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Platinum jewellery sales in the US declined by 7% YoY in Q4 2022

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State visit highlights the successful partnership between the Antwerp diamond sector and South Africa

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Gemfields boosts revenue in 2022 despite macroeconomic pressures

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Gem Diamonds fails to find a buyer for Ghaghoo mine, faces closure

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Jewelry Industry and Economic Crisis

24 november 2008

So far U.S. economic experts basically avoid calling the current situation a recession pointing to the fact that some indicators reflect growth as usual. However, in any case there is a deep financial crisis on hand, which significantly affects business in the jewelry industry.

In the first place, this comes to the fore on the U.S. market, the largest in the world. The consumers’ perception there has changed. The Google Company furnished some curious evidence to this effect. Since this Web searching system is processing hundreds of millions of inquiries on a daily basis, it appears a unique indicator of what is on the mind of Internet users, mostly Americans.

Currently, during the economic crisis inquiries about luxury items are being replaced with questions about more mundane and cheaper goods and services.

“For items like luxury goods, like diamonds, queries are down more recently and there’s been more queries for jobs, mortgages and refinancing,” Marissa Mayer, Google vice president of Search Products and User Experience, told “Good Morning America” in an interview. Instead of luxury cars and exotic trips, the number of queries about public transportation, like the Amtrak rail system, are up.

The Google search for the perfect restaurant is down as well. Questions about recipes, however, are up, Mayer said.

“We have a great site called that actually allows you to search people’s searches,” Mayer explained. “So you can actually see how things are changing.”


Research firm Unity Marketing conducted its regular survey of luxury consumers – the first one since the bail-out on Wall Street. Based on this study, Unity Marketing predicts that these economic events will have a profound impact on the luxury market.

“Few luxury brands are going to weather this global economic crisis with impunity,” says Pam Danziger, president of Unity Marketing.

The survey of consumers having an average income above $209,500 was held on October 3-8.

“Our latest survey of 1,200 affluent consumers shows that the majority of affluents are changing their shopping behavior in response to the current economic climate. In particular they are shopping less often and shopping more strategically by making lists, comparison shopping and doing their research before venturing into the stores. These new shopping patterns are going to put additional pressure on struggling retailers who traditionally have looked to the upper-income shoppers to bolster their revenues,” Danziger said.

Unity Marketing’s Luxury Tracking Study for the third quarter of 2008 shows that the average amount the consumers spent on luxury remained flat from the second to third quarter.  However in 15 out of 21 product and service categories, the average amount luxury consumers spent rose in the past quarter.

Danziger said this “indicates that affluents are buying luxuries more selectively and more carefully.  They are still spending - and spending quite generously - on those choice luxury items they decided to splurge on, but they are splurging on fewer items overall.”

For the coming fourth quarter, Danziger advised, “Because affluent shoppers are staying out of stores to resist temptation, retailers must offer shoppers new in-store experiences they simply can’t ignore, like the cash-back gift card sale going on now at Bergdorf Goodman.”

“Further luxury brands need to look at their product assortment and price ranges, since affluents are widely choosing to buy less premium brands in order to save money,” she said.  So a luxury brand that offers more accessibly priced alternatives can keep their customers from trading-down to another brand.

Brand managers also need to ramp up their marketing to help justify the expense of paying a premium for their brands, Unity Marketing concluded. For today’s resistant affluent shopper, luxury brands need to focus their marketing messages on the quality, value and substance inherent in their brands, rather than on image or status.  In other words, they need to sell the ‘steak’ again, not just the sizzle.


Luxury retailers like Tiffany and Hermès bet big on Wall Street—literally. Now their expensive new stores are expensive empty stores, writes.

A year ago today, the opening of a lavish new Tiffany & Co. on Wall Street was literally accompanied by fanfare - as well as champagne, models clad in the jeweler’s trademark blue, and gift bags containing sterling silver Tiffany Wall Street key chains.

The Dow Jones industrial average was soaring toward 14,000, and the Fifth Avenue stalwart wanted a jolt of Wall Street excitement and some more of those big bonus bucks.

The cost of refurbishing the new store exceeded $20 million, according to sources with knowledge of the project.
In the past few years, Tiffany and tony cohorts such as Thomas Pink, Canali, and Tumi bet big on what they thought was a hot new growth market. Wall Street was flusher than ever, tourists were flocking to the area, upscale residential developments had brought in new local spenders, and the World Trade Center site was being rebuilt.

But the new Tiffany is marking its first anniversary in the midst of a financial meltdown that threatens to take down Wall Street’s retail renaissance. A global economic crunch is choking the wallets of financiers and tourists.

Tiffany not only spent far more than its customary $600 to $900 per square foot rate for build outs. It also built a far larger store than the 5,000- to 6,000-square-foot spaces the jeweler has favored over the last seven years. This year the company has backed off big showplaces even further, stating in Securities and Exchange Commission filings that it plans to focus on 2,000-square-foot shops.

Tiffany trumpets the base of 310,000 workers and an estimated 50,000-strong residential population in lower Manhattan as cause for optimism over the long term. But the financial crisis hits both groups of potential shoppers.
A Tiffany spokesman insisted the company still believes in the financial district. As the company seeks to ride out a slow time for retail in general and Wall Street stores in particular, it has some financial strength to tap. The $2.9 billion firm is profitable, with $153 million in cash on the balance sheet. Sources also said that Tiffany negotiated a bargain rent of around $110 per square foot, compared with the $250 to $300-per-square-foot prices more recent deals likely commanded.

New stores, even those owned by large global companies, generally have a three-year time horizon to break even. Having tied their fortunes to Wall Street, top brass at these stores can only hope it recovers in time.


Though the U.S. economy is suffering in general, there are pockets of the country that have been spared, with some even thriving in the current economic conditions, National Jeweler says.

Mark Sunshine, president of West Palm Beach, Fla.-based financial services firm First Capital, says that just as radio, TV and defense spending did well during the Depression, a number of different U.S industries - and those in their surrounding areas - are benefiting from current trends.
One example is U.S. export-oriented businesses, with the weak dollar making American goods attractive to overseas buyers. This helps port cities, such as Seattle.
In addition, Seattle benefits from the success of companies such as Boeing and Microsoft, says Leo Bernard, owner of Madison Park Jewelers, which is located in a high-end community in the heart of Seattle.

”We actually have been quite busy,” he says. “We are not seeing many of the slowdown effects.” Bernard says he has heard the same from other Seattle-area retailers, though he does acknowledge that the lower end is being pinched somewhat, even in Seattle, but not to the extent that it is in other areas of the country.
Also coming out on the winning end of current trends are companies that deal in commodities, which means big business in Texas and in parts of Corn Belt states such as Indiana, Ohio, Illinois and Iowa.
Thorpe and Co. in Sioux City, Iowa, benefits from its luxury market location where agriculture is king and the high price of corn has warded off any potential economic slowdown, says owner Rusty Clark.
The jeweler also was spared from the recent floods that devastated other parts of the states. In fact, Clark says, his business felt the effects of the economic slowdown when gas hit $4 a gallon.
Now, the store’s sales are more sluggish, though he acknowledges he is probably still doing better than those in other parts of the country.
Clark’s strategy for his high-end store going forward is to “live off” what he’s got, forgo buying new product and pump money into advertising.
M.C. Ginsberg Jewelers, with stores in Des Moines and Iowa City, Iowa, says the floods hit both of their stores, but they have recovered quickly.
Mark Ginsberg says his store in Iowa City is shielded from the national downturn because it is home to the University of Iowa.
He says Des Moines is more reflective of the national economy, but sales at his store there continue to be strong as well due to a concentration on private-label merchandise.
Ginsberg points out that no matter where a store is located, the owner needs to be aggressive about getting customers in the door.
”Those who are waiting for clients to trip over their front doorstep are probably missing out on some clients,” Ginsberg says.
Though pockets of the country are thriving, some jewelers in those areas report that they too are experiencing the well-documented downturn in middle-market business that is hurting so many jewelers.
At Sergio’s Jewelry, which caters to a mid-market clientele in Dallas, Billy Charles says it is repairs that are keeping the store going.
”People are not buying new,” Charles says, adding that Texans are griping about high prices and worrying about their homes, like everyone else.
He says sales began to slow in January. People are still browsing at Sergio’s but they are not buying. “It’s just that people are hesitant.”

Rob Bates, the JCK online’s observer, in one of his recent publications entered in controversy with Varda Shine, Diamond Trading Company managing director. Citing Varda Shine’s speech at the Hong Kong Show he considered her evaluation of the current situation too optimistic. Varda Shine’s major theses were as follows: “Before the Lehman Brothers story broke we had already seen an improvement in consumer sentiment in the US and a strengthening dollar. Despite the challenges, sales in the US have remained steady so far this year … with low single digit falls in terms of retail value.  Some mid cost retailers are finding the market tough; but higher end retailers and high volume-low margin chains are reported to be doing better. Of great importance, the performance of bridal jewellery in the US remains positive. 

Given this backdrop, we don’t see a sudden change in US diamond jewellery consumption and believe the year will end only slightly down on 2007.”

With regard to the situation on various world markets, Varda Shine noted, “Western markets are generally seeing low digit declines, while in other markets, such as China and India, retail sales have mainly held up. We anticipate that the remainder of the year will follow this pattern and 2008 will end at a small value positive.”


This stance is evidently shared by the De Beers management. The company continues to develop its activity on the U.S. retail market. It has announced plans to open three fine jewelry stores in the next few months in Costa Mesa, California, and in Naples and Bal Harbor, Florida. The company aims to bring its U.S. store count to 11 by the end of the year.


New stores are being opened by other biggest jewelry brands as well. However, they give their preference to alternative markets. Tiffany & Co., which recently opened a store in U.S. Pittsburg, is now going to launch a boutique in Berlin’s KaDeWe department store. Berlin will be the fifth German city to host Tiffany stores joining Munich, Frankfurt, Hamburg and Düsseldorf.

Cartier is opening its first store in upscale Cheongdam-dong district of Seoul. The company believes this to be the right time to tap the growing high-end luxury market of Seoul, which shows a very rapid growth.

On the contrary, Bulgari at the same time opens its new Paris store at the corner of Avenue George V and Rue François 1er. Francesco Trapani, Chief Executive Officer of the Bulgari Group, said Paris had always been a key market for luxury goods not only due to French clients, but also because of the great number of tourists flooding boutiques of the biggest brands. At the same time, he promised that Bulgari would continue to cut their expenses and increase efficiency in the run-up to the Christmas season in the United States and Europe.