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Everything Starts With A Stone

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Port in the Perfect Storm

Photo by Russell Shor/GIA

The phrase “perfect storm” is a little over-used, however in this case, in Russia with the combination of a collapsing currency, a collapsing economy and punitive interest rates make it apposite. Coupled with the current vulnerability of Russia with a slow down of the Chinese economy, the Euro weakening about 30% against the Swiss Franc and U.S. Dollar, raising the prices of already costly items even higher – collectively this is resulting in a down turn in buying power and is reducing demand – especially for the buyers who are looking to acquire gems for investment.

However, the Port in this perfect storm is coloured gemstones. Demand for these from consumers, buyers and investors has not waned and only seems to be carrying momentum.
The evidence for this comes from several differing sources. The auctions; record prices being achieved for rubies and sapphires. In the December ruby auction in Singapore, Gemfields achieved an average price per carat of $689 (£438), with total sales of $43.3m from its Montepuez mine in Mozambique. Both figures were records for the London-listed miner and luxury goods specialist. And at the close of 2014, Sotheby’s set a new world record for a ruby when it sold an 8.62ct Burmese stone for 8.2m Swiss francs (£5.4m). The auction house also set a new world record for sapphires at a recent auction in Hong Kong, and next week’s Sotheby’s Magnificent Jewels and Jadeite sale in Hong Kong, is already proving to be very popular, with forecasters predicting records being broken when the final hammer falls.

Further proof in the increased popularity in coloured diamonds can be illustrated by the surge of requests for grading of these gemstones at GIA, the world’s foremost authority in gemmology. “Although coloured diamonds have been around for decades, the dramatic increase in their place in the consumer market in the last decade is unprecedented,” said Tom Moses, senior vice president of GIA Laboratory and Research.

Nicolas Bos, CEO and creative director of Van Cleef & Arpels Coloured stones were one of the key elements of high jewellery. But it’s no longer just celebrities and royalty who are adorning themselves with coloured gemstones. This trend is evident on the high street too, where there is an ever increasing demand for coloured gemstones in engagement rings – as consumers no longer see the trend for coloured gemstones as a flash in the pan. Coloured diamonds yes, but also garnets, sapphires rubies and emeralds in all shapes and hues are being sought to play not second fiddle to a white diamond but instead of.

So let’s buck the trend and make 2015 a colourful port in the perfect storm.

The Apple Watch – Technology versus Beautifully Engineered Luxury

Apple Watch about to hit the streets – yep, not the iWatch.

Apple has now finalised all the details including Apple Watch release date and UK price information.

The announcement was made at the Spring Forward event a few days ago, which was attended by analysts and media and took place in San Francisco. The event shed light on the exact release date for the Apple Watch, as well as the final pricing structure for the various different models on offer. In a nutshell it will be priced from £299 – to the special edition £8,000, with availability from 24th April worldwide.

Already this seems like a marmite product, one half scrambling gripped in a frenzy for Apple’s latest product – the other half, the camp that I am in, are somewhat nonplussed. This will undoubtedly be a fantastic gadget, as all Mac products are, it will work better than its competitors, and will probably be the most bought of this type. But that is where it ends for the latter half of the camp – do we really need this? Is it so hard to reach into our pocket and look at our actual smart phone? And to call it a luxury product is a bit of an oxymoron as technology by its definition is not long lasting, this is not something that can be passed on to the children, it probably won’t last the year, and if it does last a little longer, it will certainly be out of date at the end of year 2, much like my smart phone, which is the same thing without a strap.

I think Apple have missed the point of why people even wear a watch – as we certainly don’t need to. As I sit here and type I can see numerous gadgets that can tell me the time, my computer, the clock upon the wall, my phone and my iPad. As you can see I’m certainly not adverse to gadgets, in fact I love them. But I also wear a watch – why? I think people wear wrist watches because of admiration to craftsmanship, the design and feel. A beautiful, and probably quite expensive watch, is akin to fine jewellery, many can be passed on to future generations, worn for special occasions and admired for years. If we just wanted a watch to tell the time, we would still be wearing digital.

Computers and watches are different – how many times have we seen a Sotheby’s or Christie’s auction where a luxury watch has been keenly fought over – the most expensive watch ever sold at auction last year in Geneva for 20.6m Swiss francs (£13.4m). The Patek Philippe is made from 24 carat gold and weighing half a kilogramme – the Graves Supercomplication was made for an American financier in the Thirties, and took 8 years to complete. And it only tells the time. A computer no matter how fantastic no matter what memory it holds or how many apps it can take, will never be a luxury product. Computers are amazing and they make our world work more smoothly, but as soon as one is created it is out of date. So will the Apple Watch or smart watches replace the wrist watch? No certainly not, it is a fashionable gadget that can be played with for a short while.

In the long term, beautifully engineered luxury will always win out.

The Elephant in the Room

The Swiss Currency Cap

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

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.

cartier cle de cartier greubel forsey GMT black montblanc heritage spirit orbis terrarum

The Gembank – Roundup of 2014

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.

Richard

A Quick Thought… On Add-on Sales

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!

  1. 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.
  2. For best results, mention the add-ons before the sale is completed, but after the major purchase decision has been made.
  3. 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.
  4. 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.
  5. 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.
  6. 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 Quick Thought… On Customer Complaints

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 Quick Thought… On Diamond Overgrading

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.

Fashion Week Jewellery Trends Autumn/Winter 2014

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.

Everything Starts with a Stone

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.

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