rappaport was almost right when he said that over grading by labs using GIA terminology is a threat to the industry. It is no longer a threat, it is a reality. It has successfully rendered the GIA grading system meaningless. We can’t go back. It is too late. Its value has been broken beyond repair. It is time to start over.


But good drama should have a happy conclusion. The diamond industry will eventually figure something out. It may take a decade or two, it will get there.


(Spoiler alert) In the end, it is the consumer that wins. By the time the diamond industry gets its act together and creates a practical and enforceable grading system, the lab grown diamond industry will take advantage of the chaos and create its own, simplified, easy to understand way of classifying and pricing their goods; capturing the lion’s share of the engagement and fashion markets.



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Gold crazy Indian consumers have been watching these days a tough tug-of-war between domestic jewellery industry and the government.


As we have mentioned in some of our Blogposts here that gold is on No. 2 position after crude oil for which the Indian government has to pay heavily in terms of foreign exchange for its import. This has led to widening of India’s Current Account Deficit (CAD). Oil being a necessity, the government has to import it at any cost but gold is not a necessity. On the contrary, it is an ‘unproductive’ commodity, so the government has introduced stringent and restrictive measures on the yellow metal’s import before a year or so.


The measures (we have already discussed about them earlier) certainly brought some solace to the government which was able to control the CAD to a desirable level. But the industry people were certainly not happy with the ‘destructive’ measures as they (measures) drastically brought down the gold imports which activated smuggling and rendered thousands of artisans jobless. So the government was happy but not the industry people.

A ‘Tug of War’ between Indian Government and jewellery industry


But the situation has now turned in favour of the industry after it had a good Diwali and festive season jewellery sales which were up by 15% to 20% in various parts of India in comparison with 2013. According to World Gold Council (WGC), jewellery demand in India saw a 60% year-on-year increase to 183 tonnes during the third quarter of 2014. According to the latest figures, India’s October 2014 imports of gold have reached to 148 tons which indicate six-fold increase from less than 25 tons in the same month of 2013. Imports in the September quarter were up by 39%.


This has once again disturbed the government greatly. Top officials of India’s Finance Ministry and the Reserve Bank (RBI) had met recently to consider tightening import controls on gold. But the meeting has remained inconclusive and they have agreed to meet again in a few days to take a decision, official sources say.


Industry leaders on the other hand are once again preparing to oppose strongly any move by the government to introduce more curbs on the gold imports. All India Gems & Jewellery Trade Federation (GJF), the apex body of jewellery retailers feels any further curbs would spell doom for India’s gem and jewellery sector.


Chairman of the GJF Mr. Harish Soni says,

"The recent increase in gold imports may seem very high because the base of gold imports in September-October 2013 was low, but this comparison cannot be used to impose further curbs. The high import was stimulated by advance buying prior to festive season and anticipation of new restrictions on gold imports as indicated by the government."


Mr. Prithviraj Kothari, Executive Director of India Bullion & Jewellers Association (IBJA) says,

"The government should find out other options to control the CAD. Gold today has become more a currency than a commodity and increasing the (import) duty would only encourage smuggling and new curbs would further impact availability. I feel the government should encourage Gold deposit scheme."


Mr. Vipul Shah, Chairman, Gem & Jewellery Export Promotion Council (GJEPC) remains neutral as long as exporters are not disturbed. “The government is no doubt keen to curb domestic consumption," he adds.


But if the government is determined to control the widening CAD, it would surely introduce some measures soon which may once again prove to be ‘unfavorable’ for the industry.



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In an article titled: “Honest Grading The truth, the whole truth and nothing but the truth,” Martin Rappaport once again lashes out at EGL International and the problem of overstated diamond grading reports. He brings up valid points on the effect to our industry of applying common terminology with varying standards. I share his dream of cleaning up the fetid mess we see in the market. But is it possible?


GIA created the terminology for communicating diamond qualities using D-Z for colour and FL-I3 for clarity. They apply their own standards to the use of the system and produce diamond grading reports. GIA never patented, trademarked, copyrighted, or set into place any formal protection to the terminology leaving it open to interpretation. EGLI is correct, there is no international standard. The market may have determined that GIA reports bring a higher price and therefore may be considered as a standard but that is just common usage and has little legal weight.


We could even call into question the use of GIA as an industry standard. A standard should be consistent at all levels. GIA labs are usually consistent but most people in the diamond business have at some point resubmitted stones to different GIA labs hoping for and getting a better grade.


GIA is also the most recognized name for gemmological education. They teach the GIA nomenclature and standards. Unfortunately the standards they teach are not the same standards used by their lab. They teach an eye-visible inclusion should be an I1 but might reach as high as SI1. Yet there are plenty of examples of GIA reports with eye-visible inclusions up to VS1, mostly on larger stones. That can be an expensive inconsistency for someone relying on their GIA training to grade a stone for sale.


Even if GIA was perfect and consistent, getting everyone to adhere to GIA standards would be nice...but impossible. That genie will never go back in the bottle. It’s too late. There is too much junk paper already on the streets using GIA terminology. We can’t wave a wand and make it go away.


We need to start over with three basic requirements:
Consistency, Precision, and Accountability.


Consistency and Precision can both be handled through technology. We need properly calibrated grading devices that are able to deliver precise numerical results. These should be the same every time on any unit. Numerical grading will eliminate the problem of grading ranges; getting rid of one of the hidden fudge factors found even in the most honest grading where a “High G” will sell for a bit more than a “Low G.”


Precise, repeatable grading leads to precise and consistent pricing. Without that precision we can forget about a diamond ever being a commodity.


But none of this will work without the one thing that is sorely lacking in the diamond grading industry: Accountability. We simply don’t have it. Every level of the industry relies on lab reports to make important financial decisions. Though the reputation of a jeweller or diamantaire may ride on these reports, not one single lab will stand behind their grades. Every lab, including GIA, has a disclosure paragraph stating that this is only an opinion and the lab holds no responsibility for anything...even errors. They hold their own customers responsible for the lab’s mistakes. The lab screws up, the diamond seller gets sued.


Don’t blame one lab for misuse. Blame all of the labs for cowardly hiding behind fine print and not having the courage to stand behind their grades. Until a lab comes forward that can eliminate subjectivity, produce precise repeatable results backed by the willingness to guarantee their reports ...we will never end the problem of misuse of grading.


Without accountability, Mr. Rappaport’s dream is sadly impossible.



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David Weinberg

Director, Partner at Multicolour Gems Ltd (


The cut is what gives a gemstone  its beauty and brilliance. An ideal cut which reflects all the light in an even pattern without any darkness or windowing is always preferable when rough of a suitable shape and clarity is available. In faceted stones, specific indices and critical angles are what produce the maximum brilliance.


The proportions and angulations for diamonds are well known and an ideally proportioned diamond is always desirable. Diamonds are relatively clean and their natural habit is generally ideal for cutting round brilliants to ideal proportions.


Colored stones are a different story. They are normally not clean and their shapes can be blocky, rounded, angular, tabular, elongated or flat. And, because color is the most important factor affecting their valuation, the color needs to be carefully considered in any kind of decisions concerning the cut.


(Aquamarine weighing 1.40 cts and Spinel weighing 1.46 cts from Tunduru,
Tanzania cut into a fancy lip shape from


Modern faceting equipment makes it relatively easy to cut a colored stone to ideal proportions with the correct critical angles. Faceting diagrams with the angles and indices are readily available and any dedicated hobbyist will be able to cut perfectly proportioned stones in a short time if they are working with inexpensive materials and are not concerned about yield.


However, since color, clarity, and carat weight are at least as important as cut, every colored stone cannot be cut to ideal proportions. Some rough is very flat, some is heavily included, some is dark, and some is light. Dark stones cut to perfect proportions may increase in value because stones always become lighter as their size is reduced. Conversely, light stones can easily lose value when they are cut down because their color will become lighter. Flat stones cut to perfect proportions will yield tiny stones that will be worth less than if they remained flat and windowed. Heavily included stones should be cut en cabochon, and over dark stones may look even better with a window to lighten their body color.


Inexpensive stones can always be ideally cut and the quality of the cut will add value to the stone. With a low value and plenty of availability on the supply side, the final weights and sizes of the less expensive gemstones are not critical.

(Pair of Tanzanian emeralds weighing 3.75 cts cut into a drop shape from


For the rare and expensive gem materials the situation is completely different and the final weights and sizes of the stones are a critical part of their valuation. Valuable gemstones cannot simply be ground to perfect angulations with out the considerations of color, size, weight, and the locations of the inclusions. In many cases the less than ideal cut will be worth more than the same stone cut perfectly because of its larger size.


Native cuts

Native cut is normally a condescending term used to describe poorly proportioned gemstones. The implication is that natives living in the jungle or near the source are unable to cut stones properly. This may or may not be the case but some of these cutters may have a lifetime of expertise and they are well aware of what they are doing. The truth of the matter is, wholesale gemstones prices are based on their price per carat. These cutters sell wholesale to dealers and they want to maximize the weights for their market. They have no market for end users and it would useless for them to cut to ideal proportions and angles because their customers would not pay for the associated increase in price and they would be losing money.


Perhaps a better description would be the “first cut”. The first cut is like a rough draft. And in the case of more expensive materials, they should be cut roughly the first time to get a better idea of their color and the clarity. In fact some of the very people that complain about native cuts are hobbyist cutters/resellers who love to buy them because they can easily foresee what they can achieve by re cutting them. Good cutting is the process of cutting a stone from the rough to the end product and there can be a whole series of cuts in that process. There is absolutely no advantage to cutting a stone perfectly on the first try.


Companies that process quantities of valuable rough incentivize the cutters by paying them per carat. The cutters don’t really care because they are not the owners of the material. However, when they are paid for producing the largest possible stones, they will pay attention and do just that. After that, the finished stones can be re selected for better cutting or calibration or special cuts. There is no other way to control the large scale production of valuable or even relatively valuable gemstone materials. Weight doesn’t really matter for soft and abundant stones like Amethyst, Citrine, and Topaz, but yield is critical for valuable stones like Rubies, Sapphires, Alexandrites, Tsavorites, and Emeralds.

For wholesalers and gemstone manufacturers, a compromise between weight and ideal proportions is the best solution. Some people want a large flat stone that will look big in the ring but cost less while other customers would prefer a small stone for the same price with perfect proportions and angles. And, as most gemstones are included to some degree there is no simple easy rule for every stone. Many successful wholesalers prefer to offer stones in a nearly finished stage so they still have an option to recut, repolish, reshape, calibrate or to cut perfectly for their intended market. Once the stone is cut and reduced in size, it can never be sized up again. There is no undo button!


As a first step, large and valuable stones like sapphires, rubies, and emeralds are always cut for weight. In small melee sizes, these stones can be precision cut because the rough is less valuable. However, as the sizes and weights of the stones increase, the valuations of the stones become primarily linked to their weight, color, and clarity.


Fancy and precision cuts

These kinds of cuts can look great and may maximize the brilliance. Some of the styles are creative but most are just variations of established cutting patterns. Although, there are some exceptions, the cuts are primarily used for less expensive gemstone materials to add value. When sellers mention “designer cut” or “precision cut” to the description of their product, it adds a great deal of interest but these cuts are rarely applied to valuable materials because conventional cuts are more accepted. Designer cuts of soft stones like Amethyst, Citrine, or crystal Quartz or common stones like Topaz do not add any resale value to them. These gemstones may look great but with a lower hardness or no foreseeable rarity, they will never have any resale value.


Nowadays, customers can choose between perfectly cut smaller stones or larger or even much larger stones for the same price. When asked, many customers will prefer the perfectly cut smaller stones but when its time to actually buy, more will go for the larger stones at the same price. Opinions and tastes will vary and the ability of the cutter is evident in the finished product but size, clarity, and color are at least as important as the cut.


Cutting colored stones is an art. Computer programs can analyze diamond rough and offer the best possible orientation and yield but colored stone cutting is complicated in other ways. Because of the colors, the pleochroism, and the orientation, diamonds rules will not work and perfect ideal cutting is simply uneconomical for many of the more valuable colored stones because their final size is as at least as critical as their cut. The cut is the only gemstone parameter that can be fixed so a less than perfect cut is not the end of the story and it can still be easily rectified by an experienced lapidary.



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