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IDEX MAGAZINE No. 280 | 21

contents: focus

90 Where is the Kimberley Process headed?Like any 10-year-old, the Kimberley Process (KP) is no longer completely a child, but it is still a long way from being fully grown. Able to act responsibly most of the time, at others it is prone to tantrums and fits. We take a look at where the KP stands a decade after its inception.

92 a decade of failure: the united states and the Kimberley Process requirementsIndustry analyst Chaim Even-Zohar examines the role of the US in the Kimberley Process and takes it to task for failing to act in the manner that he believes it should.

104 musical chairs: Will angola be KP chair in 2015?Albert Robinson looks at Angolas bid to be vice chair of the Kimberley Process in 2014, and ultimately chair of the KP in 2015. But with a history of human rights abuses and political corruption, is the country really suited to lead the KP in its second decade?

110 KP ngos under attacKNGOs and the diamond industry have often been at odds with each other, but the KP was one place that both sectors seemed to be working together. Peter Meeus, chairman of the Dubai Diamond Exchange, however, spoke out against the NGOs at the recent Angola centenary diamond conference, accusing their work of being destructive to an industry that had taken such major steps to clean itself up. Albert Robinson explains all.

116 susPended from business: the central african rePublicAfter dealing with hotspots such as Venezuela and Zimbabwe, the Central African Republic is the latest country to come under KP scrutiny. It was suspended in May, but calls for its suspension originally came back in 2003. Danielle Max tracks a decade of dispute.

92A DECADE Of fAILURE

104MUSICAL ChAIRS

110KP NGOS UNDER ATTACK

22 | IDEX MAGAZINE No. 280

contents

6435

84

80 123

26 letter from the editor by Danielle Max

28 ideX online india oPens bdb service center

30 marKet snaPshotA quick glance at the events of the past month

35 memo

retail et cetera41 retail rendezvous: Pure beauty48 ideX online research:

brand loyalty by Ken Gassman

52 retail bytes60 facets 64 hot trends for fall and Winter

by Amanda Gizzi

66 celebrity choices

Polished 69 Polished neWs74 Polished diamond Prices77 ideX online rough rePort 80 Kashmir saPPhires

by Luigi Costantini

the ideX diamond rePort

84 a Womans eye86 melloW yelloW

by the Gemewizard Team

mining123 mining neWs

128 ProfileArun Shah, Chairman, Ankit Gems Pvt Ltd

130 advertisers list

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A U G U S T 2 0 1 3VOL. 29 No. 280

EDITORIAL DEPARTMENT

EDITOR-IN-CHIEF Danielle Max

IDEX ONLINE EDITOR-IN-CHIEF Albert Robinson

IDEX ONLINE RESEARCH Ken Gassman

INTERNATIONAL CORRESPONDENTS Tamar Katzav, Edahn Golan

COPY EDITOR Robin Miller

ART DEPARTMENT

GRAPHIC DESIGN Alexandra Quinn

PRINTING Meiri

MARKETING DEPARTMENT

SALES ADVERTISING MANAGERS Yaron Barzilay, Osnat Davidov, Anish Kuriakose, Avivit Morhaim,

PRODUCTION & CIRCULATION Helena Dorsht

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Founding Editor and Publisher of Mazal UBracha: Chaim Even-Zohar

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No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the prior written permission of the Copyright owner.

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magazineI N C O R P O R AT I N G M A Z A L U ' B R A C H A


Behind the Timesby Danielle Max

f a Luddite is a person who opposes technical or technological change, is there a word for someone who is simply being left behind by technology?

I am half afraid that if I were to try to find a definition of such a person in the dictionary, I would come across a picture and description of myself.

A number of times in the past, this column has been a very public forum allowing me to admit my failings, as well as letting me trumpet my triumphs. Alas, I have to add yet another failing to the list I am being left behind by social media, and I am more than a little ashamed of the situation.

The sad fact is there really is no reason for me to be so far behind the curve. I actually have a Twitter account (dormant) and a Pinterest account (equally stagnant). Thats not to say I dont spend a lot of time drooling over boards and pictures on Pinterest, as I dream of my life somewhere in the country, spending my days crafting, pickling and making preserves.

In addition, I have started numerous blogs, but my enthusiasm for documenting my life usually wanes after a couple of entries or so.

What makes it even sadder is that looking back at my Twitter history, in May 2009, I tweeted about wanting to increase my social media skills set

However, the real truth of this confession is that in these pages, I have urged companies more than once to up their social media presence and to start connecting with their consumers in a more fun, friendly and accessible way, and all the while, I have been hiding behind my non-active Twitter handle (that would be @daniellemax, by the way).

But no more. I am a woman on a mission. A mission to finally get to grips with social media before I become a social media outcast. The self-promotion game is on. And I hope you will follow along with me.

I would love to hear from you about how you are using social media in your company and how you are looking at different communication methods to

increase your business. Do you think social media is a must, or is it proving to be a hassle without showing any real results?

Please let me know all your thoughts and opinions at [email protected].

letter fr

om

th

e edito

r

I

However, the real truth of this confession is that in these pages I have urged companies more than once to up their social media presence and to start connecting with their consumers in a more fun, friendly and accessible way, and all the while,

I have been hiding behind my non-

active Twitter handle (that would be

@daniellemax, by the way).

Diamond Tower, Suite 470-472 (4th floor) P.O.Box 536, 54 Bezalel St. Ramat Gan 52521 Israel Tel: 972-3-7522200 Fax: 972-3-7522204Email:[email protected] www.dds-diamonds.com HK: 852-5195-9141 Toll free U.S.A: 1-866-6795361


IDEX Online India has officially opened its new Service Center in the Bharat Diamond Bourse (BDB).

The opening ceremony was presided over by BDB president Anoop Mehta, who cut the ribbon, together with Milan Parikh, BDB vice president and Arun Shah, the BDBs honorary secretary.

I am delighted to officially open the new IDEX Online India Service Center, said Mehta. This is an important development for the company and an excellent new addition to the BDB, he added.

Milan Parikh cut the ribbon of the new offices Kiosk, which offers a fast and streamlined diamond search service for visitors to the bourse.

IIDEX Online India managing director Yaron Barzilay said the new Service Center in the bourse would make it easier to access existing and potential new clients.

The India office runs the IDEX Online Diamond Buying Service. Using this concierge service, buyers go online, choose and purchase the stones they want to buy from IDEX Onlines worldwide database of more than 500,000 polished diamonds. IDEX Online takes care of

This is an important development for the company and an excellent new addition to the BDB.

IDEX Online India Opens BDB Service Center

Anoop Mehta, president of the BDB, opening the new IDEX Online India Service Center


| idex online india |the rest of the process from collecting the diamonds, authenticating the stones, consolidating them into a single package and delivering them to the buyer.

By consolidating them into a single package, buyers can order stones from a range of suppliers in a single geographical location. This means that they only need to pay a single shipping charge rather than multiple shipping fees. IDEX Online India has been granted official permission to export diamonds.

In our new office, we also provide our authentication service whereby each stone is authenticated by a certified gemologist to ensure it matches its certificate and to guarantee that it matches the diamond bought online, said Barzilay.

The Service Center also offers Guaranteed Diamond Transactions (GDT), the platform that allows wholesalers and jewelers to buy and sell polished diamonds for cash with immediate delivery, which allows companies to trade diamonds with partners they may not know in full confidence and security, he added. IDEX

The Service Center was designed by

10U design. IDEX

FOR LIVE UPDATES

WWW.IDEXONLINE.COM

VISIT

Welcoming Shreyans Dholakia, Shree Ramkrishna Export

Shailesh Shah, IDEX India customer relationship manager, during the diamond authentication process


market snapshot

by Albert robinson

the month in review

With the prices of precious metals standing still following declines since the start of the year, and polished diamond prices similarly failing to take off, American shoppers are enjoying jewelry prices that have little upward momentum behind them. Consequently,

where stores have attempted to raise prices, they have seen shoppers stay away.

Polished wholesale diamond prices rose slightly in June for the second straight month, according to the IDEX Online Polished Diamond Index. However, as with jewelry, the

upward movement was somewhat anemic.

JEWELRYSales of jewelry and watches in the US rose strongly for a second consecutive month in April, shooting up 12.6 percent. Meanwhile, revised statistics indicate that sales in 2012 were better than previously reported.

Specialty jewelers in the United States once again saw a rise in market share, with sales surging 17.7 percent year-over-year in April, while total jewelry and watch sales jumped 12.6 percent.

Last month, we said we believed that the vigorous rise in sales showed the ongoing improvement in the US economy. This month, it is clear that the economy is indeed trending upwards.

PERFORMANCE

+8.0%Since last November, jewelry sales have risen at a monthly pace of more than 8 percent. The only

exception was in February when they jumped by 7.5 percent, according to the revised figures. This compares with a leap in sales in February 2012, when retailers posted an 11.8 percent gain.

+9.9%In the period from October 2012 to April 2013, growth in watch sales in the US was higher than for jewelry, according to figures from the US Department of Commerce.

Watch sales in April soared 16.6 percent higher, while jewelry sales increased 12.2 percent. Source: IDEX Online Research

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J M A AM J J S O N DJ F MJ FM A AM J S O N DJ FA AM J J S O N D

Index of Diamond & Precious Metals PricesJune 2010 June 2013 by month

Source: IDEX Online Research

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IDEX Online Polished Diamond Price Index

PEAKJuly 2011 146.7 June 2013

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2011 Avg135.8

2013 Avg to date133.6

2012 Avg136.8


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Jewelry Share Index U.S.Jul 03, 2012 Jul 01, 2013 by month

Blue Nile [NILE], Charles & Colvard [CTHR], Movado Group [MOV], Signet Jewelers Limited [SIG], Tiffany & Co. [TIF], Zale Corporation [ZLC]

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Jewelry Share Index EuropeJul 03, 2012 Jul 01, 2013 by month

Bulgari [BUL], Damiani [DMN], LVMH [LVMH], PPR [PP], Richemont SA [CFR], Theo Fennell [TFL]

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Jewelry Share Index IndiaJul 03, 2012 Jul 01, 2013 by month

Classic Diamond [BOM:523200], Gitanjali Gems [BOM:532715], Goldiam International [BOM:526729], Rajesh Exports [BOM:531500], Su-Raj Diamonds [BOM:507892], Suashish Diamonds [BOM:526733]

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Mining Share IndexJul 03, 2012 Jul 01, 2013 by month

African Diamonds, Anglo American [LON:AAL], BHP Billiton [NYSE:BHP], Firestone Diamonds [LON:FDI], Gem Diamonds [LON:GEMD], Harry Winston [NYSE:HWD], Petra Diamonds [LON:PDL], Rio Tinto plc [NYSE:RIO], Rockwell Diamonds [TSE:RDI]

+8620.32 (+73.72%)

+1883.59 (+19.77%)

-1883.17 (-24.35%)

-1885.09 (-23.62%)

2012 2013

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| MARkEt sNAPshOt |

OUtLOOkAmerican shoppers continue to show a strong interest in jewelry. Prices are hardly rising, if at all, meaning retailers have a reason to restock and refresh inventory. This is a positive trend that we expect to see continue throughout the summer and beyond.

POLIshED PRICEsPrices of polished diamonds rose by 1.0 percent in June, according to the IDEX Online Polished Diamond Index. The Index averaged 134.6, a 0.2 percent month-over-month increase.

This is the second consecutive month that the Index has risen on a month-over-month basis. Year-over-year, the Index slipped by 3.8 percent, completing a year of such decreases.

The IDEX Online Polished Diamond Index began the month at 133.7 and finished at 132.2. Polished diamond prices tend to increase when there are large trade fairs, and the JCK Las Vegas show at the end of May and start of June was a major factor behind the rises.

Strong demand for jewelry among US consumers in the first half of this year led to a rise in demand for polished diamonds and jewelry by retailers. This was the economic factor behind the rising prices in June. Strong, but not wild demand in Las Vegas gave wholesalers the confidence to adhere to their asking prices. Although there was a degree of compromise to close deals, the overall result was an increase in prices.

WINNERs AND LOsERsThe Index increased by 1.0 percent in June from May. That compares with a slight rise of 0.2 percent in May on the April figure, and a 1.5 decline in April compared with March. The changes in month-over-month prices are trending upwards.


Since August 2011, following the peak in diamond prices that took place in July 2011, the Index rose in eight months only, and fell in the other 15. As a result, there has been an 8.2-percent drop since the July peak. Three of the eight rises were in the last four months, possibly related to the fact that the American economy is showing signs of recovery.

OUtLOOkWe are expecting an improvement in prices of polished diamonds in the short term, and the rise in June gives us extra confidence that our prediction of a more optimistic market, which we have been voicing for a number months, is correct.

This is boosted by a recent World Wealth Report by Capgemini and RBC that found that High Net Worth Individuals in all markets gave jewelry, gems and watches as their preferred Investment of Passion (IoP) with an average 31.6-percent allocation among their IoP holdings.

In Asia-Pacific (excluding Japan), this figure stood at 33.5 percent and in the Middle East at 35.0 percent. This far exceeded investment in luxury and other collectables such as cars.

ROUGh DIAMONDsThe rough trading sector remains somewhat problematic. With prices reaching record levels, the market is being extremely selective in the goods it is buying, and it appears to be willing to wait rather than jump in and buy.

The US market, in particular, is sticking with what it knows best and with the type of diamonds needed in bridal jewelry its main breadwinner. This typically means round stones of 0.50-2 carats in the mid-color range and VS-SI clarity. In other words, good, but not spectacular diamonds.

OUR OUtLOOkAs the summer months arrive, a slowdown in activity can be expected in the market. Rough prices are, for the most part, showing slight increases. It appears that even the major producers are cognizant of the fact that there is a limit to how much prices can be raised.

WORth kNOWINGOkavango Diamond Company: Belongs to the Botswana government and was established in 2011 to sell part of the countrys annual rough diamond output. By 2016, it will be selling 15 percent of Botswanas rough stones and will be a significant global rough diamond selling organization.


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Index of Diamond & Precious Metals PricesJune 2010 June 2013 by month


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PEAKJuly 2011 146.7 June 2013

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| MARkEt sNAPshOt |

As an important producer, we have been instrumental in the Washington Declaration, aimed to improve the situation of artisanal miners on our continent. The Washington Declaration was a welcome complement to the earlier Moscow Declaration. We are ready as a vice chair to take up an even more engaging role in the future.

Paulo MVika, chair of the Kimberley Process Working Group of Artisanal and Alluvial Producers, on Angolas plans to become vice chair of the process in 2014 and chair in 2015.

qUOtE


LINGO

REACh Regulations European Union regulations that concern the registration, evaluation, authorization and restriction of chemicals.

In particular, a revised legal standard for testing articles for compliance with nickel release limits, which became effective in the EU on March 31 this year and replaces an earlier standard from 1998.

The regulations apply to articles intended to come into prolonged and direct contact with the skin, including most articles of jewelry and watches. Earrings and other types of jewelry used in body piercings have even lower permitted release limits than articles worn against the skin.

IDEX Online India has officially opened its new Service Center in the Bharat Diamond Bourse (BDB). The opening ceremony was presided over by BDB president Anoop Mehta, who cut the ribbon, together with Milan Parikh, BDB vice president, and Arun Shah, the BDBs honorary secretary. IDEX Online India managing director Yaron Barzilay said the new Service Center in the bourse would make it easier to access existing and potential new clients. To find out more about the new center, go to page 28.

Yaron Barzilay, managing director IDEX Online India, with Rajesh Shah (Raju Bhai), Venus Jewel (second from right) and Venus Jewel staff

| MARkEt sNAPshOt |

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rom an organizational point of view, the recent Angolan Diamond Centenary Conference, held to celebrate 100 years since diamonds were first discovered in the country, was an outstanding

success. With all due respect to diamond conferences held elsewhere, few, if any, could succeed in bringing in 800 people from across the globe to listen to speakers from all the diamond centers. Interestingly, Israel was the only diamond center that did not have an official representative at the event.

Of most interest and surprise was the candid way the local speakers approached the conference. The overriding theme was Angolas desire to attract foreign investors. The countrys political and business leaders obviously believe that it is still regarded with a great deal of suspicion and misunderstanding abroad. And, as a result, they were willing to give out information in a way that caught many listeners by surprise.

The first speaker, vice-president Manuel Domingos Vicente, was something of a coup for the organizers. Almost before most people had settled in their chairs, he boldly stated that Angola is seeking to be appointed as vice chair of the Kimberley Process (KP) for 2014 and chair in 2015.

In an admirable admission, he did not try to cover up Angolas unsavory past nor the conflict diamond-fueled civil war that killed and maimed tens of thousands from 1975 to 2002. He explained that the government had invested great efforts in eradicating the trade in conflict diamonds, and was continuing to do so.

With an eye to human rights groups, he said the government was aiming to end illegal mining in the country in a responsible and humane manner. Reports over the past decade have, however, suggested that the Angolan authorities have been anything but gentle in dealing with illegal miners, who have flooded across the countrys porous and enormously long frontier with the Democratic Republic of Congo.

F

Angola Takes Diamond Industry by Surpriseby Albert Robinson

He said the government is also aiming to encourage artisanal mining in line with KP guidelines, thereby raising the standard of living of thousands of Angolans currently panning diamonds for a pittance. Furthermore, he stressed the importance of the diamond sector to the countrys national economy, saying it had a high priority in Angolas long-term economic strategy through to 2025.

Angola intends to develop its diamond industry beyond mining and to expand into cutting and polishing stones and creating a large jewelry manufacturing sector, said the countrys Geology and Mines minister, Francisco Queiroz. The government believes the diamond industry can play a large role in the economic development of the country by providing employment and contributing further funds to the government through taxes and royalties, he stated.

Allied to that, he explained that Angola is believed to have 1,000 diamond areas, but just three diamond mines, including the Catoca mine. And that huge mine alone is responsible for 87 percent of Angolas diamonds. As a result, the country would like to enter into cooperation agreements with foreign and domestic investors to develop its diamond sector.

In an admirable admission, he did not try to cover up the countrys unsavory past nor the conflict diamond-fueled civil war that killed and maimed tens of thousands from 1975 to 2002. He explained that the government had invested great efforts in eradicating the trade in conflict diamonds, and was continuing to do so.

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While it seems likely that Angola will become vice chair of the KP at the next KPCS Plenary in Johannesburg in December under the chair of South Africa, the question of whether it should be allowed to take over such a prestigious position was a point of discussion, given the countrys human rights situation and political record.

A report published prior to the conference by the Bonn International Center for Conversion (BICC) made allegations of human rights abuses. The report says there is a business and security network connecting the government, army generals and some international businesses in the Angolan diamond sector. It also alleges large-scale human rights violations in the country connected with the network of security and mining actors.

Given its political situation, its reputation for widespread corruption and its lack of financial transparency, the country might not appear to be a leading candidate to lead the KP.

Political power is concentrated in the hands of President Jose Eduardo dos Santos, who controls a malleable parliament and judiciary, has been in power

for 33 years and last year won a new five-year term. His daughter is, according to Forbes magazine, the richest woman in the whole of Africa, worth around $2 billion. And just recently, the president appointed his son to run the countrys $5 billion sovereign wealth fund. The country is Africas second-largest oil producer, but millions of people live in poverty.

But is any of this relevant to Angola taking charge of the KP? Probably not. You are looking at this issue in completely the wrong way, two leading diamond industry officials told me. Africans as a whole, not just Angolans, see themselves as having been treated as little more than slaves for hundreds of years, while their countries were raped. They have an extremely deep-seated suspicion of the west and its motives. Even African countries who may be appalled by the actions of other states on the continent will automatically side with them due to a shared history and grievances that rightly stretch back for several centuries.

Angola as KP chair in 2015? You better be prepared to go to your nearest Angolan consulate for a visa to visit Luanda. IDEX

Image: Courtesy Endiama

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Retail Rendezvous: Pure Beauty!

Gaga for dadaThe Matisse collection from Dada Arrigoni features a gothic style with earrings and rings in black gold, diamonds and dark grey, white or peach moonstone. Dada says her creations are inspired by past emotions, memories, impressions and moments in life.

Retail et CeteRa

| retail et cetera > retail rendezvous |

Nice and SpicyNutmeg was once worth more than its weight in gold. Gumuchians new gold Nutmeg collection features a range of bangles, earrings and rings in red, yellow and white 18-karat gold and diamonds. These items are sure to add a great deal of spice and flavor to any outfit.

Oh Mia, Oh My-aPopular Indian retail chain Tanishq redefines contemporary work wear jewelry by introducing Mia 3.0, a collection especially targeted at younger women. The pieces are made of 18- and 22-karat gold and are trendy, lightweight, stylish and lighter on the pocket.




The Wings of a DoveThe Love Doves collection from Loretta Castro features a range of rings including an eye-catching 18-karat yellow gold ring with a 104-carat cushion-cut kunzite from Afghanistan accented with diamonds weighing 0.59 carats. Another version features a 92-carat cushion-cut Morganite from Mozambique accented with diamonds weighing 0.59 carats.

Fope and GloryThe new collection from Italian jewelry brand FOPE, MiaLuce, is inspired by the natural world and comprises three sets of statement jewels: Wood (18-karat rose gold), Moss (18-karat yellow gold) and Stone (18-karat white gold). Every piece is adorned with rows of diamonds, averaging 5.50 karats. Each MiaLuce set, which includes a bracelet, lariat, ring, earrings and one exclusive necklace design, is handcrafted by master goldsmiths and gem setters in Vicenza.



Sapphire SurpriseThe Omi Gems family dates back five generations to Burma in the early 1900s. With such experience of high quality gems, its no surprise that this sapphire and diamond bracelet handcrafted with 9.40 carats of round sapphires and accented with 4.64 carats of brilliant diamond rounds set in platinum from Omi Priv is pure perfection.

Fashion ViceThe Chrie and collection of jewelry from My Vice is inspired by the purity of gold. Chries rich fretwork features minutely outlined roses that create a play of see-through lacy spaces; the diamond cutting highlights the extraordinary sheen of surfaces and enhances the precious contrast between white and yellow gold.

Sting Like a BeeThistle & Bees Burlap and Gemstone collection combines a dynamic new texture, reminiscent of an intricate piece of burlap fabric, with a colorful selection of fine multi-tonal gemstones. Stacking bangles pair iolite with blue topaz, citrine with lemon quartz, chrome diopsite with peridot and multi-shades of ameythysts and rhodolite for a dramatic and versatile look. Coordinating staking rings, pendant and link necklaces, coupled with burlap-textured bangles and earrings complete this collection. IDEX

Whats something most people dont know about your job? Its the only business in the world conducted on trust. You sell 1 to 5 million dollars just on the telephone, without even a signature.

A diamond dealers most valuable asset? Reputation. Yes, you need a sense of artistic value and a knack for design, but the most essential part is integrity. You cant survive without it.

What has doing business in Hong Kong taught you about the Asian market? Its one of the strongest in the world. Every day, there are new millionaires and new businesses. Asians are very investment-conscious. Diamonds are safer and more profitable than money in a bank.

All-time favorite purchase? Most recently, a 100+ ct. D FL. Incredible brilliance and scintillation. Such a beauty. People fell down when they saw it.

Did it arrive with a grading report? Ha, ha. GIA, of course. What responsible businessman, with a good reputation and name, would sell a diamond without a GIA report?

Why is a GIA evaluation so important to ones reputation? Its the most reliable, authentic, dependable gem institute in the world. People know that, especially in the Far East. Remember what I said about reputation? A GIA report is crucial.

Business words to the wise? Selling is an idea game. The more knowledge you have, the more confidence you feel.

GIA gratefully acknowledges those who use our resources to further world

expertise in gems. Invest in your success at WWW.GIA.eDu

ephraim zion of Dehres Limited handles more diamonds in a day than most people see in a lifetime. Here he discusses the power of reputation, global diamond investment and why a GIA report is vital to any business built on integrity.

zion_IDEX_2013.indd 1 5/21/13 8:19 AM


ewelers wrestle with the question to brand or not to brand? If they choose to focus on branding, the next question is Do I team up with a national brand, or do I create my own brand?

There is no easy answer to any of these questions, and the conclusion may be different for each jeweler, depending on a complex set of circumstances and factors.

US Market Moving to BrandingThe US jewelry industry is clearly moving toward branding. Watch brands proliferate and represent most of the revenues in the fine watch market. Jewelry, however, is still largely unbranded, though many producers and retailers are beginning to focus on brands and branding.

The advantages of branding are simple: 1) it helps bring credibility to a product that is infrequently purchased by uninformed consumers; 2) it reinforces the value of the merchandise; 3) it creates a differentiated product; and 4) it can help support higher retail margins.

Branding appealS to YoUng ShopperSMarketing experts have long held the belief that if a brand captures the attention and loyalty of a young consumer, those consumers are likely to remain loyal to that brand for the rest of their lives.

However, this sweeping statement does not apply to all consumers. Baby Boomers those Americans born between 1946 and 1964 have always loved brands. Whether it is a car, apparel or an appliance, they like branded goods.

But Boomers are not particularly loyal to any given brand. They often buy the hot label of today. When that brand is no longer relevant, or seems to have lost its desirability, they find a new brand. For example, Boomers no longer shop at Thom McCann shoe stores or Roses, nor do they wear Hush Puppies. Those brands of the 1960s and 1970s have been replaced by Wal-Mart, Google and Apple brands that are more relevant today.

retail et cetera

IDEX ONLINE RESEARCH:Millennials Are Most Loyal to BrandsBy Ken Gassman

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| retail et cetera > idex online research |

Millennials More Brand loyal

In contrast to their Boomer parents, American Millennial consumers those born between 1983 and 2001 are more loyal to brands, according to recent research. While many Millennials are still young the youngest have not yet graduated from high school there are indications that they want brands that they can trust for life.

Matt Thornhill, founder and president of The Boomer Project, notes that You want [consumers] to buy your product because once they do, theyll likely be stuck in their ways. He notes, however, that this appears to apply more to Millennials than to Boomers.

Millennials, Thornhill notes, have a narrower set of brand choices than older consumers, since they want a brand that will help them fit into their social network.

While brand loyalty seems to be relatively easy to develop, Thornhill also says that brand loyalty is a fleeting thing, so you have to be relevant to whomever you are talking to.

In the jewelry industry, Pandora has developed a loyal following of consumers. De Beers is trying to create brand loyalty for its Forevermark goods, with some early initial success, according to our sample of independent jewelers. Tiffany has always been a highly recognized brand, and it stays relevant by creating a stream of new products every year, whether the economy is booming or in a recession.

Jewelers should Focus on MillennialsMillennial consumers especially the 25-to-30 year old Millennials have more money than their parents at this young age. Many of them are DINKS Double-Income, No-Kids. They often work in technology jobs, which is one of the highest paid professions in the US. And, best of all, they appear to be much more loyal to brands than any of their predecessor demographic segments, including the Silent Generation (1929-1945), Boomers (1946-1964) and Gen-X (1965-1982).

Final data from the US governments Consumer Expenditure Survey shows that young consumers 25-34 years old which includes the youngest Gen-Xers and the leading edge Millennials spend 123 percent of the national annual average jewelry expenditure, more than any other age group of American shoppers.

For jewelers, this means that Millennial shoppers have tremendous lifetime value as customers, but this is only true if the jeweler can create a brand and stay relevant. IDEX

Marketing experts have long held the belief that if a brand can capture the attention and loyalty of a young consumer, those consumers will likely remain loyal to that brand for the rest of their lives.


retail et cetera

Retail Bytes

Tiffany Leads Purchases for uLTra-WeaLThy Women

Forget Breakfast at Tiffanys, ultra-wealthy women are ordering lunch, dinner and a midnight snack at the luxury jeweler. According to the latest survey by the Luxury Institute, Tiffany & Co. is the go-to jewelry brand for individuals with a minimum net worth of $5 million.

David Yurman and Cartier follow Tiffany in the spending stakes. And its not just because of product offering. The survey found that the three market leaders are also the top three jewelers where ultra-wealthy women have a preferred salesperson.

Relationship selling is not something exclusive to markets like high-end automobiles, real estate and wealth management services, said Luxury Institute CEO Milton Pedraza. Even in luxury jewelry and

fashion, relationships cultivated by trust and an understanding of customer preferences can help boost both the frequency and size of sales.

The survey also found that ultra-wealthy men are less likely than women to build relationships with salespeople.

Pentamillionaire men and women both agree that the top ways salespeople build lasting relationships are by making them feel comfortable, communicating honestly, earning their trust and recognizing them on store visits.

More than half of ultra-wealthy women who purchase from both jewelry and fashion brands say they appreciate handwritten thank you notes. IDEX

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please visit us at the september hong kong jewellery & gem fair 11 - 15 september 2013 hal l 5 a15


| reTaiL eT ceTera > retail bytes |

Ja Lobbies LaWmakers on criTicaL issues

The Jewelers of America Political Action Committee (JAPAC) visited Washington, D.C. recently with a delegation of jewelers. This marked the third time that JAPAC has led a delegation of retailers to the capital.

The days discussion focused on sales tax fairness. In May, the Senate passed the Marketplace Fairness Act of 2013. This legislation is designed to close the Internet sales tax loophole that continues to hurt traditional jewelry businesses. It is now being considered by the House of Representatives, where it faces stronger opposition than in the Senate.

The margins on diamonds have narrowed, and the difference between in-store sales tax and online tax-free prices can keep me from closing a lot of sales, explained Bill Farmer of Farmers Jewelers in Lexington, KY in support of the Act. Its bad business for independent jewelers like me to have to compete for customers sales due to an unfair tax advantage.

This is a critical time for jewelry businesses, with legislators seriously considering the passage of the first Fairness Act, the ongoing threat of LIFO [last in, first out accounting method] repeal and the

possibility of major tax reform in the near-term, said JA president & CEO David J. Bonaparte. The Capitol Hill fly-in was a great opportunity to get these issues and especially jewelers views on them in front of key decision-makers in D.C.

Senator Dick Durbin (D-IL), a co-sponsor of the Marketplace Fairness Act, met with the JAPAC group and advised them to keep pressing for passage of the bill. Youve got to explain to the House members what this means to local businesses and tell them, You say youre for small business, prove it to me, he urged.

Besides e-fairness, discussions also focused on protection of LIFO. With tax reform and deficit reduction at the top of the agenda in D.C., LIFO repeal is an attractive revenue-raising option for some legislators and the Obama administration, which has repeatedly sought repeal.

The meetings were part of a day-long agenda that included presentations from a D.C. fundraiser and a staff representative from the US Senate Committee on Small Business and Entrepreneurship. IDEX

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schupstraat 1/7 2018 antwerpen belgium tel + 32 3 231 21 47 [email protected] www.pinchasi.com

please visit us at the september hong kong jewellery & gem fair 11 - 15 september 2013 hal l 5 a15



Image: Tiffany & Co.

indian JeWeLers PromoTing LoWer-QuaLiTy goLd JeWeLry

In a bid to help independent retail jewelers connect more with their customers during the selling process, DTC Sightholder Stuller has launched Create Bar, a turnkey custom design solution that personalizes the jewelry buying experience and enables jewelers to easily brand themselves.

The Create Bar features a design bar, barstools, LED lighting, personalized signage, jewelry prototypes and loose gemstones, tools, hardware including a computer, TV, iPad, keyboard, mouse and color printer CounterSketch Studio and Stuller Showcase software, marketing support and in-store training, installation and technical support.

The company said that the Create Bar was motivated by research that showed that although shoppers enjoyed experiencing individual interactive selling tools, such as prototypes or custom design programs,

Leading Indian jewelry brands such as Titan Industries and Gitanjali Gems are strongly promoting diamond jewelry made with lower amounts of gold and opening more outlets abroad, such as in Singapore and Dubai, in an effort to boost sales.

We are moving to diamond jewelry more aggressively, introducing lower-carat jewelry and also pushing silver jewelry, said Gitanjali Gems chairman and managing director Mehul Choksi in comments cited by The Indian Express.

Gold is traditionally a large element in Indian brides wedding gifts and dowries, as well as for religious rituals. However, increased gold imports have led to a soaring current account deficit.

Consequently, India has increased import duties on gold and tightened credit for gold importers since May, when a record 162 tons of gold was imported.

A reduction in gold jewelry purchases due to higher prices, together with a falling rupee, is making life difficult for jewelers, who have seen declining sales.

Jewelers are thinking of introducing 14-karat jewelry, said Haresh Soni, chairman of the All India Gems and Jewellery Trade Federation. Low-karat jewelry will help us to control imports as well.

Diamond jewelry uses 20-25 percent less gold compared to a normal 22-karat piece, said Choksi.

Demand for jewelry with lower-quality gold is seen coming mainly from younger consumers, who are less concerned about jewelry purchases of 22-karat gold, according to the report. IDEX

sTuLLer inTroduces creaTe bar design soLuTion for indePendenT reTaiLers

they wanted a more connected shopping experience. This led Stuller to build a solution combining low-cost inventory and an increased customer experience through its digital tools, Stuller.com and CounterSketch Studio.

Jewelers need a way to connect with todays tech-savvy generation. And the Create Bar presents them with the tools they need to obtain and develop a relationship with this market segment, said Maren Rosen, executive director of bridal and jewelry.

Other industries such as fashion and electronics are already offering this type of personalization. IDEX



rio TinTo diamonds Launches neW camPaign for nazraana in india

Rio Tinto Diamonds has launched a new consumer advertising campaign for Nazraana, its marketing initiative to promote affordable diamond gifts in India.

Using the tag line, The heart that gifts a diamond, shines like a diamond, the consumer campaign includes print, digital and cinema advertising.

The company said that the new campaign is designed to tap into the emotions and timelessness associated with diamonds.

According to Vikram Merchant, manager of Rio Tinto Diamonds India Representative Office, The new consumer advertising campaign is the next stage in the companys market development activities focused on promoting domestic demand for diamonds in India.

Since launching the Nazraana concept, we have seen and continue to see, strong growth in this new market segment. This is good news for diamond suppliers, manufacturers, designers and, ultimately, the Indian consumer.

Nazraana, which takes its reference from royal gift giving rituals of past eras, and weaves it into the gift giving occasions of modern India, is also supported by its brand ambassador, Bollywood actress Yaami Gautam.

The consumer advertising campaign was launched on July 1 and will be implemented throughout the remainder of 2013.

Nazraana jewelry is made from hallmarked 14- and 18-karat gold or 925 silver and set with natural diamonds. IDEX

mouaWad Launches onLine JeWeLry auThenTiciTy cerTificaTion

Luxury jewelry company Mouawad has launched an online authentication service. The Mouawad Certificate of Authenticity (COA) allows owners of Mouawad jewelry with a COA to check the origin and full details of their item.

To access the new service, users enter the items reference number available on their receipt or, in some cases, on the piece itself. Once it is accessed, the COA immediately appears. Certification details are accompanied by a picture and description of the item, details of the collection the piece comes from, as well as authentication of the gemstones and precious materials used for example, the type of stone, metals and carat weights.

Since taking the helm at Mouawad, we have been committed to developing and harnessing leading industry technologies that benefit our clientele, said Pascal Mouawad, guardian of the Mouawad retail division. The Mouawad Certificate of Authenticity allows our patrons to verify any pieces they own with just one click, giving them the reassurance and guarantee that they are indeed handcrafted by Mouawad.

Mouawad operates 16 retail outlets throughout the world. The company is currently expanding its presence in the Gulf region with new generation boutiques recently opened in Kuwait City, Doha and Muscat. IDEX

Nazraana Jewelry

Untitled-2 1 12-10-03 10:28 PM


retail et cetera

FacetsReuven Kaufman has been re-elected president of the Diamond Dealers Club of New York, Americas largest diamond trading exchange.

Basant Johari was re-elected as vice president, Jacob Zupnick was re-elected as treasurer, and Elliot Krischer was elected as DDC secretary.

Elected to serve on the board of directors were: Israel Ashkenazy, Shmuel Isaac Bornstein, Solomon Cohen, Gary Dimenstein, Abraham Einhorn, Meilech Fastag, Jack Friedman, Dov Fruchter, Michael Gross, Isaac Jacob, Moshe Lax, Robert Moskovitz, Efraim Reiss, Sol Rybak, Aaron Vagdani and Moshe Zwiebel.

Elected to the Control Committee were: Gershon Fruchter, Isaac Lesser and Charlie Oh.

The Diamond Dealers Club is fortunate to have for the next two years an outstanding group of officers and directors, said Kaufman. Under their leadership and guidance, we look forward to the Club playing an innovative role in helping bring about the success of our membership and industry. IDEX

Visitor returns $32 Million Bag of DiaMonDs at HK fair

A diamond dealer had a lucky escape after leaving a bag of diamonds worth $32 million in a caf at the Hong Kong Jewellery & Gem Fair.

Fortunately for the unnamed Israeli trader, the bag of diamonds was found by Shenzen tourist Fu Zhuli, who not only returned the gems, but also berated the dealer for being so careless in the first place, reported the Shenzhen Daily.

Fu told the paper that she had decided to take a break at the show and sat down in one of the fairs cafes. She saw two foreigners chatting and only once they had left did she see that they had left a black bag behind.

After she opened the bag, the surprised jewelry enthusiast found what she described as a trove of good quality, soy-bean-sized roughs.

She guarded the bag for two hours until one of the foreigners ran back into the caf.

The shirt on his back was soaked with sweat, and his face was pale. He rushed in and saw the bag with me and leaned forward, uttered some incoherent words and kept bowing and saying thank you in Putonghua, she said.

I told him off for being so careless and leaving something so precious behind.

As for whether she had considered taking the bag, Fu told the paper that she is a Christian and that her husband who works in the Shenzen police force, had told her to report the finding to police immediately.

I never thought of doing that, I just felt like [the men] would come back to get it so I just sat there and waited, Fu said. I am a very honest, simple person and I believe in sincerity. IDEX

reuVen KaufMan re-electeD PresiDent of DDc


| retail et cetera > facets |

alex Woo Brings luxury anD style to tHe MajorsNew York-based designer Alex Woo has created a Major League Baseball-themed collection for women. The collection marks the MLBs first professional sports licensing agreement.

The line, which is made in the US, consists of pendants featuring the logos of each of the 30 Major League teams. The pendants are made from eco-friendly sterling silver, 14-karat yellow gold or 14-karat white gold with diamonds.

I am so proud to be partnering with MLB to design my first professional sports icons that acknowledge and celebrate all their female fans, said Woo, who is best known for her Little Icons range of jewelry. There are so many good things we think of when we share those long-lasting memories, like our first baseball game and what is more American, and iconic than baseball?

Hari KrisHna exPorts celeBrates 21st anniVersary

Our fans are our most important asset, so creating offerings that are designed specifically for our significant female fan base is critical, said Howard Smith, senior vice president, Major League Baseball. IDEX

Diamond manufacturer Hari Krishna Exports recently celebrated its 21st anniversary. This has been a year of celebrations for the company which moved to its new 25,000 square foot head office on the 17th floor of The Capital at Bandra Kurla Complex, Mumbai in February.

Twenty-one years ago, in 1992, we started this company with few employees and a meager turnover of Rs. 1 crore [~$166,150] and today have reached to Rs. 2,500 crore [~$500 million] with more than 5,000 employees, said managing director Ghanshyam Dholakia.

Its been an awesome journey so far. Every member of this Hari Krishna family has contributed to our rapid growth and success I wish all the employees a very happy anniversary and hope to achieve greater heights in the near future, he added. IDEX


retail et cetera

Trend reporT:Trendy and Timelessby Amanda Gizzi, Jewelers of America

Glorious GoldWith gold prices dropping, consumer demand for gold will undoubtedly increase. Where consumers were once rushing to sell their broken and outdated gold jewelry, they will now be looking to add gold jewelry back to their accessory wardrobes. Look for bold, larger-scale pendants to be a key style for the upcoming season. When worn on a longer chain, pendants are the perfect accessory for the turtleneck sweaters that will be popular this fall and winter. Multi-finger and elongated knuckleduster-style rings will shine in yellow gold. For earrings, stock up on yellow gold hoops accented with diamonds. Bangles in a variety of widths with different textures and tones remain the hot choice for the wrist.

or fall and winter, fashions will be diverse. Whether your sense of style is trendy or timeless, fashion and fine jewelry will have something fresh, yet familiar to offer. Here are a few of the hot jewelry fashions that will

feature in the upcoming seasons:

F

Alexandra Mor Oval Hoop Diamond Earrings

Stuller Yellow Gold Vintage Dangle Pendant

Just Jules Bangles


| retail et cetera > trend report |

colorful enGaGementBridal jewelry is getting a little more colorful. While white diamonds still reign, colored diamonds are infusing a jolt of color, which gives brides-to-be an additional way to showcase their sense of style. Champagne, chocolate and black diamonds are being mostly used as accent stones, but can also be found as the center stone for the bride who wants something different. Yellow diamonds are a sunny alternative to the darker, earth tones of chocolate and champagne. In addition to colored diamond engagement rings, colored diamonds are also being incorporated in wedding bands for men and women. IDEX

Stuller Yellow Gold Vintage Dangle Pendant

rainbow of colorGemstones in all their varieties and brilliant colors speak to everyone differently, as if calling their rightful owners by name. With so many gemstone varieties available, what stones should you stock this season? There is one special gemstone that single-handedly gives off a multitude of color opal. As well as the magnificent color display that opals provide, they are extremely intriguing. Boulder opals are being set in traditional designs as well as fashion- forward pendants and rings. In addition to these stones, black, white and matrix opals are also going to be hot this fall.

Amanda Gizzi is the director of public relations and special events for Jewelers of America (JA), the national trade association for businesses serving the fine jewelry marketplace, with the primary purpose of improving consumer confidence in the jewelry industry. JAs consumer education arm, Jewelry Information Center (JIC), has provided public relations and marketing services on behalf of the fine jewelry and watch industry since 1946. JICs website, www.JIC.org, is the online source for fine jewelry and watch information, trends and shopping tips. Visit www.jewelers.org and www.JIC.org for more information. Amanda can be contacted at [email protected].

Pamela Huizenga Jewelry Boulder Opal Gold Pendant

Todd Reed Yellow Diamond Engagement Ring

Mercury Ring Eterno Amor Collection in Color

K. Brunini Opal Earrings

Australian actress Toni Collette was back on the red carpet at the premier of her latest movie, The Way Way Back. The Oscar-nominated actress wore a black J Brand jumpsuit and Stuart Weitzman shoes to the premiere during the 2013 Los Angeles Film Festival held at Regal Cinemas L.A. Live. She glammed up the outfit with a stack of bracelets from Norman Silverman including a selection of 18-karat white gold diamond bands and an 18-karat white gold 11-row diamond cuff.


retail et cetera

Celebrity Choices

Emmy Rossum wore Amrapali pav diamond earrings to the Showtimes Shameless Los Angeles special screening held at the Leonard H. Goldenson Theatre in North Hollywood, California. The actress stars as Fiona Gallagher in the dramedy.

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| retail et cetera > celebrity choices |

Carmen Electra lived up to her name with an electric white dress at the premier of This is the End in Westwood, California. She matched her sparkling waistband with 18-karat pav reversible Ava earrings from Carrera y Carrera and an 18-karat yellow gold diamond ring from the same designer.

Singer Janelle Monae opted for a range of jewelry designers to accessorize her outfit and updo at the 2013 BET Awards held at the Nokia Theatre L.A. Live on June 30. She chose a ring from Demarco, a necklace from Katerina Maxine and a Norman Silverman earring.


Dubai DiamonD ExchangE to opEn DiamonD control officE

polished

Dubai plans to open a new diamond office to accurately track the value of its trade in polished stones. The Diamond Control Office is to open under the authority of the Dubai Multi Commodities Centre (DMCC) by the end of this year. The move is seen as helping the emirate take a big step toward attracting further financing for its diamond industry.

The office at the DMCCs Dubai Diamond Exchange (DDE) will allow for a more thorough valuation of the precious stones moving through the emirate. It is also designed to win the confidence of major financial institutions, as Dubai aims for a bigger share of the global diamond trade as it moves east.

We are basically going to establish a special diamond control office for polished diamonds, which will mean that in the future, all polished diamonds will have one point of entry, said DDE chairman Peter Meeus.

A similar system already exists to monitor the trade in rough diamonds through the UAE in the form of the countrys Kimberley Process office, which implements a global certification scheme that seeks to prevent the trade of conflict diamonds.

The addition of a new process certifying the trade in polished stones promises to insert Dubai into global diamond trade twice. First, channeling rough diamonds for cutting and polishing in China and India and then moving the polished gems to markets around the world.

We are basically going to the next stage in Dubai with regards to the development of our diamond business, Meeus explained. Because if millions of diamonds, big and small, are coming, you need a dedicated office that can value them properly. And on the basis of that valuation, banks actually extend credit.

The opening of the new office before the end of the year will mean the proper valuation of what comes in and what goes out, he added.

The emirates increasing capabilities come at a time of a huge shift in the global diamond trade. The Diamond Trading Company is transferring its operations from London to Botswana in a move that is likely to have huge consequences for Dubai, said Meeus. IDEX


| polishED > news |

The Thai government is lifting the 20-percent tax on imported gems and jewelry products to be sold at the Bangkok Gems and Jewelry Fair in September.

Foreign exhibitors will be allowed to bring in and sell gems and jewelry from other countries duty-free, while local exhibitors can reduce their selling prices after cutting down on imported parts and product costs.

We are privileged to have the government working alongside us so directly, said the president of the Thai Gem and Jewelry Traders Association (TGJTA) and chairman of the Gems, Jewelry and Precious Metal Confederation of Thailand, Somchai Phornchindarak. He said the government decision followed strong lobbying by the TGJTA.

The temporary concession has been granted for a temporary period of 15 days before and after the show. Products covered include pearls, precious stones and metals, imitation jewelry and coins all categories that fall under the International Trade Commission (ITC)s Harmonized System Code, Chapter 71.

The import duty-free incentive applies only to exhibitors endorsed by the TGJTA, while the regular 7-percent VAT still applies to all exhibitors, local and foreign.

The show also offers a Zero VAT Pavilion, where buyers are exempted from paying the 7-percent VAT imposed on rough gems and raw materials imported into Thailand for manufacturing.

The February version of the show saw the introduction of a Business Matching Service. This is a scheme to help foreign buyers identify, locate and communicate with exhibitors before the start of the fair.

thai govt tEmporarily lifting 20% tax on importED gEms anD JEwElry

As part of the scheme, customers are assisted by staff members to view suppliers profiles, see their latest products and select those whom they wish to meet. The service is free of charge and conducted online. In return, sellers are able to learn about the buyers and prepare offers ahead of time.

There were more than 30,000 visitors to the last Bangkok Gems and Jewelry Fair in February. The bi-annual event is regarded as the worlds fifth- and Asias second-largest trade show in the gems and jewelry market. IDEX

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| polished > news |

Botswana Rough diamond expoRts dRop in may

element six opens woRlds laRgest synthetic diamond R&d Facility

Botswana exported $267.7 million of rough diamonds in May, compared with $402.2 million in April, according to Bank of Botswana figures.

The bank reported that rough exports in the first quarter of the year reached $718.9 million compared to $826.8 million in the year-earlier period.

The central bank did not publish figures relating to polished exports in April or May in its latest release. However, in the first quarter, exports of polished diamonds were $102.0 million compared to $160.5 million in the year-earlier period.

Total diamond exports in the first three months of this year were $1.771 billion a significant rise on the $1.018 billion recorded a year before indicating the rising volume of diamonds being exported from the

country as the Diamond Trading Company (DTC) shifts its operations to Gaborone from London.

That move is expected to be completed in either September or October, with the first DTC Sight taking place in Botswana in November, according to executive vice president of De Beers Global Sightholder Sales Varda Shine. IDEX

Synthetic diamond company Element Six, part of the De Beers Group of Companies, has opened what it called the worlds largest and most sophisticated synthetic diamond research and development facility.

The $32m Global Innovation Center (GIC) located at Harwell, near Oxford in the UK, was opened by Science Minister David Willetts MP and Philippe Mellier, chairman of Element Six and CEO of De Beers.

The 500-square meter facility, which employs more than 100 scientists and technologists, consolidates Element Sixs global innovation teams into one integrated center.

Element Six said the center will develop a pipeline of innovative synthetic diamond and related supermaterial products for industries from oil and gas drilling to precision machining and electronics. It said the new GIC will allow for the rapid development of customized material within abrasive and technology applications, which will enable extreme leaps in end-application performance and productivity.

Facilities at the GIC include modeling and design, materials preparation, a High Pressure High Temperature (HPHT) synthesis press hall, Chemical Vapour Deposition reactor synthesis labs, post-synthesis processing ( for example, polishing, cutting and shaping), materials analysis/characterization and end application testing.

Our new state-of-the-art Global Innovation Center will consolidate and strengthen our innovation capability, said Walter Huehn, Element Six CEO.

For the first time in the global synthetic diamond industry, we can partner with customers to rapidly design, manufacture and test market-ready solutions all under one roof. Quite simply, the GIC puts Element Six at the forefront of diamond technology.

While Element Six supplies lab-made diamonds for industrial use, there are some concerns in the industry that it is using its expertise to supply the gem-quality sector as well. IDEX


| polished > news |

de BeeRs intRoduces FoRwaRd contRact sales FoR auction customeRs

indian govt agRees to industRy demand oveR tax-FRee Re-impoRts

De Beers recently announced that it will begin providing its rough diamond auction customers with an opportunity to determine the volume of goods they want to purchase over a given period through the introduction of forward contract sales.

Approximately 10 percent of De Beers rough diamonds are currently sold through its auction platform.

The company said the introduction of forward contract sales will enable its customers to engage in forward planning, and help them meet their business requirements.

The company also announced that as part of its attempt to focus on the needs of existing customers while building a long-term offering to emerging market customers in India and the Far East, it will relocate the purchasing, production and sales base for its auctions to Singapore. The move will take effect from November 2013.

Offering forward contract sales through our auction platform, and moving the base of our auction sales to Singapore, will further enhance our compelling proposition to a diversified global customer base, support our position as the leading distributor of rough diamonds via online auctions, and deepen our insight into

rough diamond demand, said Philippe Mellier, CEO of the De Beers Group.

The company said it will continue to operate its existing network of auction viewing offices in Antwerp, Israel, Dubai and Hong Kong. It will also continue to hold spot auction events. IDEX

The Indian government is allowing small polished diamonds for certification and re-import to be exported tax free.

Cut and polished diamonds of 0.10 carat or above can be exported and thereafter re-imported duty free after certification by authorized laboratories, the Directorate General of Foreign Trade (DGFT) said.

Gems and Jewellery Export Promotion Council chairman Vipul Shah said the move would increase exports of small diamonds.

Shah said that the Indian diamond sector had been pressing the government to permit the export of polished diamonds of 0.10 carats for grading, certification and re-importation without being subject to taxation.

International players like the watch industry always ask for certified small-sized diamonds and it was not allowed earlier, he said in comments cited by The Economic Times. Now Indian small-sized diamonds will get space in the international market, IDEX

Sorting Debswana DiamondsImage: Courtesy De Beers Group


POLISHED

Polished Diamond Prices:Up 1% in Juneby Edahn Golan

rices of polished diamonds increased on average by 1 percent in July compared to May, according to the IDEX Online Polished Diamond Index.

This was the second consecutive month that the Index has increased on a month-over-month basis. Year-over-year, the Index declined 3.8 percent, completing a year of such declines.

Good jewelry demand in the US during the first half of the year resulted in increased retail demand for polished diamonds and jewelry, the economic factor behind the rising prices in June. The good, although not amazing, demand at JCK Las Vegas gave wholesalers enough confidence to hold on to their asking prices. They had to compromise a little to close deals, but the overall result was an increase in prices.

The price Index for almost all key sizes of round diamonds increased in June on a month-over-month

basis. The Index for the important 1-carat rounds increased a robust 1.2 percent compared to May while 5-carat rounds jumped by 3 percent in June.

Four-carat rounds lost 2.7 percent of their value in June compared to May, and 0.5-carats declined by 1.1 percent.

On a year-over-year basis, the price Index for round goods declined for all key sizes during the month. One-carat rounds are lagging 4.4 percent behind their prices a year ago; the average price of 2-carat rounds is 5.3 percent lower, and the price of 5-carat rounds is 12.9 percent below where it stood a year ago, despite the recent increase in price.

Consumers continued interest in square cuts, especially princess-shaped diamonds, is a matter of size over price. Compared to rounds of the same size, color and clarity, princesses cost less, and consumers are willing to make the shift from the traditional rounds for the benefit of their wallets.

150

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2011 2012 2013

A MM JJ S O N D A AM J J S O N DJ F M AJ F

20112011 2012 2013

M A AM J J S O N DAJ S O N D J F M A M JJ FM A AM J J S O N DJ F

PEAKJuly 2011 146.7

June 2013 134.5

2011 Avg135.8

2012 Avg136.8




Figure 1: IDEX Online Polished Diamond Price Index

Figure 2: Long-Term Princess Trend by Sizes

4.0 Ct

5.0 Ct

3.0 Ct

2.0 Ct1.0 Ct

1.5 Ct0.5 Ct

350

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| polished > polished diamond prices |

150

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2011 2012 2013

A MM JJ S O N D A AM J J S O N DJ F M AJ F

20112011 2012 2013

M A AM J J S O N DAJ S O N D J F M A M JJ FM A AM J J S O N DJ F

PEAKJuly 2011 146.7

June 2013 134.5

2011 Avg135.8

2012 Avg136.8




Figure 1: IDEX Online Polished Diamond Price Index

Figure 2: Long-Term Princess Trend by Sizes

4.0 Ct

5.0 Ct

3.0 Ct

2.0 Ct1.0 Ct

1.5 Ct0.5 Ct

350

300

250

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On a year-over-year basis, the three key-size princess-shape diamond categories noticeably increased, mostly the 1.5-carats, which rose by 12.3 percent compared to June 2012.

outlookLast issue, we wrote that after months of forecasting a lackluster market in the short term, we are now upgrading that forecast to a cautiously optimistic one. We fully expect an improvement in prices of polished diamonds and the improvement seen in June gives us additional confidence about our prediction.

US retailers enjoyed a good run in the first quarter of 2013, and the most recent information indicates that the trend continued into the second quarter. Solid demand from China, Japan and India provides an additional reason to expect a moderate improvement in the coming months.

We expect polished diamond prices to increase in the long term. IDEX

The full analysis of polished diamond prices is available to IDEX Online Research subscribers and IDEX Online members.

Contact [email protected] for more information on how to subscribe or to become a member.


here is a passage in the Talmud (the central text of Judaism) that says, More than the calf wants to suckle, the cow wants to nurse. Todays rough diamond market is a good example of

this: the miners want to feed manufacturers rough more than the manufacturers want to buy it. As a result, goods are trading at low prices, and many are unwanted.

An estimated 5-10 percent of the goods by value were left on the table at the last DTC Sight. This was because Sightholders either found their prices too high, or they were unable to find buyers for them on the secondary market, which usually pays more for the goods.

Currently, De Beers rough diamond prices are considered high. As one insider said, Not enough goods were left on the table, meaning that if Sightholders had turned down more goods, De Beers may have better understood that prices are too high.

The market is clearly reacting to this situation. Both Antwerp and Mumbai saw a reduction in rough trade in May compared to April. Rough diamond imports into Antwerp dropped 26 percent, and exports declined 20 percent. In India, imports fell more than 14.5 percent and exports by nearly 44.5 percent.

If trading in the secondary market influences DTCs price-setting policies, which it seems to do when prices increase, then the low premiums Sightholders were paid should lead the way to price declines.

polished

Rough Diamond Market Report: Unwanted Goods and Low Prices By Edahn Golan

T

Image: DeBeers


| polished > rough diamond market report |

Following the June Sight, estimated at $550 million after goods were returned, trading was limited and at very low premiums, especially for the cheaper goods. Even the most popular boxes did not see high demand.

For example, Crystals 2.5-4 cts were in low demand, with offers for the box standing at 2 percent below DTC list price, according to rough diamond brokers Bluedax.

low premiumsMany boxes were selling for credit rather than cash. Select MB 2.5-4 cts sold at a 4-percent premium for cash payment, a 5-percent premium at 30 days credit and 6-percent for 60 days credit. Cubes -7+5 sold for a 1-percent premium at 120 days, the kind of payment terms US retailers received prior to the 2008 crisis.

Following are some other items:

It is worth remembering that such small premiums do not translate into profit. Sightholders pay their brokers a 1-percent fee and give the DTC another 1.5 percent for Value Added Services (VAS), commonly referred to in the market as the DTC Tax, on top of the price of the goods. This means that anything sold for less than a 3-percent premium is actually a loss.

Therefore, an item that sold at list price for 60-days credit is a triple loss the brokers fee, VAS and the cost of the money were outright expenses. Sightholders, who are generally willing to pay just to look good to the DTC, offload diamonds to generate a turnover for the bank and, thereby, look capable to De Beers.

It is not clear, however, if the DTC really increased prices at the last Sight. The box composition changed somewhat because of availability. The consensus, though, is that prices were somewhat adjusted.

Alrosa, on the other hand, did increase prices. According to an estimate by Dudu Harary, the co-founder of Bluedax, Alrosas prices increased by about 3 percent on average.

Botswana, Bhp Billiton, rio tinto difficult to do BusinessEveryone agrees that the level of profitability remains near zero, that the price of rough diamonds is too high and polished prices are barely allowing the industry to squeeze out a minimal margin. This is already old news. What is compounding this is the uncertainty.

Manufacturers are not altogether happy about the DTCs move to Botswana. They fear greater government involvement influencing the companys policies. A recent meeting in London that included Sightholders and Botswana government officials left DTCs clients with even less confidence about the move.

Dominion ( formerly Harry Winston) decided to kill the BHP Billiton tender system, and dismissed many capable people on BHPs Antwerp team. This decreased transparency goes against what the banks and society are looking for, although many traders prefer a contracted supply system to tenders. For some reason, there is a level of wariness among traders relating to Dominion and its team. This is something that the company needs to address, and the sooner the better, as far as its reputation is concerned.

Cubes 3 grs +7 sold at list +1.5 percent cashCubes 4-8 4-percent premium for cash paymentCollection 2.5-4 cts 3 percent at 60-days creditMB Clivage 3 grs +7 at list for 60-days creditMB High 3 grs +7 sold for cash at listMB High -7 +3 4-percent premium, 60-days creditMB Low -7+3 at list, 60 days creditSelect MB 5-14.8 cts sold at a 2.5-4 percent premium for cash payment

Everyone agrees that the level of

profitability remains near zero, that

the price of rough diamonds is too

high and polished prices are barely

allowing the industry to squeeze out

a minimal margin. This is already old

news. What is compounding this is

the uncertainty.


| polished > rough diamond market report |

outlookDecent demand for jewelry and loose polished diamonds at the Las Vegas show should translate into a certain increase in diamond manufacturing. Even if that converts into an increase in demand for rough, prices are already high enough and retailers are not paying more for polished to keep the lid on prices, at least in the short term.

In the longer term, manufacturers and wholesalers need to educate retailers about fluctuating rough prices and the need to increase prices of polished on occasion. Retailers learned how to accept this when it came to gold. And there is no reason they cannot also accept it for diamonds especially if it is not abused by manufacturers. This can be easily addressed by transparency in polished diamond sell

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