GemThoughts

The last two posts covered scenarios that I think are totally possible, even probable, as we move further into a time of declining production of diamonds and increasing production of MMDs - man-made diamonds. Until relatively recently, MMDs were too often the means for people to realize extra profits by deceiving buyers.  Even experts cannot detect MMDs without special equipment, and for years no such equipment was available.  Yes, labs could detect MMDs, but it is very safe to assume that only a tiny percent ever got that far - most MMDs are smaller stones.  In addition, productions were so small, that finding them was more by accident then by a directed search. I recall being told years ago that a New York based lab found MMDs because a major auction house checked all diamonds being auctioned, mounted or loose, as a matter of course.  I have never heard of any other company doing that. Of course, diamond "imitations" have been around a long time.  There...

Last week I posted a blog covering the first of the three tipping points for man-made diamonds (MMD's), moments when MMD's will have dramatic effects on the diamond business.  (If you have not read it, I suggest doing so before going on with this blog.) No sooner had I posted tipping point 1 , when news came out that a very high quality 10-carat diamond was produced by New Diamond Technology, a Russian company claiming that they possess a new process that is far more efficient.  They claim it took them 300 hours to create this stone, which was cut from a much larger piece of rough, over 30 carats.  Let's see, 300 hours is 12.5 days for a 10-carat diamond.  Whether is was a promotional effort of regular production, most miners would love to have a finished 10-carat high quality stone every ten days. Then I read that both Helzberg's and Sam's Club, each of whom address somewhat different market segments, are both offering larger diamonds in pink, yellow and whit...

First off, my apologies to readers of this blog, for not having written for a while.  No, I have not disappeared, just had a busy time for a few months.  But here we are running into the Summer trade shows, so it's time to offer some perspectives! In thinking over the cross-currents pummeling our business these days, I realize that we are but one cork bobbing around in heavy seas.  True, we have issues that are peculiar to the business, but economic, technological and political upheavals occurring world-wide are also making it very difficult to get clarity on where we might be heading. Still, some developments warrant a close look, even if the effects will not be fully felt for a few years.  One that I have written about before is the rise of man-made diamonds (MMD's) in the trade.  In my view, there will be three moments in time when MMD's will reach tipping points, moments when their presence in the marketplace will force us to adapt.  I'll cover tip...

I must admit that a range of activities and diversions have kept me from writing for the last couple of months.  My apologies to those who await my missives with bated breath.  No one has complained, I am sorry to report. But, on the brighter side, maybe it is because everyone is busy with a good finish to the year.  I hope that is the case.  I have heard that to be the case as I begin to attend various year-end parties and meetings.  The pattern we have been seeing for the last few years seems to be continuing, and perhaps intensifying.  Some suppliers and retailers at the higher end of the jewelry market have already had a very good year, while those in the mid-market and lower end continue to struggle. Part of that, of course, is a continuation of a long-standing fact about our industry.  There has always been more capacity to manufacture than there is demand, especially in the mass market.  In an era of growing income disparity, the probl...

I am finally able to return to this blog, and write again.  Normally, summer is slow-paced and a good time to think about what I've heard over the spring.  This summer was different.  Some brief time off (though we are off again tomorrow for two weeks of travel), but also a convergence of personal and business matters. I mention all this because now, as I sit back for a spell and think about the leading issue that has bubbled up again and again over the past months, even in the midst of all the diversions of my own activity, it is the chatter about diamonds.  Colored stones are steadily selling, maybe even going up a bit.  Gold prices have pretty much stalled, which is a good thing, as it allows everyone down to the consumer to acclimate to its present level. But it is diamonds that are a boil.  Retailers are not moving diamonds in volumes that would be indicated by an apparently improving economy.  Retailers are generally reporting very sluggish ...

This is the July 4th week, and it (finally!) affords me the opportunity to sit back in a nicely air-conditioned office and think about 2014 as it passes mid-year.  The jewelry business continues to be roiled by changes that are hard to translate into action plans. The summer trade shows seemed to be well-attended and active.  But orders were smaller than anticipated, especially for mid-market suppliers.  Retailers are buying carefully and ordering less (understandable), but as a result vendors are seeing the costs of exhibiting getting harder to justify.  No industry-wide efforts are being made, or proposed, to market jewelry to the public.  This comes at a time when surveys show that younger consumers are more excited about buying the latest electronics than buying jewelry. Big time consolidation continues.  Sterling buys Zales.  Chow Tai Fook buys Hearts On Fire.  And the head of Alrosa foresees contraction in the diamond sector.  Fewe...

We have been trying to figure out the economic trends in the US and worldwide for a few years now, and it is still a mystery.  The gurus say that we are in recovery, slow as it might be.  They say the US is doing better than many other countries, especially in Europe.  They say the BRICS countries are staggering a bit, not booming as they were for years. All the patter sounds like a clunker.  It just does not sound right.  So what can wee figure out for ourselves? We know that the jewelry business is very much the canary in the coal mine.  When things are not well, jewelry is one of the first to feel the cold wind.  And when the economy is recovering, it is one of the last to feel the warmth of the sun.  We have seen this in recent years.  By mid-year 2007, many retailers were sensing that there was something amiss.  That was an understatement.  Neither retailers nor suppliers have recovered, by a good measure, to where they we...