Modern Jewelry Trends

As expected, with luxury booming, holiday sales at Tiffany & Co. were strong this year, increasing 15 percent to $818 million. Sales in November and December were strong across the board, in the U.S. and overseas in all divisions. U.S. retail sales increased 12 percent to $432 million. Comparable store sales rose 8 percent, including a 15 percent increase at the flagship store in New York. Both the number and average amount of transactions increased. Michael J. Kowalski, chairman and chief executive officer, said “We saw healthy sales increases in many product categories ranging from diamonds to silver jewelry.” Tiffany plans to open five to seven new stores in the United States in 2007.

The important numbers for the holiday season are coming in, with many major retailers releasing holiday sales results today. The International Council of Shopping Centers reported that November and December same-store sales were up around 3 percent from 2005, which is a percentage point lower than original estimates. Visa estimated holiday spending growth (including restaurants, travel and other spending) of 6.5 percent (also down a percent from previous estimates). Visa said the average sale at retail stores declined 1 percent. According to MasterCard’s SpendingPulse survey, retail sales rose 3 percent from 2005, the smallest gain since the survey started in 2003. Electronics and luxury goods had the strongest sales, according to the SpendingPulse survey.
Most jewelry retailers had modest sales growth this year. The Zale Corporation reported same-store sales rose 2.3 percent for November and December. Total revenue rose 3.7 percent to $905 million. Although the Zales brand gained sales momentum, margins were slim thanks to “more aggressive pricing and increased promotional activity,” the company said. Sterling’s results are expected to be better: we’ll know next week.
The big winners? No surprise: luxury retailers had the best growth, once again. (Tiffany releases what are expected to be impressive results on January 10.) Online jewelry sales, like all online sales, increased dramatically, the third year of more than 20 percent growth. According to comScore Networks, online retail spending for the two months rose 26 percent to $24.6 billion. According to comScore Networks, retail e-commerce now accounts for about 7 percent of consumers’ retail spending (more than $100 billion, not including travel.)
Department store winners were Saks, with an 11 percent increase, Nordstrom with 9 percent, and Neiman Marcus, 7.1 percent.
After a dip in sales in November, world’s largest retailer Wal-Mart squeezed out 1.6 percent growth in December. The nation’s second largest retailer, Federated Department Stores Inc., reported a 4.4 percent increase in same-store sales for December 2006. Total sales fell 8.5 percent to about $5 billion for five weeks ending December 30. For both November and December combined, Federated reported same-store sales increased 5.7 percent.
Retailer J.C. Penney Company reported same-store sales for the five weeks ending December 30 rose 2.6 percent. J.C. Penney noted that both fine and fashion jewelry experienced strong sales performance.
The star of the discount world was Costco, which had 9 percent growth, although 3 percent of that was due to a calendar quirk that added a day to the month.
Finlay Enterprises Incorporated, which operates fine jewelry counters at department stores, reported same-store sales for November and December rose 1.6 percent.

This holiday season, online retailers of jewelry and watches were one of the biggest winners. According to estimates by comScore Networks, online sales of jewelry and watches were up a staggering 66 percent this holiday season. In fact jewelry and watches were the fastest growing product category for online sales. During the first 50 days of the holiday season, total online retail spending reached $21.68 billion, a 26 percent increase from 2005.

Retail stores continue to be a favored jewelry brand-building strategy. Italian fine-jewelry company Pomellato is the latest to jump into the U.S. market, opening its first U.S. store on Madison Avenue in New York. Pomellato is no stranger to retail,though: there are now 25 Pomellato stores worldwide. The brand has been advertising in U.S. consumer magazines and the New York Times magazine for several years with a distinctive campaign featuring Nadja Auermann. The company says it will open four more U.S. stores, two on each coast, by 2010. Pomellato’s new 1,800-square-foot store in a turn-of-the-century mansion on Madison at 64th Street, with 16-foot-tall windows offering a view into the store. The brass door handle was designed to resemble a Pomellato ring. Wood screens serve as a backdrop for the front window showcases and as partitions. An original exposed brick wall serves as a backdrop for artwork by Taiwanese artist Michael Lin. The store also includes a private selling room, furnished with a vintage table and chairs.

Perhaps the most succinct and devastating critique of the diamond industry and its efforts to defuse the controversy created by Blood Diamond comes from comedian Stephen Colbert, on the Colbert Report, a four-times a week deadpan pitch-perfect parody of Rush Limbaugh and Bill O’Reilly. The critique of the diamond industry takes place in The Word, the signature comedy segment of the show (with printed subtext commenting on and undercutting Stephen’s monologue.) The Word is “Clarity.”
You can view the video through that link, but here’s a preview: “The point is while it’s horrible to hear about these human rights violations a lot of it is hype. Let’s look at the facts. The diamond industry is now regulated by a rigorous oversight system called the Kimberley Process. (”A diamond is like, totally forever.”) The Kimberley Process tracks diamonds from mine to store to make sure incoming shipments are conflict free, (Until they reach married couple) and it relies on what is historically the best way to check industrial human rights abuses: voluntary compliance and self policing. (Works for global warming) The best part is the guys who came up with the process if the diamond industry. They’re not gonna lie to themselves! (If they do, they’ve go perfect make-up gift.) So clearly they’ve cleaned up their act but the word isn’t out, someone’s got to spread the message. Well riding to the rescue is hip-hop impresario Russell Simmons. Mr. Simmons just came back from a fact finding mission in Africa where he found “diamond mining today ninety nine and 3/4 percent clean.” That is 31/100th of a percent cleaner than Ivory Soap. (Ivory Coast still dirty) If there were any real problems with the industry, one of the De Beers representatives who led Russell Simmons on his tour would have said so. (Falling on def ears) Plus Simmons will clearly bring an objective view to this issue. For proof, just check out his jewelry company, where you can get your lady a Hello Kitty yellow gold pavé diamond ring. What better way to tell her: I love you, I don’t want to exploit anybody, and I wish you were a 12-year-old Japanese girl. So this Christmas folks, head on down to that jewelry store and remember, nothing says “I love you” like spending the monthly food budget on a pair of earrings she’s afraid to wear in public. (Except to “Save Darfur” gala) And all that really matters is that diamonds are beautiful, and something that beautiful could only come from a beautiful industry. (A beautiful mine).”

An article in the New York Post today called Diamonds Without Guilt suggests that consumers looking for alternatives to “politically incorrect conflict diamonds” choose synthetic diamonds instead. The article, which also suggests diamonds from Canada as an alternative, goes on to spotlight Solaura jewelry set with Gemesis synthetic diamonds, Canadia brand diamonds from Canada, Rand brand diamonds from South Africa and Botswana, and Brilliant Earth, an online retailer who sells Canadian diamonds and has generated a lot of publicity about the conflict diamond issue. The article is full of little mistakes which make it a little hard to take seriously. (Fittingly, Guilt is misspelled on several of the links to the online story) Rand diamonds are said to be from Arapa and Jaaneng, not Orapa and Jwaneng, Canadia diamonds are available at “Fortune-Off.” (Seriously: the New York Post has never heard of Fortunoff’s?) The lead of the story is that synthetic diamonds are 75 percent less than natural but the price comparison is based on the best colors of fancy colored diamonds. Much later in the story the article explains that synthetics are only about 10 percent less than natural colorless diamonds. But the story is a big publicity boost for Solaura, the brand that sightholder Michael Werdiger created to sell jewelry set with Gemesis synthetic diamonds. The article even refers to the Solaura site, where you can see a pretty impressive list of retailers that carry the brand. It’s probably less beneficial for the other brands mentioned just because some readers may think that they sell synthetics too.
Ready to read more about conflict diamonds? With Blood Diamond already in previews and officially opening this week, you have no choice, really.
The New York Times had an article on Blood Diamond this weekend called Hollywood’s Multifaceted Cause du Jour. The point was basically that an industry that lives by celebrity placement and endorsements can also die by them.
Today’s USA Today is skeptical that a message movie about Africa will be a big-budget success. The article, Blood Diamond in the Rough, is pretty balanced, with quotes from Sierra Leone and not just the usual suspects. I’m getting pretty tired of all the diamond puns in the headlines though and the movie doesn’t even open until Thursday.

How does a downtown independent jeweler grab some attention on Black Friday? Northeastern Fine Jewelry on Union Street in Schenectady or Western Avenue in Guilderland, New York, decided to try some attention-getting gift with purchase promotions. The store offered a free iPod Shuffle with any Black Friday purchase totaling $399 or more and a free 15″ Polaroid flat screen television with any purchase of at least $1,000. How did it work? Well, pretty good from a sales perspective. Northeastern gave out 40 flat screen TVs and 30 iPod Shuffles. But the store was also hoping to attract the attention of the hordes of media out reporting about Black Friday crowds. According to Northeastern’s public relations representative Mark Bardack, the lure of the mall was too seductive. “One of the largest malls in the country is based in Albany, Crossgates Mall, so the media habitually gravitate there to do Black Friday stories. With limited media staffing on Black Friday, it was all about the malls.” Still, Bardack thinks with more promotion and lead time, a better result might be possible. So start planning for next year! Half-price diamonds before 8am? Breakfast at Northeastern (or your store?) Maybe next year Black Friday can have a bit more sparkle.

With Blood Diamond opening next week, the entire weight of the entertainment industry seems focused on examining how ethical the diamond industry is. But the same pressure from consumers for corporate responsibility applies to the movie business too. The Times in London recently published an article on the ethical practices of Hollywood, including Blood Diamond, called How Ethical Is This Movie? “The movie, set within Africa’s illicit ‘conflict diamond’ trade, has become involved in a very public debate about the nature of ethical film-making. Here, thanks to a scurrilously leaked, or concocted, media report about the movie’s allegedly cavalier attitude towards its African extras, the film-makers have been forced to highlight the existence of their own philanthropic Blood Diamond Fund. On top of the $40 million that the movie has pumped directly into the local Mozambique economy the fund has already raised an undisclosed six-figure sum for charitable works in the area,” the article says. The “allegedly cavalier attitude” comment refers to the report (denied by the filmmakers) that the filmmakers didn’t deliver on promised prosthetics for the amputee children who appear in the film. Gossip columnists also seized on the loss of a hand by one of the South African special effects technicians during his work on the film. The Times article notes some highlights of “Hollywood’s dirty history.” The Beach bulldozed Phi Phi Lay island in Thailand to create its set, Lord of War basically really did run guns, and the classic The African Queen’s director John Huston shot elephants while on set in the Republic of Congo.

This morning, the Today show took a look at a diamond’s journey from mine to market, tracing the pipeline from Jwaneng mine in Botswana (probably footage left over from Matt Lauer’s visit there a few years ago) to sorting at the DTC in London to cutting on 47th Street in New York. Although conflict diamonds are mentioned, they are mentioned in context. The piece says that diamonds should “bear a certificate that shows where they come from.” Neither the upcoming movie or the Kimberly process are mentioned. The obligatory happy couple is thrilled that their diamond takes a year to move from mine to market and is touched by so many people. A story on Blood Diamond this morning in Newsday newspaper in New York? Less positive: “The memory may be a decade old, but the hunk of glistening carbon on your finger reminds you, whenever it catches your eye, of that giddy little scene: the velvet box, the few portentous words. Would it taint the romance of the stone to think that a slave under the eye of an 11-year-old armed with an AK-47 might have scooped it out of the fetid black mud of Western Africa? That he might have handed it to overseers who exerted their control by hacking off miners’ limbs with machetes? Or that a smuggler might have slipped it into a condom and then swallowed it, only to be disemboweled by a rebel soldier determined to retrieve it?” Charming. Expect more of this each day, as we count down to the opening of Blood Diamond on December 8. One interesting event scheduled is a press conference on December 5 with Russell Simmons and Kimora Lee Simmons, co-owners of Simmons Jewelry Company (and not-so-happy couple) who will have just returned from a nine-day journey to South Africa, Botswana and Mozambique. Simmons will announce “major historic initiatives pertaining to Africa and the diamond industry by the Simmons Jewelry Company.”

Just in time for the holidays, a new exhibit at the American Museum of Natural History celebrates our long love affair with the shiny yellow metal. The blockbuster exhibit Gold is especially strong on gold’s geological occurrences. Case after case of nuggets, crystalline gold, and fantastical naturally occurring shapes really demonstrate how this love affair got started. No one who came across one of these gleaming miracles of nature could help but treasure it. The exhibit also has impressively displayed gold bars and coins, including some sunken treasure. And the examples of pre-Columbian gold artifacts from Panama are particularly nice. All told there is a ton of gold on display: none as impressively as three ounces that are pounded into gold leaf that covers the walls and ceilings of a 144 sq. ft. room. But the exhibition is a little disappointing when it comes to modern-day artistry in gold. The gold jewelry on display is limited to a few pieces. For more modern gold, you have to go to the gift shop, which has some nice gold souvenirs. Styles available include hammered designs by Toby Pomeroy, LiveWire hoops by Dana*David, high-karat styles by Yossi Harari, charms by Tracey Zabar, and a selection of vermeil looks. The exhibit runs until August 19, 2007.