A rising tide shrinks the jewel business

[Garry H (Cut Nut)]

From the GIA e-newsletter:

TRADE: A comprehensive study by KPMG, an economic research group, concluded that worldwide jewelry sales will experience a 4.3% combined annual growth rate, from about $146 billion in 2006 to $230 billion in 2015.

However, if the industry were to reform its marketing practices, adopt more transparent and professional business methods, and spend more on product research, that growth could reach $280 billion, with significantly improved cash flow. Much of that extra growth would come in mature markets, especially the U.S., if manufacturers and retailers created more innovative products and marketing programs.

The study predicts that high debts, mounting inventories, and dwindling profits will catch up to the diamond trade within two years and force a series of mergers and consolidations as well as an average price decline of 20% in 2008.

Industry observers familiar with the report acknowledge that some consolidation may occur, but they believe strong consumer demand for diamonds worldwide will keep the diamond trade from experiencing the hard landing predicted by the report.

If our industry woke up to the idea that 1/2 the biz is round diamonds, and spent some effort to be more creative - then the growth coul easily become +10% a year - then we could keep up with the rest of the fashion related industries.

Who knows - it might be a diamond company that entertains me at the Australian Open grand slam event in 2015, instead of a tic toc company.
(either way - the tennis has been fantastic this last 2 weeks!)

 

[starryeyed]

Date: 1/27/2007 6:49:16 AM
Author:Garry H (Cut Nut)
From the GIA e-newsletter:
TRADE: A comprehensive study by KPMG, an economic research group, concluded that worldwide jewelry sales will experience a 4.3% combined annual growth rate, from about $146 billion in 2006 to $230 billion in 2015.

However, if the industry were to reform its marketing practices, adopt more transparent and professional business methods, and spend more on product research, that growth could reach $280 billion, with significantly improved cash flow. Much of that extra growth would come in mature markets, especially the U.S., if manufacturers and retailers created more innovative products and marketing programs.

The study predicts that high debts, mounting inventories, and dwindling profits will catch up to the diamond trade within two years and force a series of mergers and consolidations as well as an average price decline of 20% in 2008.

Industry observers familiar with the report acknowledge that some consolidation may occur, but they believe strong consumer demand for diamonds worldwide will keep the diamond trade from experiencing the hard landing predicted by the report.
If our industry woke up to the idea that 1/2 the biz is round diamonds, and spent some effort to be more creative - then the growth coul easily become +10% a year - then we could keep up with the rest of the fashion related industries.

As a consumer, I agree that increased marketing, more transparent business practices, and better product development would have a positive impact on sales. This can be said for just about anything though - from financial products to automobiles. So no big discovery there. Sales levels also depend on disposable income and consumer confidence - did KPMG say anything about that?

I have a hard time believing that there will be a 20% price decline across the board in 2008. Such broad generalizations don't mean much. I have a hard time believing a D IF will trade for 20% less next year. Nor can I imagine Cartier or Tiffany lowering prices by 20%. If it happens, hooray, but I just don't see it. Maybe gold commodities, for example, will fall 20% because there has been such a run-up, but I can't imagine that getting passed down to the consumer 1 for 1.

Garry, I think you talked about the $1.5 billion in excess inventory that exists between "Value of Polished at Local Level" and "Value of Diamond Content in Retail", so I can see where this puts pressure on the industry. But does this mean consolidation happens at the jewelry retail level? I would think consolidation would happen upstream of jewelry retail as a result of this excess inventory. And that hardly translates to lower prices at the retail level. Maybe I'm missing something?

Or, maybe the CEO of KPMG is planning to upgrade his wife's diamond next year and is thinking wishfully!

 

[strmrdr]

20% isnt that far off if you look at it..
for much of the industry a 20% or even a 50% cut puts them on par with the PS vendors.
The PS vendors will not likely see that kind of price decrease but as the rest of the industry tries and compete they will.

 

[starryeyed]

Date: 1/27/2007 5:32:14 PM
Author: strmrdr
20% isnt that far off if you look at it..
for much of the industry a 20% or even a 50% cut puts them on par with the PS vendors.
The PS vendors will not likely see that kind of price decrease but as the rest of the industry tries and compete they will.

Now, YOU''RE thinking wishfully Storm!

 

[Adylon]

I think in order to maintain margins jewelers will have to focus on 2 things in the future, and that is good branding and good design. Good design could mean copyrighting very specific "classic" pieces like Tiffany, or it could mean making new and innovative fresh/trendy designs like other jewelry designers out in the marketplace.

Margins for loose diamonds has shrunk but I can't see it decreasing much more especially online... the only thing that can reverse that trend, is again branding... either taking a superior cut diamond, getting it graded and branding/marketing it as ideal, or copyrighting a specific cut pattern, or dealing in conflict free stones or what have you. But margins for gold jewelry is still relatively healthy, too healthy in the mall stores if you ask me. I've seen some of them charge up to $100+/gram for 3-4 gram lightweight chain... even if it's high quality/designer that's still craziness if you ask me, and what I saw being sold for those prices was just basic chain. I don't think precious metals as a commodity will go down, infact I think we'll see $800 gold and $1400 platinum by years end. But I think margins in general will come down for precious metal jewelry unless the retailer is able to justify the steep margins due to exclusivity, designer brands etc (think Tiffany charm bracelets that are silver but cost an arm and a leg). And I really think independant jewelers will have to do more and more custom work if they want to survive.

 

[Garry H (Cut Nut)]

Date: 1/27/2007 8:02:18 PM
Author: Adylon
I think in order to maintain margins jewelers will have to focus on 2 things in the future, and that is good branding and good design. Good design could mean copyrighting very specific ''classic'' pieces like Tiffany, or it could mean making new and innovative fresh/trendy designs like other jewelry designers out in the marketplace.

Margins for loose diamonds has shrunk but I can''t see it decreasing much more especially online... the only thing that can reverse that trend, is again branding... either taking a superior cut diamond, getting it graded and branding/marketing it as ideal, or copyrighting a specific cut pattern, or dealing in conflict free stones or what have you. But margins for gold jewelry is still relatively healthy, too healthy in the mall stores if you ask me. I''ve seen some of them charge up to $100+/gram for 3-4 gram lightweight chain... even if it''s high quality/designer that''s still craziness if you ask me, and what I saw being sold for those prices was just basic chain. I don''t think precious metals as a commodity will go down, infact I think we''ll see $800 gold and $1400 platinum by years end. But I think margins in general will come down for precious metal jewelry unless the retailer is able to justify the steep margins due to exclusivity, designer brands etc (think Tiffany charm bracelets that are silver but cost an arm and a leg). And I really think independant jewelers will have to do more and more custom work if they want to survive.

Adylon I beg to differ.

The new winners will e the ones who change the rules of competition.

The current business model will not allow any more dominance than we now have fro Tifany et al at one corner, and Blue nile and Walmart et al at other corners.

The new rules in my estimantion will come from solving the consumer confidence issue

and

or

breaking out of round and princess cut syndrome

 

[diagem]

Date: 1/28/2007 7:00:34 AM
Author: Garry H (Cut Nut)

Date: 1/27/2007 8:02:18 PM
Author: Adylon
I think in order to maintain margins jewelers will have to focus on 2 things in the future, and that is good branding and good design. Good design could mean copyrighting very specific ''classic'' pieces like Tiffany, or it could mean making new and innovative fresh/trendy designs like other jewelry designers out in the marketplace.

Margins for loose diamonds has shrunk but I can''t see it decreasing much more especially online... the only thing that can reverse that trend, is again branding... either taking a superior cut diamond, getting it graded and branding/marketing it as ideal, or copyrighting a specific cut pattern, or dealing in conflict free stones or what have you. But margins for gold jewelry is still relatively healthy, too healthy in the mall stores if you ask me. I''ve seen some of them charge up to $100+/gram for 3-4 gram lightweight chain... even if it''s high quality/designer that''s still craziness if you ask me, and what I saw being sold for those prices was just basic chain. I don''t think precious metals as a commodity will go down, infact I think we''ll see $800 gold and $1400 platinum by years end. But I think margins in general will come down for precious metal jewelry unless the retailer is able to justify the steep margins due to exclusivity, designer brands etc (think Tiffany charm bracelets that are silver but cost an arm and a leg). And I really think independant jewelers will have to do more and more custom work if they want to survive.

Adylon I beg to differ. Me too.

The new winners will e the ones who change the rules of competition. Small people with big ideas will change the rules of competition vs. BIG people with small ideas!!!!


The current business model will not allow any more dominance than we now have fro Tifany et al at one corner, and Blue nile and Walmart et al at other corners.

The new rules in my estimantion will come from solving the consumer confidence issue. i agree, but consumer confidence will not be the main issue (in my opinion).

and

or

breaking out of round and princess cut syndrome Creativity is the name of the game, there are soooo many more options than rounds and princesses, the problem is that it will take ''time'' to get this industry out of its primitive fashion. I am witnessing quite a few cutters/designers that are innovating their techniques in product developments.

As far as a 20% drop in prices...., i dont see any common sense that this could happen...
A lot will depend on the Russians in this next year, but I dont see a disaster ahead of us....

 

[denverappraiser]

When they say things like a 20% drop in price, it’s important to be sure to understand what is meant. I don’t think this refers to an across the board price drop but rather an evening out of the prices between the most expensive and the least expensive merchants for similar or even identical merchandise. This is almost inevitable as diamonds are increasingly sold as commodities. Branding is being widely sold to the trade as the solution but I think it’s deeper than that and Garry’s comment is pretty close to the heart of it. For dealers to survive in a commodity market they must be perceived as adding value. This value can be different cutting, different designs, different warranties, different locations, better credibility or any number of other things but the dealers who claim to add value without actually delivering it are heading for a fall. Unfortunately, there’s quite a lot of this in the market.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[strmrdr]

Date: 1/28/2007 10:21:38 AM
Author: denverappraiser

When they say things like a 20% drop in price, it’s important to be sure to understand what is meant. I don’t think this refers to an across the board price drop but rather an evening out of the prices between the most expensive and the least expensive merchants for similar or even identical merchandise. This is almost inevitable as diamonds are increasingly sold as commodities. Branding is being widely sold to the trade as the solution but I think it’s deeper than that and Garry’s comment is pretty close to the heart of it. For dealers to survive in a commodity market they must be perceived as adding value. This value can be different cutting, different designs, different warranties, different locations, better credibility or any number of other things but the dealers who claim to add value without actually delivering it are heading for a fall. Unfortunately, there’s quite a lot of this in the market.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

exactly what I was trying to say but better said.
I agree 100%

 

[oldminer]

Yes, the failure to deliver the promised benefit of a brand is going to eventually level out or eliminate premiums for brands that do not measure up to what BRANDING means. A Brand has consistency of delivery. In a successful brand you know exactly what to expect when the package in opened. Many diamond brands do not accomplish this consistent delivery of performance and quality. Those will eventually fail in becoming long term brands. Brands which do deliver consistent quality have a good chance to carry the market forward.

I our appraisal offices that I partner in, located in Mumbai, India, we are providing third party "jewelry certification" of quality to manufacurers and retailers for the domestic India market and also for some export. Though this domestic market is in its relative infancy, the speed of growth there is going to far exceed the US or European growth pattern. Third party assurance is an element of branding which makes the consistent delivery of jewelry and gems a possibility. In India the cost of these documents is extremely small compared to the rates for similar work done here. Even appraisers will need to greatly adjust their business models to compete with documentation done upstream, at the low cost labor sources. Eventually, these documents will enter the US and European markets with Indian and probably Chinese made jewelry products.

The description of diamonds will get technologically more and more accurate and specific. The cost for the services of grading will come down although the volume growth potential is good enough to plan on having sufficient business even at reduced revenue per stone. All of us will have to get used to a new four letter word which begins with "W"--work. Just like the rest of the world, we''ll have to adjust and give up some of our free time.

 

[Adylon]

Date: 1/28/2007 7:00:34 AM
Author: Garry H (Cut Nut)

breaking out of round and princess cut syndrome

I agree with this 100% as well. But don't you think we need more branded/unique diamond shapes? Like the royal asscher, they got some celebrities to wear them in large sizes and then the asscher gained in popularity again after being forgotten for nearly 30yrs or whatever. Imagine promotion/advertising like that done on a much larger scale. I think DeBeer's has wasted a lot of money advertising three-stone jewelry, right hand ring, journey, etc... I think they would have been much better off promoting variety of diamond shapes, that diamonds are to be worn every day as a fashionable accessory and a reflection of your personality, etc, etc. And then all the other players could use that general theme to promote their brands, proprietary cuts, designs, etc.

Personally I think journey was the biggest waste of money they ever did.

 

[denverappraiser]

Date: 1/28/2007 10:36:49 AM
Author: oldminer
Yes, the failure to deliver the promised benefit of a brand is going to eventually level out or eliminate premiums for brands that do not measure up to what BRANDING means. A Brand has consistency of delivery. In a successful brand you know exactly what to expect when the package in opened. Many diamond brands do not accomplish this consistent delivery of performance and quality. Those will eventually fail in becoming long term brands. Brands which do deliver consistent quality have a good chance to carry the market forward.

I our appraisal offices that I partner in, located in Mumbai, India, we are providing third party ''jewelry certification'' of quality to manufacurers and retailers for the domestic India market and also for some export. Though this domestic market is in its relative infancy, the speed of growth there is going to far exceed the US or European growth pattern. Third party assurance is an element of branding which makes the consistent delivery of jewelry and gems a possibility. In India the cost of these documents is extremely small compared to the rates for similar work done here. Even appraisers will need to greatly adjust their business models to compete with documentation done upstream, at the low cost labor sources. Eventually, these documents will enter the US and European markets with Indian and probably Chinese made jewelry products.

The description of diamonds will get technologically more and more accurate and specific. The cost for the services of grading will come down although the volume growth potential is good enough to plan on having sufficient business even at reduced revenue per stone. All of us will have to get used to a new four letter word which begins with ''W''--work. Just like the rest of the world, we''ll have to adjust and give up some of our free time.

I’m quite surprised that the manufactures aren’t providing better documentation by now. There’s nothing in the inspection by a US based gemologist or appraiser that couldn’t, and shouldn’t be done buy a grader overseas. Much of it, like grading of stones, sarin, quality control, testing of various metals and the like are surely already being done, they just aren’t being transmitted to the consumer. Other items, like plotting, various types of photography, origin and treatment tests and specialty tests like BrillianceScope and Isee2 could easily be arranged if the manufacturer wanted to do it and could get other manufactures and retailers involved with a particular piece to cooperate. Whether this is being done by employees of the manufactures, subcontractors or some combination is not importantly different if it’s part of the sales presentation. Dealer supplied documentation is extremely useful for what it is but one thing it’s not is an appraisal.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[Paul-Antwerp]

Date: 1/28/2007 7:00:34 AM
Author: Garry H (Cut Nut)

The new winners will e the ones who change the rules of competition.

The new rules in my estimantion will come from solving the consumer confidence issue

and

or

breaking out of round and princess cut syndrome

I could not agree with you more, Garry.

But do not forget to take a few steps back every now and then, in order to get a helicopter-perspective again.

Live long,

 

[strmrdr]

Not going to do a huge quote but this is in responce to Neil above...
Once again Paul is ahead of the curve providing his network with sarin, IS, pictures and education to put them up ahead of the local competition and on par with the PS vendors.
Why more cutters don''t do that is a mystery.

 

[diagem]

Date: 1/28/2007 1:19:02 PM
Author: strmrdr
Not going to do a huge quote but this is in responce to Neil above...
Once again Paul is ahead of the curve providing his network with sarin, IS, pictures and education to put them up ahead of the local competition and on par with the PS vendors.
Why more cutters don''t do that is a mystery.

That is the problem...

There is a huge, huge gap between manufacturers/cutters and jewelers who are in constant touch with consumers...

Cutters just dont know what jewelry is or what the jeweler lover wants.
They (cutters) are busy cutting Diamonds..., and for cutters to be succesfull means..., VOLUME!
Cutters are based in cutting centers and they dont mix with the jewelers themselves.

Jewelers on the other hand are way out on the other side..., Jewelers have lack of information on the Diamond cutting industry, and are limited to design/create with diamond innovations.

Today we are starting to witness numerous cutters who are staring to mingle with jewelry designers. And its looking good with huge potential...
You can start seeing some great cutting/jewelry design combinations poping out, they are usually high-end and expensive! Their labor cost are very high!!!

 

[strmrdr]

Date: 1/28/2007 2:28:49 PM
Author: DiaGem

Today we are starting to witness numerous cutters who are staring to mingle with jewelry designers. And its looking good with huge potential...
You can start seeing some great cutting/jewelry design combinations poping out, they are usually high-end and expensive! Their labor cost are very high!!!

There is a lot of value add there to make up for the high price.
No problems here with that.
Where the problem comes in is when they want to charge those prices on mass produced pieces when the designer goes "big name".
Then the value add goes away and they become just another overpriced player.

 

[diagem]

Date: 1/28/2007 2:36:52 PM
Author: strmrdr

Date: 1/28/2007 2:28:49 PM
Author: DiaGem

Today we are starting to witness numerous cutters who are staring to mingle with jewelry designers. And its looking good with huge potential...
You can start seeing some great cutting/jewelry design combinations poping out, they are usually high-end and expensive! Their labor cost are very high!!!

There is a lot of value add there to make up for the high price.
No problems here with that.
Where the problem comes in is when they want to charge those prices on mass produced pieces when the designer goes ''big name''.
Then the value add goes away and they become just another overpriced player.

You mean round shapes accompanied with a lot of papers, pictures and off course numbers??

 

[strmrdr]

Date: 1/28/2007 2:56:29 PM
Author: DiaGem

Date: 1/28/2007 2:36:52 PM
Author: strmrdr

Date: 1/28/2007 2:28:49 PM
Author: DiaGem

Today we are starting to witness numerous cutters who are staring to mingle with jewelry designers. And its looking good with huge potential...
You can start seeing some great cutting/jewelry design combinations poping out, they are usually high-end and expensive! Their labor cost are very high!!!

There is a lot of value add there to make up for the high price.
No problems here with that.
Where the problem comes in is when they want to charge those prices on mass produced pieces when the designer goes ''big name''.
Then the value add goes away and they become just another overpriced player.

You mean round shapes accompanied with a lot of papers, pictures and off course numbers??

touche!
Good point but not what I was talking about.

 

[diagem]

i know, just being a bit cynical!!!

 

[WinkHPD]

Date: 1/28/2007 7:00:34 AM
Author: Garry H (Cut Nut)

The new rules in my estimantion will come from solving the consumer confidence issue

Gary, I agree.

I am curious, if the public would respond. Is the new "Face to face" software and ability to do one to many presentations helping us vendors with this issue? I like to think it is, but I would love to hear the word from our viewers.

Wink

 

[strmrdr]

Date: 1/28/2007 6:01:29 PM
Author: Wink

Date: 1/28/2007 7:00:34 AM
Author: Garry H (Cut Nut)

The new rules in my estimantion will come from solving the consumer confidence issue

Gary, I agree.

I am curious, if the public would respond. Is the new ''Face to face'' software and ability to do one to many presentations helping us vendors with this issue? I like to think it is, but I would love to hear the word from our viewers.

Wink

Id have to say yes it is at this time.
It makes the vendors more human and speeds up the getting to know the vendor process.
Im not 100% sure its a good thing however.

 

[WinkHPD]

Date: 1/28/2007 10:26:16 PM
Author: strmrdr

Date: 1/28/2007 6:01:29 PM

Author: Wink

Date: 1/28/2007 7:00:34 AM

Author: Garry H (Cut Nut)


The new rules in my estimantion will come from solving the consumer confidence issue

Gary, I agree.


I am curious, if the public would respond. Is the new ''Face to face'' software and ability to do one to many presentations helping us vendors with this issue? I like to think it is, but I would love to hear the word from our viewers.


Wink

Id have to say yes it is at this time.

It makes the vendors more human and speeds up the getting to know the vendor process.

Im not 100% sure its a good thing however.

Why?

 

[starryeyed]

Date: 1/28/2007 7:00:34 AM
Author: Garry H (Cut Nut)
The new rules in my estimantion will come from solving the consumer confidence issue
and
or
breaking out of round and princess cut syndrome

Garry, I agree with what you are saying. In my extremely limited consumer-based experience, one thing I see happening is the arisal of more fancy shapes. Heck, in the Spring/Summer 2007 edition of Town & Country Weddings, ALL of the featured rings on the jewelry pages are FANCIES - cushion, emerald, asscher and princess.

However, to some extent, I see the rise of fancies to be at odds with building consumer confidence. With RB''s, the ideal proportions are pretty well-defined and understood by educated consumers. Being able to discern that a vendor is telling the truth about a RB builds confidence for the consumer.

A beautiful, "ideal" cut fancy is much more elusive than a RB one. On the one hand, if a vendor can supply them consistently, my perception is that there is more margin to be made with nice fancies than RB''s. However, because fancies are not well-understood, there is a certain leap of faith that a consumer must make to believe that it''s not "just the lights" or whatever. It''s difficult for the consumer to definitely say the cut is great, so there is always a possible element of doubt.

So without well-defined proportions, angles, etc., how can the consumer be truly confident about a fancy? Your handy-dandy ASET-scope helps for sure, but not everyone has one. Any thoughts?

 

[starryeyed]

Date: 1/27/2007 6:07:29 PM
Author: starryeyed

Date: 1/27/2007 5:32:14 PM
Author: strmrdr
20% isnt that far off if you look at it..
for much of the industry a 20% or even a 50% cut puts them on par with the PS vendors.
The PS vendors will not likely see that kind of price decrease but as the rest of the industry tries and compete they will.

Now, YOU'RE thinking wishfully Storm!

Hey, maybe you and Mr. KPMG will get your wish. Check out this THREAD.
This user is getting a Cartier "1895" 1.5-carat ring for the same price as a WF ACA of similar quality!
A similar phenomema occurred with another user shopping at Tiffany.
The whole thing fell apart though for a 3-carat ring.....bummer.

 

[strmrdr]

Date: 1/29/2007 12:57:19 PM
Author: starryeyed

Date: 1/27/2007 6:07:29 PM
Author: starryeyed

Date: 1/27/2007 5:32:14 PM
Author: strmrdr
20% isnt that far off if you look at it..
for much of the industry a 20% or even a 50% cut puts them on par with the PS vendors.
The PS vendors will not likely see that kind of price decrease but as the rest of the industry tries and compete they will.

Now, YOU''RE thinking wishfully Storm!

Hey, maybe you and Mr. KPMG will get your wish. Check out this THREAD.
This user is getting a Cartier ''1895'' 1.5-carat ring for the same price as a WF ACA of similar quality!
A similar phenomema occurred with another user shopping at Tiffany.
The whole thing fell apart though for a 3-carat ring.....bummer.

lol
When I walk into a b&m and they are grumbling about having to match an online price "yet again to get a sale" its a pretty good indication of where its heading.
Which matches up with what I said and what Neil said.

 

[CaptAubrey]

Here is the KPMG report (or at least the exec. summary):

http://www.gjepc.org/gjepc/PDF/Executive_Summary.pdf

I am still digesting this thing, but one point to be aware of is that it was commissioned by the Gem & Jewellery Export Promotion Councill, which is the umbrella trade group tasked with promoting the Indian diamond and jewelry business--not exactly a neutral party. In a sense, this report is a challenge to De Beers, as the potential market growth it talks about is something Supplier of Choice was supposed to accomplish but has not.

One notable point, though, is that the report predicts that China will gradually draw off India''s polishing business, growing to 21% of the market by 2015.

If I''m reading it correctly, the 20% figure cited in the report Garry cut and pasted refers to rough prices, not diamond jewelry.

Interesting reading, definitely.

 

[starryeyed]

Thanks for the link Capt! That summary was a bit dense. It almost seemed too broad to be meaningful, and not broad enough to be comprehensive. I guess I have a few questions:

1. Figure 5, Snapshot of Key Trends, indicates rising prices of rough supply and emergence of new mines. How likely is it that there will be new mine discoveries? I guess rising rough prices is plausible, and that would drive prospecting, but how do we know there will be any more discoveries? If there are, how do we know the yield in advance to say the rough market will suffer from too much supply?

2. How long does it take to learn cutting? Will China be able to achieve excellence in cutting in 8 years?

3. In terms of the analysis method, where''d they get the "assigned probabilities" that seems to drive the predicted outcomes? Maybe from the folks commissioning the study?

4. Why would Turkey take over from Italy in gold? Wages? What about design and craftmanship? Perhaps I''m biased, but the Italians are king when it comes to designing stuff - jewelry, handbags, shoes, clothes, etc.

5. What about the Kimberley Process and Supplier of Choice? I guess I always saw this as a way of controlling trading activity. It''s not working?

Any thoughts?

 

[strmrdr]

Some facts and some opinions for ya...

1: there are ~7 mines coming online over the next 5 to 10 years in Canada and a few in Russia that are allready in the works. There is no question that new mines are coming online.

2: the schools in the US lasts I believe 6 months, 8 years.. maybe but the problem is power and roads not training.

3: dunno and huh?

4: Turks have a tradition of being the craftsman of the area dating back thousands of years.

5: no the old SOC is not working they only controll less than 50% of the rough and will controll less than that in 10 years. When Paul was interrupted he was talking about the new SOC they are trying. Odds are in my opinion it wont work either.
Kimberley Process is a consumer confidence issue more than anything and second a tax issue for the countries with the mines. Want the paper pay the tax, no tax no paper, no can sell.

 

[Garry H (Cut Nut)]

Date: 1/29/2007 11:53:28 AM
Author: starryeyed

Date: 1/28/2007 7:00:34 AM
Author: Garry H (Cut Nut)
The new rules in my estimantion will come from solving the consumer confidence issue
and
or
breaking out of round and princess cut syndrome

Garry, I agree with what you are saying. In my extremely limited consumer-based experience, one thing I see happening is the arisal of more fancy shapes. Heck, in the Spring/Summer 2007 edition of Town & Country Weddings, ALL of the featured rings on the jewelry pages are FANCIES - cushion, emerald, asscher and princess.

However, to some extent, I see the rise of fancies to be at odds with building consumer confidence. With RB''s, the ideal proportions are pretty well-defined and understood by educated consumers. Being able to discern that a vendor is telling the truth about a RB builds confidence for the consumer.

A beautiful, ''ideal'' cut fancy is much more elusive than a RB one. On the one hand, if a vendor can supply them consistently, my perception is that there is more margin to be made with nice fancies than RB''s. However, because fancies are not well-understood, there is a certain leap of faith that a consumer must make to believe that it''s not ''just the lights'' or whatever. It''s difficult for the consumer to definitely say the cut is great, so there is always a possible element of doubt.

So without well-defined proportions, angles, etc., how can the consumer be truly confident about a fancy? Your handy-dandy ASET-scope helps for sure, but not everyone has one. Any thoughts?

Starreyeyed if you look here you will see the world still runs on rd and pr
http://idexonline.com/Diamond_Index_Drivers.asp
Emerald (inc asschers) make a very small showing.

Of course the answer relies on 2 things:

1. better fancy shapes - even better than rounds for some uses and viewing conditions would help a lot - and we dont have then just yet

2. democratic grading systems - eg a princess that is ideal should be ideal in comparison to a round that is ideal - and we dont have that yet


Our little Cut Group hopes to change that within a few years. We are playing with the first stones from our small Master Stone Study - the first 2 are in my pocket.

The first step will be Sergey''s new DiamCalc 3.0 with a professional package option for new cut design.

 

[fire&ice]

The flaw I see is *assuming* the clientel wants and desires fancy shapes. Round is classic as some of the emerald cuts & royal asschers. I don't think diamonds are fashion - jewelery perhaps - but not diamonds.

Also, branding (to me) isn't necessarily coming up with a new fangeled product. An individual can be their own brand. Case in point relating to my little world. Hubby just bought an important vintage designer necklace and bracelet set as a surprise for me. He knew he wanted something that would wear well on me, something I would like & something that was worthy. He mayve found this product at a lesser price; but, the brand, insert gallery selling the piece, was worth it for his comfort level. So, in other words - confidence in the "brand" - seller.