The Swiss Currency Cap
Over the past week we have delighted in the magnificent timepieces that were shown at SIHH. There was however an Elephant in the trade show room – the Swiss currency cap, or now the lack of it.
The Back story. Two weeks ago, The Swiss National Bank (SNB) said the cap, which was introduced in September 2011, was no longer justified. It also cut a key interest rate from -0.25% to -0.75%, raising the amount investors pay to hold Swiss deposits.
This move has been described as a “tsunami of pain” for the Swiss watch industry – which incidentally is one of the key “homegrown” money making industries in Switzerland. The decision to remove a cap on Switzerland’s local currency has resulted in backlash from a number of Swiss watch and jewellery companies, with reports emerging that prices for goods could rise significantly. Although reports that orders have been cancelled as a direct result of the removal of the cap are yet to be substantiated.
So why the outrage? Following SNB’s announcement, the value of the Swiss franc soared to record highs of more than 30 per cent compared to the euro, thus placing significant pressure on anyone who is trading using Swiss Francs. The news also resulted in a 10% or more drop in share price for companies including Swatch Group and Richemont, the parent company for luxury brands Cartier, Van Cleef & Arpels, Montblanc and IWC Schaffhausen.
Why did the SNB lift the cap when they had to know it would cause a colossal backlash? Initially in 2011 the cap was introduced to manipulate the exchange rate. Now nearly 4 years later the SNB said that the cap had become unsustainable. Furthermore SNB Chairman Thomas Jordan said “If you decide to exit such a policy, you have to take the markets by surprise.” Eventually of course, the Swiss Franc will find its equilibrium and exporters will adjust to the currency’s “new normal”.
However, one worry is that the long term effects are an inevitable increase in watch prices, which will undoubtedly hurt sales in Asia. As a price increase will put Swiss watches out of reach for many Asians. However, it is not all bleak, given that demand in mainland China weathered the anti-graft campaign, the impact from a higher price there will hopefully be limited. As it removed the upper limit on the currency, the SNB sought to discourage new flows into Swiss francs by pushing down its interest rate on some cash deposits held at the central bank by commercial banks and other financial institutions.
One thing is clear, is that out of the abundance of speculations both substantiated and unsubstantiated, the gossiping and the scaremongering over the aftermath of lifting the Swiss currency cap – in the long term, only time will tell how much this move will affect the Swiss Watchmaking Industry. But one thing is for sure – it will be affected.
SIHH 2015 – the most opulent trade show you’ve never heard of.
This week Geneva played host to the 25th annual Salon International de Haute Horlogerie (SIHH), the first major event of the year for the wristwatch industry. This is the first glimpse of the watches that will be in fashion in 2015. Only 16 brands show at the invitation-only event, the 13 owned by luxury conglomerate Richemont and three high-end independent brands that opt for the gentility of SIHH over the Baselworld show that takes place each March. There are literally hundreds of watches unveiled at SIHH in a matter of days. A real smorgasbord for the collectors eye, from the simply divine and understated creations from Lange & Sohne and Cartier – to vintage from Panerai and the supremely eye catching creations from Greubel Forsey. The entire show from the food served, the décor within, to the ball gowns worn by some of the women working at the show, is all designed to leave an impression of the highest opulence, luxury and exclusivity when you think back upon this event.
Happy New Year! Now we’ve said goodbye to 2014, perhaps it’s time to reflect on what a great year for the Jewellery industry it was. From headline grabbing coloured diamonds being unearthed (blue ones in particular), to the world’s most complicated watch – the The Supercomplication, made by Patek Philippe, being sold at auction for a whopping 20.6m Swiss francs (£13.4m) , to technology becoming wearable in the form of the iWatch. Controversy, as always was abound, with the arguments of diamond grading still raging, to platinum pricing coming into question and those pesky lab grown diamonds still causing a stir, or indeed still no final agreement on what to refer to them as; synthetic, lab grown, engineered, who knows? But one thing that we can all agree on, is that there never is a dull moment.
With so many reports to pick from I was spoilt for choice, here are those few that really stood out for me: marked its 175th anniversary with the release of the limited-edition Grandmaster Chime. This was to be the Swiss brand’s most complicated and elaborate timepiece to date. The 18-karat gold wristwatch costs $2.6 million, and features six new watchmaking patents and 20 complications, among them a leap-year cycle, moon phase and second time zone.
2, Auction records were broken at different times throughout the year, but the Christie’s sale of a 13 Carat Blue diamond, which garnered a cool $24 Million, really stands out for me. The stone, accompanied by a letter from GIA, said it was the largest fancy vivid blue the lab had ever seen. It was described by jewellery specialist Jean-Marc Lunel as “absolutely pure externally and internally. It is almost a dream.” It was bought by Harry Winston who immediately rechristened it, the Winston Blue.
3, 122.52 Carat Blue Diamond Found at Cullinan dubbed the Big Blue. This hit headlines all around the world. In June a 122.52 ct. blue diamond, the size of a walnut, was discovered at the Cullinan mine in South Africa. This unearthing got everyone excited, not only because it was the size of a paper weight, over 100 cts. But the rarity of Blue diamonds made this a truly significant find.
4, Gemfields unveiled a 40-carat ruby from Mozambique. Gemstone miner Gemfields discovered a 40.23-carat ruby–which it has called “one of the most important rubies unearthed in recent times”–at its Montepuez ruby deposit in Mozambique. The coloured gemstone miner, which also owns the largest emerald mine in the world at Kagem in Zambia, said it expected the ruby to be sold at auction in Singapore next month, its second ruby auction of the year.
5, Purple Orchid diamond, weighing 3.37cts. and worth $4 million was unveiled in September. After four months of meticulous polishing to bring out its radiant orchid colour – which happend to be the Pantone Colour for 2014 — the cushion-shaped stone went on display to the public for the first time, by Leibish & Co. of Ramat Gan, seat of Israel’s diamond exchange. This particular gemstone came from a mine in South Africa, one of the only mines where purple diamonds can be found in the world. Founder and president Leibish Polnauer. “There are very, very few diamonds on the market above 3 carats with purple as the main colour, which is what makes this exquisite diamond so rare.”
6, The Rhino Ruby. By far my favourite story of 2014. The ruby in questions was dubbed the ‘Rhino” for the The Gemfields’ auction of predominantly higher-quality rough rubies from its Montepuez mine in Mozambique, which totalled $43.3 million, a record total for the company which was propelled by the sale of the rare ruby it recently found. At the sale, Gemfields found a buyer for the 40.23-carat rough ruby it had only uncovered a few weeks prior, for an undisclosed amount. To recognize the successful sale of the gemstone, Gemfields said that it will support the anti-rhino-poaching aircraft operated by Game Reserves United by covering a significant portion of its flying costs for the 2015 calendar year.
May I take this opportunity once again to wish you and yours a very Happy fortune filled 2015.
In this, the busiest time for sales of the year – there is still room to maximise profits with add-on sales. According to hosted e-commerce solution provider Shopify, 30% of consumers will make an additional, last-minute purchase when offered an item that complements what they’ve already decided to buy.
Add-on sales represent a significant source of revenue and profits to a company. The add-on sale is generally suggested by the salesperson once the buyer has made a firm decision to buy and is sometimes known as “upselling.” Christmas Day falls on a Thursday this year – so Super Saturday (the last Saturday before Christmas) has a further four days of selling after it, which is a great opportunity to really maximise those profit margins!
A few tips for accomplishing add-on sales and maximising profits for silly season 2014!
- Remember that once your customer has made a decision to buy, their wallet is open, they are in the mood to spend, and additional purchase decisions are much easier.
- For best results, mention the add-ons before the sale is completed, but after the major purchase decision has been made.
- If you’re offering products or services your customer needs, recognize that you are actually helping them. Try to increase the amount of every sale through helpful upsell and cross-sell offers.
- Offer relevant add-ons to your customers based on what they are buying from you there and then or their past purchase history. Think about Amazon, every time you buy something from them a few items titled “you might also like” and “other customers purchased” pops up.
- If you’re selling online, suggest available options and accessories right on the order confirmation page. You can also use a redirect after the transaction is completed and processed to send your customer directly to a “thank you” page where you can upsell or cross-sell.
- Make absolutely sure that whatever you offer your customer is adding value to their original purchase. As a happy customer will come back.
The best time to sell to your customer is when they’re already in a “buying mood.” Remember, if you’re not upselling and cross selling right now, you’re missing out on extra sales that you could be adding to every single order.
A story that was covered in this week’s Thank TheGembank.com it’s Friday “The best ways to handle online complaints.” talks about a very real problem that all businesses face, and unfortunately it’s the smaller businesses that are mostly affected by this.
This week a hotel hit the news because it charged its customers £100 on their credit card for leaving a negative review of their nights stay on Trip Advisor. As it happens the customers were genuine and had a genuine gripe about their stay. Yes, perhaps there is a better way of handling customer complaints online – as this medium is where British customers are venting their anger more often and more venomously than any other country in Europe.
But this seemingly innocuous news story has opened up many a debate. Should customers have the right to complain online without first seeking out somebody in charge and trying to get their complaint dealt with, before potentially causing irreparable damage to a business? Should extreme negative online reviews be removed until they can be dealt with by the establishment in question – and if so, would this limit not only our right to freedom of speech? Or even worse – curb our fledgling passion for complaining – albeit facelessly.
On a more serious note, internet trolls are also a very real threat. The reason why anybody should take it upon themselves to become an internet troll are unclear. And yes it is illegal to troll, with some of the extreme cases being taken to court. But yet to feed into the news is trolling against businesses, especially small businesses. In fact companies are being created to aid small business in this very matter. Imagine, if you will, a small business for some unknown reason being targeted by an internet troll. Unfounded vitriol is spewed not only directly onto the small businesses website but onto other review sites. Understandably the first response is to reply and take on the troll online. However this only serves to play into the troll’s hands as this brings more traffic to the post, thus moving it higher and higher up the scale, with more and more people reading it and unfortunately taking note of the negative things that are being said.
I mention this not to be a scaremonger, but to highlight a potential problem. And while there doesn’t seem to be a definitive answer on how to deal with this business trolling. By talking about it, ideas on how to deal with it may come to light.
A story that was covered in this week’s Thank TheGemBank it’s Friday was “Rapaport Calls Diamond Overgrading “Significant Threat” to Industry – and it poses the question; can diamond dealers and retailers be trusted to sell honestly graded diamonds?
Honesty is imperative in business, especially one such as ours where much of our trading, certainly where diamonds are being sold at consumer level, is built on trust. If only one diamond dealer or jeweller’s business practice was brought into question in this way, and the public found out about it – it could bring into question the entire industry. And once trust is lost, it can be difficult at best, and impossible at worst to win back. So yes, everybody has to be trusted to sell honestly graded diamonds, if nothing else but to protect the integrity, respectability and credibility of our industry.
Trust and honesty is also the foundations for best business practice. The value of honesty in business has obvious implications. Asking who benefits from business honesty can explain why propriety is so very important. For the consumer, the advantage of honesty is unquestioned trust. For staff members, honesty and best business practices go hand in hand, it inspires loyalty and aids motivation. Of course, by following principled and responsible business practices, because it is simply the right thing to do, is as essential as practicing ethical behaviour for the positive consequences.
Unfortunately – at least according to the Rapaport, there are some unscrupulous diamond dealers and retailers who think nothing of using a third-party diamond grading report to overstate the colour and clarity of the diamonds they sell. And the report goes further suggesting that this practice is more common than we would like to think.
So I think the question, of “can diamond dealers and retailers be trusted to sell honestly graded diamonds” – is moot because, lest we want to bring into question our entire industry then we simply have to sell honestly graded diamonds. Any other way of doing business should not be tolerated.
Small pockets of tinsel are arriving surreptitiously in the shops – it can no longer be ignored, Christmas is coming. And as we have just watched the fashion trends for Spring/Summer 2015 unfold on the runway, it may be pertinent to now take a closer look at the trends that consumers will be spending their money on for the next few months – this is the buying season after all!
As always there is a huge diversity of styles and vibes – but big, bold and vibrant gemstones run across all trends this season. In fact there is an oversized predisposition that is given to all jewellery in general. Steampunk and Victoriana are also very big – which come in heavy metals, copper, brass and gold.
Chokers, are very on trend, and already appearing at every price level. Again there is nothing delicate with this style, the chokers are either very bulky, and adorned with vibrant coloured stones or they can cover most of the neck and décolletage.
Where do you gain your inspiration from when you are starting to design a new piece of jewellery? The chunk of precious metal that is waiting to be fired, cut, hammered or polished in any fashion that you desire? Or the stone, which has already been cut by master cutters to show each stones personal magnificence and radiance? Why not take a pointer from some of the world’s best jewellery designers? And start the same way as they do – with the stone.
At Harry Winston, they believe that no two stones are alike. And that each gemstone must be chosen for its nature and distinctive beauty. Only then do the designers and master craftsmen at Harry Winston fashion the setting.
David Morris fine jewellery, whose clients range from royalty to the Hollywood glitterarty, also start their designs by first choosing the stone. This is nothing new with them, in 1996 Morris stated that each gemstone’s inherent characteristics is the inspiration for his design process.
Laurence Graff – who travels the world’s auctions buying the some of the most spectacular stones. Also start the design process after having sourced the perfect gemstone. And of course Laurence Graff’s famous ruby ring was designed around the amazing ruby that is the rings centrepiece.
However, not all designers within the jewellery trade have the luxury of attending Sotheby’s and Christie’s auctions around the world to source their stones. Nor do they have a vault ready in their workshop jam-packed with gemstones of all shapes, sizes and colours. But what all clients of the Gembank do have, is access to our stock. We have already travelled the globe to source the most beautiful gemstones. And because of this, we do have a jam-packed stock, with every conceivable colour, shape and size of gemstone, waiting for your perusal, so that the stones can be the conduit for your inspiration.
Plus, by designing jewellery before choosing the gemstone, the process from beginning to end can be more time consuming, because it can be difficult to find an exact size, weight and colour match when the setting is already created. It can also be more costly too. In man hours trying to source an exact stone, or by having an already cut stone, re-cut and shaped to a settings specifications.
Weather you believe the same as the Harry Winston craftsmen do, in that each stone has its own nature. Or you believe that stones are waiting for the perfect setting to show them in the best light, let the stone speak first. Let our gemstone collection be your muse. Gain inspiration for your designs by first looking to the gemstone and letting it stimulate and encourage your creativity.
Beautiful blue Sapphires have been sought by man as a precious gem stone throughout history. So to imply that they are back in vogue in 2014 is a bit of an oxymoron. Perhaps it is more accurate to say that for the past 40 years or so fewer people have been purchasing blue sapphires, but now that lull has passed, once again putting sapphires into the forefront of the consumers’ minds.
As you already know, white diamonds have had a strangle hold on jewellery since that famous De Beers campaign slogan “diamonds are a girl’s best friend”. Although the white diamond is certainly the most sought after of all gemstones, something which I can’t see changing any time soon, people are once again seeking out pops of colour to bring more character and individuality into their jewellery. And of all of the coloured gemstones, the stunning blue sapphire is the most popular.
Blue sapphires’ resurgence has been gathering momentum for at least ten years. The main source of this gemstone’s recent attraction started again when Kate Middleton was given her engagement ring – an oval blue sapphire surrounded by white diamonds. When something has the royal seal of approval the public duly follows. Within three months the American glitterati had picked up on the trend. Penelope Cruz’s engagement ring also having a large blue sapphire as the centre stone of her ring was the first of many stars choosing alternatives to white diamonds as the centre piece for their jewellery. Thus paving the way for other people around the globe to start choosing the blue sapphire over the white diamond.
Sapphires are also extremely versatile – they are second only to the diamond on the Mohs scale and their use will go as far as jeweller’s imagination will allow. Sapphires of every shape have been utilised in so many ways – heart shaped sapphires have been used in rings as well as earrings. Also, Baguette shaped sapphires have become very popular perhaps due to rise of vintage, specifically art deco style jewellery, in earrings and rings.
Some consumers may be surprised to find that the sapphire not only comes in many different shades of blue but other colours too. Pink sapphires, green sapphires, yellow sapphires, white sapphires, purple sapphires, brown sapphires and red sapphires are all once again being requested by the consumer. But as the fascination for this stunning gemstone gathers momentum so does the public’s thirst for knowledge. Many couples are now concerned with not only the type and colour of stone they are choosing for their jewellery but the meaning behind it. Blue sapphires are not only the birthstone for September and April but they are also a symbol of protection, good fortune and spiritual insight. It has been worn and used as a symbol of power and strength, but also of kindness and wise judgment.
This gem of gems has made a welcome comeback.
For nearly 75 years white diamonds have dominated the jewellery industry. This is due to a very clever marketing campaign by De Beers during America’s “Great Depression” in the 1930’s. Engagement rings at this time were hardly ever bought, due to them being a luxury and that they simply were not the “done” thing. Of course to a diamond cartel, this is not good for business, De Beers needed diamonds to be viewed as a necessary luxury. And so, in 1947 the slogan coined by Mary Gerety, “A Diamond is Forever,” was introduced. Ultimately, the De Beers campaign sought to persuade the consumer that an engagement ring is indispensable, and that a white diamond is the only acceptable stone for the engagement ring. The campaign was very successful. In 1939 only 10% of engagement rings had diamonds. By 1990, it was up to 80%.
This, almost feverish desire for white diamonds, spilled out across the world and into almost every jewellery collection. The popularity of sapphires, rubies and emeralds hit an all-time low in west. Furthermore, the knowledge that diamonds come in an array of stunning colours were lost to the mists of time.
But over the past 12 years the trend tide has started to turn, especially in high jewellery. Where once there was a sea of ice white diamonds, pops of colour are emerging. Consumers are once again seeking out sapphires, rubies and emeralds to add individuality and liveliness to their jewellery. And the knowledge that diamonds don’t just come in the white, but a variety of colours is slowly becoming more wide spread.
Pink diamonds are currently the most popular of the fancy coloured diamonds. This ultra-rare gemstone came into the public eye in 2002 when Ben Affleck proposed to Jennifer Lopez with a monumental 6 carat fancy vivid pink diamond. Since that day the glitterarty have clamoured to get coloured gemstones in the latest setting for red carpets.
Yellow diamonds are a close second in popularity with many celebrities such as Kristen Bell and Carrie Underwood opting for canary yellow engagement rings. Tiffany & Co have really jumped on board offering coloured diamond solitaire engagement rings now too. Their classic single yellow diamond ring set in platinum was made famous by Kate Hudson in 2005 in her first engagement.
Many jewellers are now recognising that using coloured diamonds and gemstones is a huge asset to their business. Apart from adding a coloured sparkle to a collection, they add profit. Designers in the industry are now looking to use stones that they have never used before to give their pieces distinction and character. For example, brown diamonds, no longer thought be used solely for industrial purposes, have been remarketed very recently and are now referred to as chocolate diamonds, these are very much in vogue and are especially stunning when used with rose gold for the more contemporary look.
I guess the biggest benefit to anyone selling fancy coloured diamonds is that they are much more profitable than selling white diamonds. Perhaps this is why their popularity has taken off so much.
Visit our stock of Natural Fancy Coloured Diamonds to see what we’re talking about.