• Industry Analysis: Retail Difficulties to Continue
• From Gems & Gemology: Black Diamonds Colored by Hydrogen Clouds
• Carlsbad Career Fair, Open House Set for Sept. 12
• Russell Shor Honored with Prestigious Journalism Awards
• Researchers to Deliver Keynotes at World of Gems Conference
• GIA Lab Classes -- Participate. Practice. Perform.

Industry Analysis: Retail Difficulties to Continue

Retail analysts predict that the worsening economy will claim additional store chains, possibly including some jewelry operations, before the end of the year. This is in marked contrast to the early 1980s, when manufacturers and wholesalers bore the brunt of the economic woes.

The jewelry industry, which traditionally has outperformed other retail categories during difficult economic times, saw the recent Chapter 11 bankruptcies of several major chains: Whitehall, Friedman's, Fortunoff and Samuels, with Whitehall and Friedman's going into liquidation. While some retail jewelry chains have filed Chapter 11 in the past, liquidations were extremely rare.

This year, however, a number of new factors are involved. First, many banks are facing financial pressures of their own in the wake of the sub-prime mortgage meltdown, so they have been much more aggressive in collecting cash from risky or delinquent accounts. Banks also have become extremely conservative in granting credit extensions.

Second, jewelry is no longer the "constant" it was in previous decades. At the higher end, sales of unbranded "generic" jewelry are losing out to more distinctive pieces -- designer jewelry was one of the few bright spots at the recent Las Vegas and New York shows -- and to the Internet. Although Blue Nile experienced its first-ever quarter-on-quarter decline in sales (5% in the U.S.), the company remains highly profitable. And, analysts say, these bankrupt stores also lost share to chains such as Signet (Kay Jewelers), Helzberg Diamonds, Ben Bridge and others that have done much better marketing and been more flexible in responding to competition -- for example, moving away from the lowest end, which Wal-Mart and other mass merchandisers have captured.

Third, the 2005 changes to U.S. bankruptcy laws have made it more difficult for companies filing Chapter 11 to remain in business, according to a Business Week report. The law now requires companies filing Chapter 11 to pay utilities and other types of creditors in cash, imposes an 18-month deadline to submit a restructuring plan (previously there was no limit) and gives them 210 days to decide whether or not to keep their store leases. This has created untenable conditions for companies short on cash, according to the Business Week article.

DIAMONDS: The Aug. 18-22 Diamond Trading Company (DTC) sight is estimated at $750 million, similar to the July allocations. At the opening of the sight, however, the DTC announced average "cumulative" price increases of 16% on rough diamonds. The DTC also acknowledged what the diamond trade has been saying all year: that the increases have been weighted heavily on larger, better-quality stones.

The DTC statement said the price increases were "sustainable" in the long term because consumer demand has been "strong and continuing, especially in the larger goods."

In Sierra Leone, a U.S.-led attempt to establish diamond mining and marketing cooperatives is an apparent failure, according to Partnership Africa Canada (PAC), a non-governmental organization that monitors African diamond affairs.

PAC's report said that between 1999 and 2005, the five cooperatives funded by the Integrated Diamond Management Program, under the U.S. Agency for International Development (USAID), produced 320 stones weighing a total of 60.37 carats, which were valued at $4,390.

The report said there were many reasons for the failure in Sierra Leone, including USAID's withdrawal of funding for most of the cooperatives, the working of sites with unproven diamond resources, the lack of mining expertise, delays (the country's civil war had not yet ended when the program began), theft and weather problems.

The USAID initiative, however, is only one of several designed to improve working conditions and compensation for African diamond workers.

COLORED STONES: News reports from Myanmar indicate that trade in jade, ruby and sapphire remains as strong as ever despite the new U.S. law banning imports from that country. Buyers from China, Thailand, India and Russia remain unconcerned about the embargo, and continue to have strong demand for Myanmar goods. Official sales of Myanmar gems total $300 million to $400 million per year; jade represents 75% to 80% of that amount.

Russell Shor
Senior Industry Analyst

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Figure 1. The black color of these diamonds (2.69 ct and 2.72 ct) was caused by dense inclusions of hydrogen clouds. Photo by Jian Xin (Jae) Liao.

Figure 2. The symmetry of their DiamondView images indicates that the two black diamonds were cut from the same crystal. Photo by Jian Xin (Jae) Liao.

From Gems & Gemology: Black Diamonds Colored by Hydrogen Clouds

Paul Johnson of the GIA Laboratory in New York submitted the following entry to the Gems & Gemology (G&G) Lab Notes section.

The vast majority of black diamonds submitted to the Laboratory have been treated by high-temperature heating in a vacuum. These stones are usually opaque and heavily fractured. Black graphite inclusions, induced by heating, block light transmission and cause the host diamond to appear black.

Recently at the GIA Lab in New York, we examined two cut-cornered rectangular brilliants, weighing 2.69 ct and 2.72 ct, that were submitted at the same time. Both were color graded Fancy black (figure 1), but unlike treated black diamonds, these two stones were transparent to fiber-optic illumination and contained numerous dense hydrogen clouds but no evidence of graphite inclusions. A strong 3107 cm^-1 peak, attributed to hydrogen, was visible in their mid-infrared absorption spectra. After nitrogen, hydrogen was the most common impurity in these diamonds and was responsible for the natural black color.

The two diamonds were almost identical, and we suspected that they had originated from the same crystal. This was supported by DiamondView images of the two stones, which showed striking almost-mirror-image butterfly structures in the center of their table facets (figure 2).

The distribution of these symmetrical hydrogen clouds throughout the crystal was concentrated in the cubic growth sectors of the diamond lattice. The tables of both diamonds were cut and oriented parallel to the cubic crystal face direction, resulting in the butterfly images that indicated their origin from the same piece of rough.

The grading reports issued for these two stones stated that they had a natural origin of color.

For more of the latest from the GIA Lab, read the Lab Notes section in every issue of G&G. To subscribe, 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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Recruiter Marc Perez (right), from Saks Fifth Avenue, talks with a job candidate at the 2007 Jewelry Career Fair. Photo by Eric Welch.

Richard Horne, president of Shreve & Co. Jeweler, Ltd., was one of the speakers on the 2007 Carlsbad "Working to Win" panel. Also pictured, from right of podium: Frank Dallahan, Erica Courtney, Kalpesh Jhaveri and Donna Baker. Photo by Eric Welch.

Carlsbad Career Fair, Open House Set for
Sept. 12

GIA's West Coast Jewelry Career Fair and Open House will be held Sept. 12 from 8:30 a.m. to 3 p.m. at the Institute's headquarters in Carlsbad, California. Registration begins at 8 a.m. This free event, the jewelry industry's premiere recruiting opportunity, brings together highly skilled and trained job seekers, prominent employers and gem enthusiasts.

At Career Fair, attendees can get one-on-one career coaching with established professionals, attend professional development seminars and network with key executives and entrepreneurs who have shaped the industry.

This event is open to anyone interested in pursuing or learning about a career in the gem and jewelry industry. At least 28 companies, including Tiffany & Co., Zale Corp. and Ben Bridge Jeweler, will showcase exciting employment opportunities and conduct preliminary interviews with job candidates.

GIA is also hosting its annual Open House -- an opportunity for visitors to view Museum displays such as the "Balboa Park Carousel Egg" and the Facets of GIA exhibit, and see classroom demonstrations. The Open House gives visitors a chance to see the Institute's campus and exhibits without booking a tour in advance.

GIA hosts two Career Fair events every year: in the summer in New York and during the fall in California. GIA's Jewelry Career Fair was founded by GIA and The Jewelers 24 Karat Club of Southern California. The prime sponsor for the New York Career Fair is The Nielsen Jewelry Group, and the prime sponsor for the Carlsbad event is The Jewelers 24 Karat Club of Southern California. The JCK Publishing Group is also a sponsor of the Carlsbad event.

Employers who would like to recruit at the Carlsbad Career Fair may contact GIA's Career Services office at (800) 421-7250, ext. 4195, or e-mail Dani Oliver. Job seekers may RSVP for this event by calling GIA's Jewelry Career Fair hotline at (800) 421-7250, ext. 4100, or e-mailing careerfair@gia.edu. For more information, visit careerfair.gia.edu.

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From left: Ruth Batson, executive director and CEO of AGS; Russell Shor, GIA senior industry analyst; and Mark Moeller, president of AGS. Image courtesy of AGS.

Russell Shor Honored with Prestigious Journalism Awards

Russell Shor, senior industry analyst at GIA, has been honored with two prestigious journalism awards: the American Gem Society's annual Richard T. Liddicoat Journalism Award and a 2008 Magnum Opus Award.

Shor earned the Liddicoat Journalism Award in the "Trade Journal" category for his Fall 2007 Gems & Gemology feature "From Single Source to Global Free Market: The Transformation of the Cultured Pearl Industry." He was honored at the AGS Ninth Annual Circle of Distinction dinner in New York City on July 29.

The Liddicoat Journalism Awards were established in 2003 in remembrance of the "Father of Modern Gemology." They were designed to honor journalists who have upheld the AGS ideals of ethics, knowledge and consumer protection, while making exceptional contributions to the understanding of gemology and the jewelry industry.

"We are proud to honor Russell for the significant contributions he's made as a trade journalist," said Ruth Batson, executive director and chief executive of AGS. "This award recognizes the highest level of excellence and professionalism in journalism."

Shor was recognized with a Liddicoat Journalism Award in 2006, as well.

Shor also received a 2008 Publications Management Magnum Opus Award, a competition judged by the Missouri School of Journalism. He received the gold award in the "Best Regularly Featured Department, Section or Column" category for his Market Viewpoint column, which appears in GIA's quarterly news magazine, The Loupe: GIA World News.

This is the second year in a row Shor has won a Magnum Opus Award in this category.

"We are thrilled to have Russell recognized for both of these prominent awards," said Donna Baker, president of GIA. "Everyone at the Institute is proud of the many contributions he's made."

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Dr. James Shigley. Photo by Melissa Jacobs.

John I. Koivula. GIA file photo.

Researchers to Deliver Keynotes at World of Gems Conference

Dr. James Shigley, GIA's distinguished research fellow, and John Koivula, chief gemologist for GIA's West Coast Identification Services, will be keynote speakers at the inaugural World of Gems Conference, which will be held Sept. 13-14 at the Hyatt Regency O'Hare in Chicago. GIA is a premier sponsor of the conference.

The Chicago gathering will introduce a variety of timely topics affecting gemology and the gem and jewelry industry, said Koivula, noting that GIA's own Gemological Research Conference will be held Aug. 21-23, 2009, in San Diego.

Koivula will kick off each morning with 30-minute presentations that address characteristics and unusual features of the gems featured that day. Ruby, pearl and sapphire will be highlighted on Saturday; emerald, diamond and a GIA Laboratory update will be the focus Sunday.

"My talks are always visual in nature and stress observational techniques utilizing a properly equipped gemological microscope," Koivula said. "Inclusions and other micro-features that characterize the various gems under discussion will be the main focus of my two speeches."

Shigley will talk about several aspects of gem identification and give an update on gem materials that have recently come into GIA's Lab.

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Students gain the practical experience needed to succeed in the jewelry industry in GIA's Lab classes. You can take a Lab class on its own, or as a part of your GIA diploma program. These classes also provide the perfect opportunity for those already established in the trade to refresh important gemological skills. Lab classes are offered at each of GIA's campus locations and in various cities throughout the world.

Please note: The Los Angeles campus will close at the end of the year. Take advantage of taking Lab classes there through Nov. 14.

Space is limited. Enroll today.

GIA Lab classes offered through October 2008 are:

Apply online, e-mail GIA Education or call (800) 421-7250, ext. 4001, for more information. Outside the U.S., call (760) 603-4001. For a complete Lab class schedule visit the Education section of the GIA Web site.

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