JohnQuixote
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Glad to hear you landed happily Wink. It was a great time and I look forward to reading your thoughts.
Scenes from JCK 2007
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JohnQuixote
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On Monday morning Martin Rapaport gave his annual report on the state of the diamond industry.He is a thoughtful, engaging speaker. This year he challenged trade members in every sector to gain an understanding the dynamic developments that are occurring in today’s world and how they will impact our businesses.
Long term forces are growing Chinese and Indian demand, the state of world currencies and inevitable economic warfare.As we have discussed during Pricescope webinars, Rapaport predicts that the diamond trade is controlling the diamond market less and less as major external economic forces, political priorities and profitability become primary factors influencing the diamond, gem and jewelry sector.
He spoke about the shrinking power of DeBeers and the globalization of demand, noting that open markets with increased competition are good for the industry.He cited the Internet and the transparency it brings as important issues everyone must accept and adapt to, as well as the continuing presence of synthetics and treatments.
Reinforcing some of the sentiments from Garry Holloway’s internet-focused session, Rapaport noted that today’s consumers are well educated and are doing research online where they can immediately find price lists and comparables.It’s logical to predict that this trend will grow.To survive, he said, retailers must add value.The value of a nice showroom, signage and attractive salespeople no longer cuts it.You must find your value niche and use it.He challenged the retailers in the room with a key question:“What is the value of your added value?”
“If all you’re doing is flipping diamonds you should be flipping hamburgers.”[/i]
Long term forces are growing Chinese and Indian demand, the state of world currencies and inevitable economic warfare.As we have discussed during Pricescope webinars, Rapaport predicts that the diamond trade is controlling the diamond market less and less as major external economic forces, political priorities and profitability become primary factors influencing the diamond, gem and jewelry sector.
He spoke about the shrinking power of DeBeers and the globalization of demand, noting that open markets with increased competition are good for the industry.He cited the Internet and the transparency it brings as important issues everyone must accept and adapt to, as well as the continuing presence of synthetics and treatments.
Reinforcing some of the sentiments from Garry Holloway’s internet-focused session, Rapaport noted that today’s consumers are well educated and are doing research online where they can immediately find price lists and comparables.It’s logical to predict that this trend will grow.To survive, he said, retailers must add value.The value of a nice showroom, signage and attractive salespeople no longer cuts it.You must find your value niche and use it.He challenged the retailers in the room with a key question:“What is the value of your added value?”
“If all you’re doing is flipping diamonds you should be flipping hamburgers.”[/i]
JohnQuixote
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JohnQuixote
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That’s pretty much the substance.I hope my colleagues will add their thoughts, as we all saw slightly different events and have different perspectives on the ones we did see.I took many notes in some of the sessions, particularly Gilbertson and Rapaport, and will try to share comments once I decompress and catch up on work.
Here are some photos just for fun.
It seems that some people can turn a profit doing anything.[/i]
Here are some photos just for fun.
It seems that some people can turn a profit doing anything.[/i]
JohnQuixote
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Paul started with only 80 credits. Can this shift of wealth away from the US be what Rapaport was warning about?
JohnQuixote
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Peter Paul and Mary.
JohnQuixote
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Peter Paul and Gary.
JohnQuixote
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Richard instructed this young lady in the high art of mixing a concave martini.
JohnQuixote
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Wheeling and dealing in Vegas. Coming soon, a new “Elvis” cut?Will it have strong blue suede fluorescence?
JohnQuixote
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Peter Yantzer’s Lamborghini!!
JohnQuixote
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Not really
(though he does have a scintillating Chihuahua).
JohnQuixote
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"While in Vegas..." A few of us checked out the other big show: The WSOP at the Rio.
JohnQuixote
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Lots of activity that Wink can tell you all about...He is poker-educated.
JohnQuixote
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In fact, Wink alone may save the diamond industry by buying out DeBeers, Rio Tinto and anyone else who tried to manhandle him!
Let’s hear it for DeWink![/i]
Let’s hear it for DeWink![/i]
JohnQuixote
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Until next time...
JohnQuixote
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Take care
JohnQuixote
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Travel safely
JohnQuixote
Ideal_Rock
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And may the coming year be a great one for everyone.
JohnQuixote
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Elvis says “Thank you.Thank you very much."
JohnQuixote
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...
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I confess to being a little confused and surprised, there are so few questions of any of us about what happened at the show. I think John was expecting a lively discussion about some of the issues that he brought forth, perhaps we shall have to start separate threads for them to be properly discussed.
One of the things that pleased me immensely was the reception of Garry Holloway''s presentation. When Leonid did a presentation at JCK two years ago the organized protesters were there to say how evil the internet was and why we should all rot in a warm place and how we were destroying the free world as we know it.
This year people were finallly getting it that they have to change to play in today''s world, and the fact that they have a nice show room is no longer enough value added to justify a huge price over the internet vendor. Yes, they might get some additional markup, but not the huge markups of their father''s and their father''s fathers.
After Garry''s presentation this year there were many who came to the front to talk with Garry, with me, with Paul and others about what was going on and how to make it better. Even Martin Rapaport came up and spent ten minutes with Garry. (For those who don''t know Martin, this is incredible, I don''t think he spends more than five minutes on anything, and rarely more than ten seconds, this is one incredibly busy man who is fantastically effective at spending a little time here and a little time there.)
Martin is also a very entertaining speaker, I wish I had a recording of his talk, I would play it often.
At one point in his presentation he digressed to tell a joke about the diamond business, this is much funnier in his wonderful Jewish accent, but imagine that part and enjoy the story.
There was a young man who wanted to follow in his father''s footsteps, he begged his father to be allowed to join the family business. The father fought and fought with him trying to get him to go into a business where he could stilll make money, but alas, the son still wanted to do nothing but be in the jewelry business.
Finally the father relented and said that he would have to agree what ever he was told, and no questions. (Martin repeated this several times with appropriate gestures, it was already quite funny by this point in the story.
The first day the father tells the son to remove all of the stones in one box and line them up, table down, culet up on a wooden chair. The son spent a lot of time doing this, thinking all the time that the father was nuts.
Okay, now take of your pants.
Now, the underwear too!
Now, sit on the diamonds.
The son, true to his word sat on the stones, which was quite painful as all the culets were pointed up into the air. "OUCH!"
Okay, now stand up and tell me what did you learn.
The son was speachless, so the father yelled at him, "DON''T SIT ON THE GOODS!"
One of the biggest problems that Jewelers have is turning the goods too slow. Martin showed us the net markup of Blue Nile and Tiffany''s and Zales, and although Blue Niles is the smallest their stock price is the highest. Why because they have a turn of 24 versus a turn of less than 2 for both Zales and Tiffany''s. ( I may be slightly off in the numbers, this is from memory.)
He also told us that margins are kaput in the diamond industry as we know it today, and showed us that although the gross margin of the retailer is higher than the wholesaler and the miner, that our net is 5% comparred to the 25% of the miner. He admonished all the wholesalers in the room who think they want the higher markups of the retailer to not be stupid and to stay with their 8% net margins. Ouch, that hurt!
China is coming as a major market according to Martin, so be prepared to play in it and don''t be surprised when the dollar is no longer the currency of choice for the sale of rough diamonds, expect to see that be the Euro in the not to distant future according to Mr. Rapaport.
It was a fascinating time and there will be much to think about an much wailing and nashing of teeth if all that Mr. Rapaport predicts becomes fact.
Wink
One of the things that pleased me immensely was the reception of Garry Holloway''s presentation. When Leonid did a presentation at JCK two years ago the organized protesters were there to say how evil the internet was and why we should all rot in a warm place and how we were destroying the free world as we know it.
This year people were finallly getting it that they have to change to play in today''s world, and the fact that they have a nice show room is no longer enough value added to justify a huge price over the internet vendor. Yes, they might get some additional markup, but not the huge markups of their father''s and their father''s fathers.
After Garry''s presentation this year there were many who came to the front to talk with Garry, with me, with Paul and others about what was going on and how to make it better. Even Martin Rapaport came up and spent ten minutes with Garry. (For those who don''t know Martin, this is incredible, I don''t think he spends more than five minutes on anything, and rarely more than ten seconds, this is one incredibly busy man who is fantastically effective at spending a little time here and a little time there.)
Martin is also a very entertaining speaker, I wish I had a recording of his talk, I would play it often.
At one point in his presentation he digressed to tell a joke about the diamond business, this is much funnier in his wonderful Jewish accent, but imagine that part and enjoy the story.
There was a young man who wanted to follow in his father''s footsteps, he begged his father to be allowed to join the family business. The father fought and fought with him trying to get him to go into a business where he could stilll make money, but alas, the son still wanted to do nothing but be in the jewelry business.
Finally the father relented and said that he would have to agree what ever he was told, and no questions. (Martin repeated this several times with appropriate gestures, it was already quite funny by this point in the story.
The first day the father tells the son to remove all of the stones in one box and line them up, table down, culet up on a wooden chair. The son spent a lot of time doing this, thinking all the time that the father was nuts.
Okay, now take of your pants.
Now, the underwear too!
Now, sit on the diamonds.
The son, true to his word sat on the stones, which was quite painful as all the culets were pointed up into the air. "OUCH!"
Okay, now stand up and tell me what did you learn.
The son was speachless, so the father yelled at him, "DON''T SIT ON THE GOODS!"
One of the biggest problems that Jewelers have is turning the goods too slow. Martin showed us the net markup of Blue Nile and Tiffany''s and Zales, and although Blue Niles is the smallest their stock price is the highest. Why because they have a turn of 24 versus a turn of less than 2 for both Zales and Tiffany''s. ( I may be slightly off in the numbers, this is from memory.)
He also told us that margins are kaput in the diamond industry as we know it today, and showed us that although the gross margin of the retailer is higher than the wholesaler and the miner, that our net is 5% comparred to the 25% of the miner. He admonished all the wholesalers in the room who think they want the higher markups of the retailer to not be stupid and to stay with their 8% net margins. Ouch, that hurt!
China is coming as a major market according to Martin, so be prepared to play in it and don''t be surprised when the dollar is no longer the currency of choice for the sale of rough diamonds, expect to see that be the Euro in the not to distant future according to Mr. Rapaport.
It was a fascinating time and there will be much to think about an much wailing and nashing of teeth if all that Mr. Rapaport predicts becomes fact.
Wink
strmrdr
Super_Ideal_Rock
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Well I was being polite and letting you all get rested up.
If you check the past years thread the JCK thread was mostly pictures and a few stories and the fun stuff came later in other threads.
The biggest mistake the US ever made was allowing the dollar to become a world currency. Well the second biggest anyway the biggest was giving control to the international bankers/fed reserve.
Its funny that it takes all of Europe combined to bring out a decent currency to compete.
If you check the past years thread the JCK thread was mostly pictures and a few stories and the fun stuff came later in other threads.
The biggest mistake the US ever made was allowing the dollar to become a world currency. Well the second biggest anyway the biggest was giving control to the international bankers/fed reserve.
Its funny that it takes all of Europe combined to bring out a decent currency to compete.
Ellen
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Well gee Wink, that's probably because most of us know, What happens in Vegas stays in Vegas.
I've been tending to a very sick kid and trying to get ready to leave town tomorrow. No time for diamond talk.
Thanks for the jeweler story, funny! Good "point".
p.s. John, thanks for the great pics and commentaries!
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Date: 6/6/2007 6:21:11 AM
Author: Ellen
Well gee Wink, that''s probably because most of us know, What happens in Vegas stays in Vegas.
I''ve been tending to a very sick kid and trying to get ready to leave town tomorrow. No time for diamond talk.
Thanks for the jeweler story, funny! Good ''point''.
p.s. John, thanks for the great pics and commentaries!
John and I have decided that the comment in red is not really true. Your money may stay in Vegas, ours sure did, it costs a LOT of money to stay in a decent hotel and to eat, but the weight you gain comes right along home with you!
Wink
mrssalvo
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Wink or John (or anyone else who was there,
I''m curious if you all noticed any new trends heading our way with new product from designers? are things still mostly pave or are modern styles coming back. we''ve heard yellow gold is trying to make a come back too, any evidence of that?
I''m curious if you all noticed any new trends heading our way with new product from designers? are things still mostly pave or are modern styles coming back. we''ve heard yellow gold is trying to make a come back too, any evidence of that?
JohnQuixote
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Rest is surely needed after the oxygen-rich atmosphere (always feels like siesta time for the next few days out of Vegas) but discussion is always welcome.
Keep your eyes on the Yuan and the Rupee Strm. As they keep going up people in those countries, including sellers, will be able to buy for less. Eventually retailers here may be competing against foreign retailers for your business.
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