GemThoughts

De Beers has a superb history of managing the diamond business and the public perception of diamonds.  No one will ever do it better.  The two parts of its business - mining and marketing - have over long years evolved into the distinct positions they now hold, neither of which give the company very much breathing room. While that might sound drastic - and we are not looking at any imminent change - the outlook for the status quo is not promising. On the mining side, we have all been aware for a while that no mining company is excited about the future.  BHP sold out; Rio Tinto tried, but could not find a buyer who would take on their huge investment in going underground at the Argyle mine.  Never mind that mining companies want no part of the bad publicity involved in operating in some countries. And where is De Beers?  They continue to be a dominant supplier, and that will not change soon.  But, just before the Oppenheimers sold out, they signed a n...

The recent trade shows and recent press reports offer a spectrum of opinions and a range of actions in and around the diamond business that leaves a distinct sense of a train hurtling uncontrolled down a track.  No derailment (as yet) in sight, but enough clatter to cause concern. Some facts are clear: De Beers, now not totally free to act as it wishes, and now with a new CEO who comes from the mining sector, is all-in with Forevermark.  This is their future. and either it flies or they may be done, at least on the marketing side of diamonds.  Or is there another future possible? Two major mining companies, BHP and Rio Tinto,  are working to extract themselves from diamond mining, with some success.  Nominally, it is because there is not enough scale in diamond mining, or the outlook for it, to make the investments worthwhile.  BHP has made a sale, Rio Tinto has now backed off, as it could not find a proper buyer.  The banking industry is broad...

I must apologize for being 'off the radar' for these past weeks, as a series of events have preoccupied me and precluded me from stopping long enough to give this blog some thought.  Nothing bad at all, though, just concentrated activity. Among that, of course, was attending the shows in Las Vegas.  This year I had the need to work intensively with a large number of vendors at the Luxury, JCK and Couture shows.  It was an exhausting (as usual) few days, but filled with timely conversation.  In sum, after years of tight economic conditions, high gold and diamond prices, and growing shortages in fine colored stones, the industry is showing its ability to adapt, or not. Some vendors have really come through with well thought out lines that are innovative and address market realities.  At the high end, in fine non-bridal lines, we saw excellent use of 18 karat gold with diamonds and color.  In silver, designs have greatly improved, as has quality, and pric...

Last month I covered five market trends that I view as important for this year, and no doubt for years to come.  I have five more here that I see as part of the rather remarkable transition that this industry has sustained over the years.  The ten trends are not ranked in importance.  It will be different for each of us. 6.  Social media.   The power of social media, in its now countless manifestations, cannot be underrated.  We are awed by its power in spawning the Arab Spring, raising money in response to disasters, or electing a president.  No doubt it has hit a nerve - 500 million users of Facebook is not an accident.  There are definite efficiencies in communication, presuming one wants to send brief notes to dozens or hundreds of people at the same time.  I, for one, use Facebook, Twitter and LinkedIn to tell people that I have written a blog.  That notice is better transmitted that way than by e-mail, say. Nevertheless, I mus...

We enter a new year and for many people that means getting on with business in pretty much the same way that they approached prior years.  It is business as usual.  And, to some degree, that is true.  Retailers will review their sales results and plan on deletions, additions and solving persistent problems, like gaps in price points.  Suppliers will want to find new ways to tweak old standby's and turn new materials into innovative products.  But everyone will be scratching their heads trying to figure out where our industry is headed.  There are many market conditions inundating us, but here are five of my top ten for the coming year. 1.  The Millennials are coming .  More and more of our business is shifting from boomers to millennials.  And with that has come a shift from brand to concept.  For years we have heard of the importance of creating a brand or image.  All industries have pushed to create or enhance their brands, bu...

 There is no question that manufacturers and retailers have been contending with difficult product decisions for a couple of years.  Foremost has been the price of gold, which has made made some hot products of the past into things of the past.  An Italian gold chain manufacturer pointed that out to me in describing where his business has gone.  At one time he cranked out tons of gold as machine-made chain, but that has essentially disappeared.  Italy now has perhaps six companies left that are making machine-made chain, and most of that is silver - 90% in his case. OK, one might say, that is a reality, but at least consumers are buying silver chain.  Is that all there is to it?  Exchanging gold for silver, or steel, or titanium, or rubber?  I think not.  No doubt that retailers need to fill price points, and some have stated that silver has been a huge help.  But are more profound changes happening?  No doubt. Uni...

'Tis the season for taking shots at just how the holiday season will turn out.  Some interesting news items and a look at a few guesses about the season: *  The number of jewelry retailers in the United States continues to decline, by 2.5% last year, according to JBT.  There are now around 22,000 jewelry stores in the US.  (The number of manufacturers and wholesalers has also declined by a few percent.)  At one time a couple of decades ago there were more than 30,000, and further back, 40,000.  Back then, the US population was much smaller, so by rights we should have seen growth - if the business model was viable.  A part of that decline can be attributed to the nature of the business.  Family run, they present very little "cash out" options other than liquidation when owners seek to retire and there is no younger generation stepping in.  Would you pay millions to buy a single store retail business?  And work long hours and long week...