• Industry Analysis: Basel Sales Brisk for Luxury Goods, Sluggish for the Rest
• From Gems & Gemology: Spring Issue Examines Mozambique Tourmaline,
  Diamond Treatments
• L.A. Open House Abuzz With Marketing Tips
• Photo Display Captures Gem Activity in Colombia and Mozambique
• Treated Diamonds Added to G&G Book Series
• 2008 Jewelry Career Fair Dates Announced
• From GIA Education: Identifying Rough in the Field
• Find a GIA Lab Class in a City Near You
  

Industry Analysis: Basel Sales Brisk for Luxury Goods, Sluggish for the Rest

Business at the April 3-10 BaselWorld jewelry and watch fair strongly reflected the state of the global economy. Sellers of large diamonds and luxury jewelry brands reported brisk activity, while those offering products aimed at the middle and lower end of the market struggled.

Diamond sales were strong for two reasons. First, the common perception that supplies are tightening, especially in 3-plus carat goods, has provided an incentive to buyers. Second, diamond prices have increased far less than gold or platinum prices during the past six months, and diamonds remain economically attractive in Europe and other markets where the U.S. dollar has depreciated.

"This show was about big diamonds," said one major Israeli dealer. "Buyers came from Russia, Europe and the Middle East looking for top stones. They have seen the price trends and believe there is nowhere to go but up."

Dealers came prepared to sell. One top luxury retailer noted there were more than 100 D-Flawless diamonds over 2 carats offered at the show.

Several other dealers of major stones agreed that business was good, but they also saw signs for concern.

One, who sold several stones over 10 carats, said that most of the action is coming from dealers who do not have a specific customer in mind and are generally holding on to the large stones. "They have seen prices [of such goods] increase by 40% in the past year and believe they can take more profits." Another noted that a recent sharp decline in the Hong Kong stock market has caused "a great deal of wealth to evaporate very quickly," which is leading many of the super-rich to hold off on buying such large stones.

Dealers showing medium-quality diamonds and diamond jewelry priced under $2,000 encountered extremely slow sales and intense price resistance. "Prices for gold and diamonds have gone up sharply, as everyone knows, but buyers [concerned about customer resistance] are really aggressive in trying to push them down," noted one European diamond jewelry manufacturer.

BaselWorld usually showcases some of the world's finest fancy-color diamonds. But this year, despite greater demand than ever, there were few major pinks and even fewer top blues. "These goods are almost impossible to get now," said one longtime dealer.

Those that were on display -- large vivid yellows and small fancy pinks and blues (most under half a carat without Vivid or Intense grades) -- found strong demand, according to dealers.

Demand for top colored gemstones was spotty, with buyers resisting high prices even for large goods without heat treatment.

One major U.S. dealer of rubies found few buyers, even for very high-end goods, and the story was much the same with Colombian emeralds. Sapphires proved more popular, but as one dealer noted, the speculative mentality pushing large diamond sales is not there with colored stones.

"Dealers believed prices would be going up, so they were asking close to retail for their goods," one buyer said.

On a brighter note, the market for top-quality cultured pearls, both saltwater and freshwater, was strong because of their growing fashion appeal, particularly among pearl brands that have launched multimillion-dollar marketing campaigns to keep them in fashion.

Manufacturers of gold and platinum jewelry found extremely slow demand because of the near-record prices of these metals. Those offering branded designer pieces have found ways of reducing the metal content, such as blending gold with less-expensive gem materials, including quartz and even decorative stones, to hold down costs.

Watches are the heart of BaselWorld, and -- like large diamonds -- luxury watch brands continue to see double-digit increases in demand, despite the fact that prices for most $10,000-plus brands were up 15-25% since January because of the soft U.S. dollar.

RETAIL: Signet Group, the parent company of Kay Jewelers and Jared the Galleria of Jewelry, reported a 2.5% decline in operating margins for fiscal 2008 compared to fiscal 2007. Signet's troubles reflect the current predicament of most jewelers serving the middle class: they are caught between customers whose spending power has declined during the past year and rapidly increasing prices for precious metals. Signet's U.S. same-store sales declined 1.7%.

Russell Shor
Senior Industry Analyst

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The Spring issue of G&G mails next week.

From Gems & Gemology: Spring Issue Examines Mozambique Tourmaline, Diamond Treatments

The Spring 2008 issue of Gems & Gemology (G&G), which mails to subscribers the week of April 21, features Paraíba-type tourmaline from Mozambique, a history of diamond treatment methods, purple diamonds from Siberia and the annual G&G Challenge quiz.

Vivid blue-to-green copper-bearing tourmaline has been one of the most sought-after colored stones since its discovery in Brazil's Paraíba state two decades ago. In the lead article, "Copper-Bearing (Paraíba-type) Tourmaline from Mozambique," G&G editor Brendan Laurs and co-authors explore the newest source of similar material. Produced mainly since 2005, copper-bearing tourmalines from the Mavuco area have been recovered in large sizes and can attain Paraíba-like hues, most commonly when heat treated. The article reports on the material's gemological properties as well as on mining operations at Mavuco.

"A History of Diamond Treatments," by Thomas Overton and James Shigley, explores early coatings and dyes as well as modern techniques of color alteration through irradiation and high-pressure, high-temperature (HPHT) annealing. It also reviews the development of clarity enhancement, from laser drilling to glass filling. For each of these diamond treatments, the authors summarize the key identification procedures.

Rounding out the Spring issue lineup is "Natural-Color Purple Diamonds from Siberia," in which Dr. Sergey Titkov of the Russian Academy of Sciences and a team of researchers use spectroscopic methods to better understand the causes of this rare color.

The Lab Notes column provides the latest reports from the GIA Laboratory, including unusual inclusions in aquamarine, high-temperature heat-treated zircon, and the first CVD synthetic diamond submitted for Dossier grading. The Gem News International section gives highlights from this year's Tucson gem and mineral shows, such as spessartine from a new mine in Tanzania, plus updates from around the world, with reports on various gems from Afghanistan, green plagioclase from East Africa, and more.

Two special features are the announcement of this year's Dr. Edward J. Gübelin Most Valuable Article Awards and the G&G Challenge, a 25-question multiple-choice quiz based on articles from the 2007 issues. Successful Challenge participants will receive a GIA Continuing Education Certificate and, if they score 100 percent, recognition in an upcoming issue of G&G.

To purchase a copy of the Spring issue or any of the 2007 issues, or to subscribe to G&G, click here or contact Circulation Coordinator Debbie Ortiz, by calling toll-free (800) 421-7250, ext. 7142. From outside the U.S. and Canada, dial (760) 603-4000, ext. 7142.

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L.A. Open House Abuzz With Marketing Tips

Nearly 200 people gathered to find out "what the buzz" was all about at a March 27 Open House at GIA Los Angeles. Dr. Timothy Malone, associate professor for the GIA School of Business, presented an expert's point of view on methods of word-of-mouth marketing in the jewelry industry.

Malone said this type of marketing is one of the most effective tools for businesses because it targets "influencers," the people most passionate about a product. Word-of-mouth marketing is powerful because it lends credibility and, by reaching out to those influencers, increases the odds they will help spread the message, he said.

"Consumers are more savvy than ever because they research the information needed to make a good buying decision," Malone said. "As a jewelry marketer, it's important to be a source of relevant information to those consumers so they are connecting with you, as well as your services and products."

Malone said word-of-mouth marketing can be implemented into your business through various forms, including blogs, social networking sites, podcasts and videocasts. He said information should always be consistently updated with images to engage the audience.

The GIA Los Angeles Open House was an opportunity for jewelry professionals, prospective students or anyone interested in the gem and jewelry industry, to find out more about GIA.

For more information on the GIA School of Business, visit www.gia.edu/education.

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These photos, and more, from Colombia and Mozambique are on display at GIA.

Photo Display Captures Gem Activity in Colombia and Mozambique

GIA's new photo exhibit, "On the Gem Trail," showcases 35 images of gems, landscapes and cultures from Mozambique and Colombia taken by GIA staff members Brendan Laurs, editor of Gems & Gemology (G&G) and Robert Weldon, manager of Photography and Visual Communications.

"This is a very special exhibit because of the exclusivity of having access to these remote and restricted areas," explained Elise Misiorowski, director of the GIA Museum. "Gaining entrance into mining localities, trading centers, cutting facilities, auction houses, design studios and manufacturing operations is a rare privilege for outsiders."

The photos on display include:

Emeralds in Colombia
Weldon visited Colombia in late 2005. His photo essay chronicles the path an emerald takes -- from the mines in Boyacá State to the main market along Avenida Jiménez in the city of Bogotá.

Weldon has reported on gemstones and gemological issues for more than 16 years. He continues to travel to some of the world's major gem sites, including Myanmar, East Africa, India, Thailand, Russia, Sri Lanka, Brazil and Bolivia. Weldon's award-winning photographs have appeared in scores of international gemological, jewelry and consumer publications, and in several books.

Paraíba-type Tourmaline in Mozambique
Laurs visited Mozambique in August and September 2007 to report on what is probably the world's largest deposit of Paraíba-type tourmaline. His images document the landscape, mining and culture of this area.

Laurs is a gemologist and geologist specializing in the formation of gem deposits. In addition to Mozambique, he has documented the mining and geology of gems in Brazil, Madagascar, Namibia, Zambia and Malawi. He has published articles in G&G, Canadian Mineralogist and several conference proceedings. He has also made numerous presentations to technical conferences, gem and mineral societies and museum groups and is co-chair of GIA's Gemological Research Conference.

Viewings of the "On the Gem Trail" exhibit is free and will be on display in the Rosy Blue Student Commons area at GIA's Carlsbad headquarters throughout the year. Reservations for tours of the exhibit must be made through GIA Guest Services by calling (760) 603-4000 ext. 4116. Exhibit hours are 8 a.m. to 5 p.m. Monday through Friday.

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G&G's third In Review book is now available.

Treated Diamonds Added to G&G Book Series

Treated Diamonds, the third book in the Gems & Gemology In Review series, is now available. The 301-page book is a collection of articles, Lab Notes, Gem News entries and conference abstracts on treated diamonds published in Gems & Gemology (G&G), GIA's award-winning quarterly journal, from 1938 through 2007.

The world of diamond treatments has come a long way in the last 70 years. This book chronicles the development of color treatments -- coating, irradiation and high-pressure, high-temperature (HPHT) annealing -- as well as clarity treatments in the form of laser drilling and glass filling.

"Color- and clarity-treated diamonds are widespread in the jewelry industry, and their recognition has been a major focus of gemological research for several decades," said Dr. Jim Shigley, GIA's distinguished Research fellow and editor of Treated Diamonds. "This new volume in the Gems & Gemology In Review series brings together important articles and short reports on all aspects of treated diamonds. The volume will be of great value to gemologists and others interested in understanding and detecting diamond treatments."

Available for $59.95, the book also features a history of diamond treatments, commentary from industry leaders and the "Identification of Filled Diamonds" chart that first appeared in the journal's Fall 1994 issue.

"With the ever-increasing sophistication of diamond treatments, jewelers, gemologists and diamantaires must stay current with the gemological literature on identification and characterization of treated stones," said Alice Keller, editor-in-chief of G&G. "Until now, this material was spread across dozens of issues of Gems & Gemology. Treated Diamonds brings it all together into one critical reference."

The two previous volumes in the series, Synthetic Diamonds and Colored Diamonds, are also available from G&G.

For more information on G&G's new Treated Diamonds book, click here, e-mail gandg@gia.edu or call toll-free (800) 421-7250, ext. 7142. Outside the U.S. and Canada, call (760) 603-4000,
ext. 7142.

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2008 Jewelry Career Fair Dates Announced

Mark your calendars. GIA's Jewelry Career Fair will be held July 25 in New York City at the Jacob K. Javits Convention Center and Sept. 12 in Carlsbad, California at the Institute's headquarters.

The GIA Jewelry Career Fair is the industry's largest and most prominent recruiting event. Representatives from Tiffany & Co., Saks Fifth Avenue, Home Shopping Network and Zale Corporation, for example, have previously recruited at Career Fair.

"GIA's Jewelry Career Fair is more than a typical job fair," said Kathryn Kimmel, vice president and chief Marketing officer, who helped found the event. "This one-day event showcases the industry's most respected leaders, who will recommend strategies on how to start and build a career in jewelry, discuss what employers look for and share their secrets for success."

"Job seekers will be able to network and get career development information and industry knowledge through seminars, one-on-one career coaching sessions, workshops and résumé reviews," she added. Career Fair was founded by GIA and The Jewelers 24 Karat Club of Southern California. The Nielsen Jewelry Group is the prime sponsor of the New York Career Fair.

The GIA Jewelry Career Fair in New York at the Jacob K. Javits Convention Center will take place from 9 a.m. to 3 p.m. on Friday, July 25, and is free and open to those interested in a career in jewelry. For more information visit, www.careerfair.gia.edu.

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Top: The characteristic shape of a ruby crystal provides evidence for a gemologist in the field to identify it. Illustration by Peter Johnston. Bottom: Magnification with a darkfield loupe may reveal inclusions that will conclusively separate the ruby crystal from any synthetic or imitation. The inclusions may also provide evidence in determining whether the ruby has undergone any treatment. Photo by John Koivula/GIA.

The spectrum of ruby conclusively narrows the possibilities down to natural, treated or synthetic ruby, or some assembly with a ruby component. Illustration by Peter Johnston.

From GIA Education: Identifying Rough in the Field

One of the most important skills you can have as a gemologist is the ability to identify gemstones and detect treatments. While gemological laboratories and advanced equipment are becoming more and more necessary, you may often have to make identifications in the field under conditions that limit the amount of equipment available.

Identifications of rough gemstones, at least initially, are often performed at a mining location or market near a mining source. Although fully equipped portable labs exist, they can be cumbersome and can attract unwanted attention. Some of the equipment may even be more difficult to use on rough gemstones, like the refractometer, which usually gives a more accurate reading off of a polished surface.

A gemologist who buys rough at mining locations often relies more on general observation abilities and a thorough knowledge of crystal shapes, crystal face angles, growth features, color nuances, fracture types and other visual clues to identity gemstones. Hand-held instruments, like the darkfield loupe, spectroscope and dichroscope, along with a bottle of mineral oil for immersion, are often the only tools you need.

The trained gemologist will also note identifying characteristics when visually observing the rough -- such as whether the striations (parallel growth markings) on the crystal faces are horizontal, as with quartz, or vertical as with tourmaline.

Characteristic crystal shapes called habits provide further evidence for identification. Garnet, spinel and corundum, for example, all come in red colors. A gemologist knows, however, that garnet typically shows a dodecahedron or tarpezohedron shape, spinel an octahedron or flattened twin crystal, and corundum (ruby specifically) a flattened, tabular, six-sided prism terminated by flat faces, often with raised triangular growth markings.

A small portable instrument like the hand-held spectroscope is invaluable when you are trying to identify an alluvial pebble with no recognizable structure. Garnet, spinel and ruby all have identifying spectra. If the spectrum proves the stone is a ruby, the hand-held loupe can also be used to separate natural from synthetic and possibly detect some treatments.

Your expertise, and just a few instruments that can fit in a pocket, will enable you to identify many rough gemstones in the field.

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Students gain the practical experience needed to succeed in the jewelry industry in GIA's Lab classes. These classes also provide the perfect opportunity for those already established in the trade to refresh important gemological skills. Register today. Space is limited.

Please note: A CAD/CAM for Jewelry Lab class, beginning April 28, has been added to the GIA Carlsbad schedule.

GIA Lab classes offered through May are:

So what are you waiting for? It's time to put a spring in your career! Apply online, e-mail GIA Education or call (800) 421-7250, ext. 4001, for more information. Outside the U.S., call
(760) 603-4001.

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