JEWELLERY EDITORIAL

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2015/05/22

It appeared in the New York Times and it included quotes by Philippe Mellier, the chief executive of De Beers. Therefore it became quite the topic on social media with US industry “experts” jumping in to comment. 

However, judging from their comments—ranging from applauding an e-commerce solution for a single boutique luxury retailer to another pity party over younger consumers choosing electronics over jewellery—it’s pretty clear they didn’t read the story. 

Mellier was specifically talking about the diamond industry in the story, which for the past 100 years operated like no other industry on this planet. It received easy bank financing without revealing its financials. It received the money despite selling a product whose value is based largely on documents with methodology as subjective as they are objective, and the exceptional marketing and advertising campaigns by De Beers. And it received funding despite conducting business largely without oversight.

Now with the post-recession economy and new government oversight banks are scrutinizing these businesses the same as they would any other business. They are finding that investing in the diamond industry isn’t a good thing, according to the article, except for those “good companies that are transparent and profitable and are bankable,” Erik Jens, chief executive of diamond and jewellery clients at ABN Amro, said in the story.

De Beers also has tightened the financial requirements for its sightholders. 

Mellier and De Beers recognize that “The tension is not coming from demand, which is still growing…. It is coming from the change in the industry.”

The business model has to change, not only because of bank lending, but to be more flexible and quicker to adjust to the marketplace—whether it’s fashion trends, sudden supply-side changes or even geopolitical tensions. 

De Beers recognizes this largely because it has to. It is no longer the independent entity that feeds the diamond and jewellery industry with products and marketing. It is now a very small part of a large corporate operation. Its first priority is to its corporate leadership and shareholders. That’s why in many ways De Beers is competing with the industry by launching its own branded retail stores and diamond jewellery brand; and refusing to lower prices for its sights. 

But sometimes even De Beers can be its own worst enemy. In the “Executive Summary” of its 2014 Diamond Insights Reports, it sees the top priority for the diamond industry as, “safeguarding and nurturing the diamond dream—that is, the allure that diamonds have for consumers, based on their association with romance and a sense of the eternal, and the fact that they are seen as a lasting source of value.”

The flipside of this is that it also means maintaining the veil over the not so romantic aspects of the diamond industry. In this changing world, nothing has changed so dramatically as the instantaneous way information is spread across the globe. Bad news about the diamond industry will get to people. De Beers and the rest of the diamond industry don’t have a way to respond. 

 


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2015/05/20

The diamond industry took another blow with the release of GIA’s Laboratory Alert concerning close to 500 diamonds recently submitted with an undisclosed, temporary treatment that improves the colour by as much as 3 grades. Four companies have been blocked from further submissions pending research and investigation. The troubling part is the fact that the treatments went undetected and GIA admits they still have not identified the treatment process. Apparently, the treatment was only discovered when the diamonds later changed colour to lower grades.
 

This raises several questions in my mind. First and foremost: are there other unknown treatments that have slipped past the GIA screening process? Could there be treatments that have not been detected? So far this news seems to have only been released to the trade. What will happen when the public becomes aware of this? Recent news stories about over grading by EGL International and other labs have already shaken consumer confidence in the diamond grading process. Now we have a treatment that even has GIA stumped. If those of us in the trade can’t trust GIA to deliver consistent, accurate reports will consumers be able to trust any lab?

 

Undisclosed treatments are only the tip of the iceberg.

New techniques are being developed all the time. Labs can only play catch-up to advancing technology. The profit motive for keeping new treatments secret will insure that the labs will be the last to know. In the current case, if the treatment was permanent we might never know of its existence. A few tweaks to that unknown process could make that a reality. By the time the labs discover the treatments and find a way to detect them, the treaters will be moving on to the next process. They will always be one step ahead. This is a problem that will never go away and will, in fact, get much worse. Technology keeps moving and accelerating. New treatments will come more often and be harder to detect.
 

There is nothing wrong with embracing and using treatments as long as they are properly disclosed. But there is a disturbing trend of dealers attempting to pass off treated stones as natural or mixing lab-grown stones in parcels of mined diamonds. This lack of ethics only seems to occur within in the natural diamond supply stream while the producers of lab-grown stones disclose their goods with pride. This lack of ethics will only serve to further erode the already dwindling trust consumers have for the mined diamond industry.
 

I’ve said for several years there will be a time where treatments and lab grown diamonds will be undetectable from natural, untreated stones. It appears we are approaching that point sooner rather than later. The future has arrived and we will need to learn how to deal with it.

 


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2015/05/20

Chains are one of the oldest and most loved pieces of jewellery, and have been worn in many guises, often as support to another jewel such as a charm or pendant. Right now the humble chain is very much in vogue, and is playing a starring role in new designs.
 

While there are many different variations of chain in jewellery design, the one of most of interest to us for this trend is curb-link chain, created when the links are twisted together and then beaten flat on top. It is a classic look that has in recent times been associated with the heavy gold chains favoured by rappers.
 

For some this association with hip hop and big bling may be off putting when considering a fine jewellery purchase, but for those with a sense of humour and a keen eye for style it is this very ironic charm that is leading us back to the curb link. And there are many new ways to wear it.

 

Chunky chains

Amethyst is beautifully complemented by 18ct rose gold in this ring from the Gocce collection by deGrisogono. ID BRACELETS by Binder, Friedrich GmbH & Co. KG (FBM)
Givenchy has added a beachy twist to
its bracelet with a shark’s tooth charm.
ID bracelet by
Binder, Freidrich GmbH & Co. KG (FBM)


The easiest way to get involved with this trend is to stick true to its original format – a simple, chunky chain. Many jewellery houses are including heavy link chains in collections, most notably with bracelets. Givenchy has tried to lighten the mood with a shark’s tooth charm on its bracelet, while Chloe has added something akin to a branded, oversized bar, and Ann Dexter-Jones has fallen back on that oh-so-classic combination of ID bracelet and heavy curb-link chain, allowing for customisation through engraving.

 

Mixed material

The Black Butterfly necklace by Matthew Williamson weaves a black textile through the links. Stainless Steel Chain Leather Bracelet by Aplus Gem Co
The Black Butterfly necklace
by Matthew Williamson weaves
a black textile through the links
Stainless Steel Chain Leather Bracelet
by Aplus Gem Co


Heavy curb-link chains are very masculine and as this trend is mostly directed at ladies, an easy way to add femininity and colour is to weave in some bright material. Matthew Williamson has kept his Black Butterfly necklace muted with black fabric interwoven with the links, while Ben-Amun has created a vibrant bib necklace decorated with red thread, faux pearls and other trinkets that has a curb-link chain running through its centre. And in a new twist on the friendship bracelet, Marc by Marc Jacobs has tied a short length of curbed links to a colourful string fastening that truly lifts the chain into summer wear.  

 

Fine jewellery

Le Vian incorporates chain into this rose gold ring set with brown and white diamonds Beautiful Day Bracelet by Regal Jewelry Manufacture Co Ltd
Le Vian incorporates chain into this rose
gold ring set with brown and white diamonds
Beautiful Day Bracelet
by Regal Jewelry Manufacture Co Ltd


This is not just a trend occupying the attentions of the fashion houses; fine jewellery has been taking note too. Roberto Coin has created some spectacularly heavy curb-link chain-style gold rings studded with diamonds in its main collection, while Le Vian runs a diamond and rose gold curb-link chain-inspired design diagonally over a rose gold and brown diamond ring. Mattia Ciello has also created some heavy link chains in rose gold and diamonds, and more interestingly carbon and diamonds.

 

Abstract

These rings from Fifth Season by Roberto Coin have taken curb links as inspiration for a far more angular design Basic bracelet by VOGUE FASHION ACCESSORIES, LTD
These rings from Fifth Season
by Roberto Coin have taken curb links
as inspiration for a far more angular design.
Basic bracelet
by VOGUE FASHION ACCESSORIES, LTD


As well as the faithful reproductions of this jewellery-box staple, some designers have taken a more abstract approach. David Webb has used hammered gold nails in place or traditional links in his bracelet design, while Roberto Coin’s fashion-forward diffusion line Fifth Season has created a range that features what appears to be curb links but stretched and pointed beyond their normal proportions.

 


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2015/05/19

After assuming power in May 2014, India’s Narendra Modi government at the end of its power of one year appears firm in restricting imports of gold to keep Current Account Deficit (CAD) under control and at the same time ensuring the required supply of gold for smooth operations of the jewellery industry.
 

As against prevailing feelings amongst some jewelers, the Indian government has never seen gold with a negative mindset. The 80:20 scheme under which 20% of imported gold had to be exported back, has been withdrawn. On the other hand, banks have been permitted to provide gold metal loans to jewelers. But some jewelers here feel that banks still hold negative approach towards the sector which should be changed. The gem and jewellery sector is still considered by them as a high-risk segment.
 

India’s Finance Ministry has recently proposed two schemes, which are aimed at mobilizing the enormous amount (about 24,000 tons) of gold held by the Indian households and rich temple trusts. The said two schemes are Gold Monetization Scheme (GMS) and Gold Sovereign Bonds (GSB) which were proposed in the recent Budget and are being finalized now.

 

Indian Government has set eyes on household gold

Indian Government has set eyes on household gold

 

The Bonds are aimed at giving gold returns without buying physical gold, while the GMS is aimed to mobilize gold for productive purposes and also to give good returns to those who hold it. Both the schemes would also offer interest rates over and above gold price returns. According to an estimate, about 24,000 tons of gold (valued at

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trillion), which is half of the size of the Indian economy, is lying idle with consumers here. The schemes if successful can reduce the need to import gold without imposing any controls over the yellow metal.
 

A damaged bangle or broken chain lying idle in a consumer’s bank locker would help him earn 2 to3% interest under the proposed GMS. This scheme will be a major improvement over 1% interest being paid for deposits up to five years.
 

Industry sources say that India is also looking at the possibility of reducing the minimum gold deposit amount from 500 grams to around 50 grams to enable those having gold to actually make use of the scheme as the existing floor is supposed to be very high. Besides, the government is also studying the possibility of reducing the minimum deposit period from the existing three years as there is a sensitivity that individuals would want to test the scheme by depositing the precious metal for a shorter duration.
 

When the Gold Deposit Scheme was introduced in 1999 by the earlier government, the target was to mop up around 100 tons of gold but the goal is yet to be achieved despite the plan undergoing some changes, resulting in a marginal increase in rates on offer.
 

But the new scheme is expected to greater participation from the private sector with the government likely to encourage more banks to participate. Those individuals or trusts opting for the scheme can take their gold to a purity verification centre, which will then issue a certificate that banks would accept. The banks will then open a metal account for someone depositing gold, while the gold will be sent for melting.
 

However, the Indian government has still retained 10% duty on import of gold and has mobilized $3.4 billion as import duty during 2014-15. This is said to have led to smuggling and encouraging unaccounted market. But a process of reorganizing India’s gold and jewellery industry has been initiated by the government which is largely appreciated by the industry circles here.

 


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2015/05/19

In a move I’ve never seen before, the Gemological Institute of America issued a “laboratory alert,” where it actually named those involved with misrepresenting their gems. In this case approximately 500 diamonds colorless to near colorless diamonds submitted primarily to the GIA lab in Israel “were subjected to an undisclosed temporary treatment.”
 

GIA said it believes the treatment temporarily masks the inherent color of the diamond. The color difference can be as much as three grades. GIA hasn’t been able to identify the treatment process,
 

GIA not only identified approximately 425 diamonds but it named the companies and individuals who submitted the stones. In addition, the organization made it public that they banned these companies and individuals from submitting gems to their labs.

 

The Rapaport Group immediately followed suit with a statement saying that it and RapNet has “suspended service” to the companies and individuals, “pending further investigation”. RapNet has also delisted all diamonds with recalled grading reports and is contacting those listing such stones for sale.
 

The companies identified by GIA are LYE Diamonds, E.G.S.D. Diamonds, Abramov Romok and Yair Matatov; Individuals associated with these companies are Nati Yizrov, Gavriel Yelizarov and Yair Matatov.
 

The diamond industry is a very politically astute and organizations that represent the industry immediately sent out the obligatory press releases condemning the alleged deception.
 

The Israel Diamond Exchange called an “extraordinary meeting” of its board of directors where it issued a statement expressing its “indignation and resentment” and vowing to “identify the suspects” and “to take the needed measures,” which were not described.
 

On the other hand, Ernie Blom, president of the World Federation of Diamond Bourses, gave a forceful statement.
 

“I am extremely concerned by this development,” Blom said. “This is clearly unlawful behavior. We will have no tolerance whatsoever for this type of alleged illegal activity.
 

“It is crucial that this kind of unlawful action is stamped out. We are pleased that the GIA publicized this development so that diamantaires can be on their guard … Our industry must come together to counter such activity, both for the good of our members and for the end-consumer who is always uppermost in our minds”
 

The GIA taking the extra step to publicly identify the culprits (even to consumers who use the GIA website) is much-needed change in the industry handles these type of events, which is usually hiding behind a wall of silence.
 

It’s the type of change the industry needs if wants to continue to win consumers’ trust.
 

For the diamond industry’s sake, hopefully, this will be part of a regular practice and not just a one-time development.

 

 


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