It’s a tough time to be a jeweler. Diamond and metal prices are soaring. GDP, earnings, consumer confidence, real estate values, and even employment are tanking or leveling across the country.
Unless you happen to be downtown in Lewiston, Idaho, where Michael Haines’ freestanding Diamond Shop, in business since 1926, has picked right up from its 2007 banner year. While most independents worry where margins might come from these days, Haines is wondering: “She has the wedding set, she’s upgraded to a 2 carat solitaire, she has the strand of pearls, the tennis bracelet. What do I have to show her that’s new?”
That’s an optimism that comes only from taking control of your business model, particularly if it’s one that finds profit in providing service, fair prices, and inventory to your community such as affordable precious stones for the budget-conscious, and the full line of diamond jewelry—wedding sets, three stone rings, earrings, tennis bracelets, and “Journey” pendants—designed and/or mounted in-house. It also doesn’t hurt to know you “got in on the ground floor” of what’s proven to be the jeweler’s most sustainable niche for some time now: fancy color diamonds.
For years, they were Haines’ little secret, his and the handful of others bitten by the fancy color bug. After his doors were closed, he’d often bring them out, “like a kid with his best marbles and colored stones,” he laughs now, and arrange them in layouts of flowers, insects, pastoral scenes, or simply pair two, three, four in a white tray and soak in the color combinations. The 40 point violets, 70 point greenish-oranges, 50 point blues, or a lime-green with that 1.60 chameleon that went from almost a citrine tint to a forest green. And how that 1 carat orangey-pink marquise with brown overtones melded with the widening array of chocolate, cinnamon, clove, or honey tinted diamonds that arrived after he’d joined up early with the “Champagne Registry” spearheaded by Argyle.
“Shame on all of us,” he says, “for not educating our customers better. And shame on me for kind of keeping this my little secret so long. It took 16-year-olds coming into the store and asking for pink diamonds to realize the tide had turned. Not to mention QVC customers who knew more about fancies than my associates. The TV shopping networks did more to educate and romance these stones than us. Now, you can’t pick up a fashion magazine without seeing one, and when I go to shows like the IJO in Philly this summer, I’m preaching to the choir.”
“It was hard to see, for so many years,” says Robert May, a former retailer whose career has taken him through the Diamond Promotion Service to Pluczenik to executive directorship of the Natural Color Diamond Association. “When I’d go to Basel in 1987, I’d pick up a stone for $3,000 and ask myself: ‘Can I get $10,000 for this?’ No one in their right mind would ask that today, unless it’s a fancy color.”
The NCDIA has played a key role in the fancy’s ability to command margins by promoting and educating the consumer to a blind purchase, and in democratizing a niche formerly for the few to an option for every retailer. “A good 20 percent of the retailers at IJO picked up the champagne diamond program this year,” May says. “More than 150 retailers in all, finding their entree into natural fancy colors. In a severe downturn? That’s unheard of.”