Synthetic Diamonds

Martin Rapaport hosted a town-hall discussion the subject of synthetic diamonds at JCK on the Monday morning.  Being so late in the calendar of events (not to mention, the morning after JCK Rocks the Beach with Train,) the turn-out was pretty good.  Mr. Rapaport respectfully gave a lot of time to synthetic diamond promoters to state their case for the industry to embrace their product.  As that time was drawing to a close, Martin predictably attempted to turn the tables on their arguments; using phrases like “bullshit” and “parasitic leeches.”  It wasn’t all acrimony, and there were plenty of industry members who were there to advocate for the traditional natural diamond market.

Here are a few things you should think about when contemplating the roll of synthetic diamonds in our industry:

What do we call them?

·      Much has been made about the use of words and phrases like artisan created, foundry diamonds, lab-grown, cultured, mined diamonds, synthetic, etc. 

o   Rapaport maintains that the proper gemological classification is “synthetic diamond.”

o   Synthetic producers will attempt to use whatever euphemisms to romance and market their own product. 

How should we view synthetic diamonds?

·      Their product is only relevant in the jewellery industry because jewellers and the Diamond Promotion Service spent countless millions of dollars over decades, convincing the world to buy diamonds.

o   They’re not going away.  Producing flawless diamonds could be the “holy grail” to producing Qubit or quantum computers that can store exponentially more information than current technology.

o   After a period of adjustment, they might well prove to validate the worth and desirability of natural diamonds.

o   In the same way that we cannot identify and certificate small Canadian diamonds, synthetic producers acknowledge that synthetic melee will likely never be identifiable.  Currently there are synthetic melee on alibaba.com for a fraction of the price of natural ones.  How long before those allow an unscrupulous manufacturer who doesn’t disclose their origin to gain an unfair price advantage?

Will you sell synthetic diamonds, only to risk what you sold for $7,000 becoming available for $2,000 in a few years when their prices come down?

·      Dissenters believe that as technology and the number of growers increases, the value of synthetic diamonds will drop precipitously.  What now costs 30% less than a natural diamond could devalue to 80 or 90% less than natural.  Maybe even to $100 or $200 per carat.

o   Synthetic diamond proponents could not quantify how many labs and/or foundries are currently competing to produce lab-grown diamonds.  Further, they attempted to convince the gallery that due to the energy required, time-frame and percentage of failure, that prices cannot drop to nominal levels.

Can you endorse a product that Rapaport calls a “parasitic leech” to the natural diamond industry?

·      Natural diamond proponents maintain that those promoting synthetic diamonds are unfairly benefitting from decades of promotion and investment by the natural diamond industry.  Lab grown diamonds did not create a market for their product, they’re riding on the coat-tails of the natural diamond industry.

o   Synthetic diamond producers claim that they are simply filling a demand in the marketplace.  “If The Signet Group needed 1,000 one carat SI/G-H colored diamonds and the traditional (natural) diamond market can’t supply those, then lab-grown diamonds can fill that order.”

·      Sceptics accuse synthetic diamond producers for taking advantage of the value of natural diamonds to make unfair profits

o   Synthetic producers admit that they are charging what they believe “the market will bear,” and couldn’t deny that the prices they charge are linked more to natural diamond pricing than a “cost-plus” value.

o   A common sentiment was that getting down to cost-plus value will inevitably happen when competition and better technology increase.

Are synthetic diamonds an answer to Millennials desire for ethical and environmental products?

·      Lab growers assert that their diamonds avoid harmful mining practices and that there are no synthetic “blood diamonds.”

o   Rapaport emphatically defends the estimated one million artisanal miners in Africa whose entire livelihoods depend on first-world consumption of natural diamonds.

o   Nobody asked what kind of environmental impact is required to produce synthetic diamonds, but nuclear reactors were mentioned as part of the process.  If anyone knows whether that’s just to produce power, or if it’s part of the crystal formation process, please post your comment below. 

Are synthetic diamonds going to become as inconsequential to natural diamonds as other synthetic gemstones?

·      Synthetic emeralds, and sapphires haven’t eliminated the demand for natural ones; rather they have arguably created more reverence for the natural ones

o   A speaker against synthetic diamonds pointed out that retailers still deal with confusion over Grandma’s ruby which the inheritor believed was real, because “Grandma had money, and she never would have bought something imitation.”  Then they assume a jeweller must have switched the ruby.  Most of us in the industry can spot a synthetic ruby from across the room, but diamonds take laboratory scrutiny to identify.  Synthetics will cause massive errors in identification, and with a growing disparity in value these errors will cause front-line jewellers big problems in the future – unless they are indelibly marked.

Just imagine these scenarios, not too far in our future:

Buddy goes out to buy a diamond engagement ring for his sweetheart.  He wants to buy her a one carat diamond, but his budget affords a 3/4ct diamond.  The jeweller offers him a 1ct synthetic to accomodate his budget.  He buys it, and gives it to the girl without telling her it’s synthetic.  They tragically part.  She goes into a pawn shop and sells the diamond.  The pawn broker says, “I’ll give you $1,000 for the diamond because it might be synthetic.”  The pawn broker now owns a diamond that he’s not sure about.  Is he going to sell it as “possibly synthetic?”  Will he identify it by the laser inscription as synthetic?  If he knows it’s synthetic will he have the laser inscription rubbed off?  Will he sell it to a retail jeweller who resells it as natural?

It’s a lot to think about!

Let's Get Frank!

It's time to stop pussy-footing around important issues in our industry.

The world has become increasingly open to talking about things that were in the past considered indelicate.  Feminine hygiene, bladder leaks, bum-wiping and impotence are all boldly addressed during prime-time commercial breaks.  The world seems willing and even eager to brashly dive-in head-first to tackle problems formerly hidden in closets, and buried under mattresses.

Is the jewellery industry keeping up with the times?  Are we brashly standing up for our industry and our businesses?  Why do we pull punches.  Are we the embodiment of the polite Canadian stereotype?  Are we afraid of getting sued?  Do we have too much respect for our competition to somehow maliciously degrade them?  We probably don’t want to appear negative by putting someone else down.  Maybe we just don’t have good answers to some of our more embarrassing problems.

I enjoyed hearing about how a jeweller in Ontario posts a sign in his store titled “travellers alert.”  This sign points-out the real risks of buying jewellery while on vacation.  We can all testify about friends and clients who bought ridiculous jewellery while under the influence of margaritas, sunscreen or whatever it is that causes the irresistible urge to buy stupid things.  Independent jewellers can do a better job of warning our clients of the risks.  At the same-time you can also coach them on what kinds of things they should feel free to buy while on vacation.  How many times have I sold someone a $1,000 or $2,000 setting for a  $25 gemstone they bought on a cruise?  You’ll have a hard time competing with the experience of picking-out an opal in Australia, but if you tell them what kind of opal to look for, and then help them create a setting for their precious souvenir, you can be a hero and make a few bucks yourself.

Internet retailers are slamming you every chance they get.  They’re not afraid of telling your clients how inconvenient it is that you’re not open 24 hours, how much pressure it is shopping with you and how much you overcharge for your jewellery.  Are you just going to just take that lying down?  How about reminding your clients that you offer 60 more hours per week of opportunities to see, touch and feel real live jewellery (before they buy) than internet retailers?  You can stand-up for yourself, and say, “we who live in, work and support this community appreciate and need you shopping local.”  Spend time, effort and money reinforcing the value of hand-selected quality designs that are waaay more sought-after than the photo-shopped trashy leftovers available 24/7 on the worldwide dumping ground.

If you’ve invested the time actually looking at jewellery sold by volume retailers you might just be appalled enough to begin calling a spade a spade (or a F---ing shovel).  There’s so much frozen spit, misrepresentation, tinfoil-thin settings, rejection quality gemstones and truly impractical designs out there that you should be indignant, insistant and assertive when it comes to blowing your own horn!

Do you believe that you can’t compete against the volume buying of chain stores?  If you do, give up.  Do you think the industry will eventually get swallowed-up completely by the interweb?  Might as well pull the plug right now.  If you are convicted that as an independent retailer you have unique and high-quality jewellery, and that your delivery provides clients with unparalleled benefits, then I think you just might go somewhere in this business.  Don’t be shy.  Stand up for yourself!

The 2014 WCJE

It's a whole new ballgame without DiGem and The Martin Ross Group

WCJE 2014

Well another show is in the books.  How was the show you ask?  Let me tell ya.  The big buzz was about the pending closure of the Martin Ross Group.  When A&A closed down it was big news in the industry, but Libman and Master Design both at the same time?  Monumental!  The void was already felt with their absence as exhibitors.  They weren’t the only ones missing, and the show was noticeably smaller than last year.  Without those two suppliers, this show offered their dealers a chance to source alternatives, but more on that later…

The Canadian Jewellers Association, JVC and the “Connect for Success” committee produced an educational day on Thursday ahead of the show.  Due to set-up I couldn’t attend the whole thing, but it was very well-received by those who took the time.  I will do what I can to encourage and promote this effort in upcoming years.  Increased show participation depends on the value and excitement that this show provides to retailers.  An engaged and successful retailer will do their Fall buying at the show, offering value to the exhibitors.  And truthfully, waiting for the sales reps to come see you will NEVER give you the front-of-the-line selection, networking opportunities and one-stop shopping that the WCJE offers.

I haven’t heard any official numbers, but I’m pretty sure attendance by retailers was down.  Without the annual general meeting and festivities surrounding the disbanded DiGem buying group, their members had one less reason to make the trip.  Some have joined the CJG, and attended the buying show the previous week in Toronto.  But little of the drop in attendance can be blamed on buying groups as there were quite a few former DiGemmers in attendance, including my good friend Connie Kitigawa.  We will always welcome her participation in the industry and our lives due to the contributions she’s made to Digem, the industry and her friends.  Over the past 5 years, DiGem raised over $75,000 for charity through their “Digem Decadence” dinners and the Edmonton show, and even though the event was missed, the amazing impact on those charities endures as a legacy of the group!

…back to the Martin Ross thing.  Corona put on a very impressive 55^th anniversary show of their own with a large addition to their usual space, including diamond cutting demos and a luxurious hospitality lounge.  While they stand to gain a lot of business from Libman and Master Design faithfuls, there will be circumstances where exclusivities, loyalties, flier program conflicts and capacity issues will have to be weighed-out.  It’s going to be a busy season for Corona and other suppliers (including myself) trying to adjust to these new realities!

I hope that it’s a long time before we forget the innovation, inspiration and enrichment that Mark Libman and the late Varouj Arkarakas (Master Design) contributed to our industry.  They were only successful because they helped so many retailers enjoy their own success.

Okay, so this turned into a sort of obituary for Martin Ross Group and DiGem.  On the bright side, those who came were upbeat about their prospects for a robust Fall season.  We sold some pretty amazing one-of-a-kind delivery pieces, leaving us working hard to assemble like-product for me to show you if I’m coming to see you soon.

Trend Spotting

Design Trends to be Revealed at Western Canadian Jewellery Expo

The summer jewellery shows are fast approaching.  Among the many important functions of attending trade-shows is seeking-out new trends.  You don’t want to miss-out on the latest and greatest.

What will be the trends for Fall 2014?  What is a trend?  How long does its’ popularity have to endure in order to be considered “trendy.”  Is it nothing more than something popular?  If that’s the case then aren’t boring run-of-the-mill designs that appeal to a broad audience trendy?  Is it important to carry trendy designs, or can you distinguish yourself in your marketplace by promoting counter-trends?  What does it take to start your own trend?

These questions and more will be discussed at the Western Canadian Jewellery Expo’s Connect for Success seminars on Thursday August 14^th – the day before the show starts.  Yours truly will be moderating a panel that includes Lilian Jensen from Customgold, Irina Lychak of Canadian Jeweller Magazine and Montreal based jewellery designer, Claire Vessot.

Other speakers will address “Top 10 Mistakes in Jewellery Display,” “Understanding Jewellery Crime Trends in Canada” and “Social Media Marketing.”  Rumor has it that there may be a round-table discussion after the seminars where you can corner the speakers and discuss hot-button issues.  Visit cjexpos.com for more information about the show.

I hope to see you there!

C’mon PEOPLE!

If you don’t receive Aleah Arundale’s (formerly Seagal) emails from Olympia Diamonds, they’re extremely well-done, have thought-provoking marketing and product-knowledge messages, and appear to be highly effective at promoting her business.  Her recent email focuses on making big promises in your advertising.  In her words;

Your claim could be "If you buy her a big diamond, you will never have another fight and your teeth with be whiter!!"  Silly? Yes, but it made you smile, pause, and there is a little bit in all of us that wants to believe it is true....

I’ve quoted David Ogilvy before, who said, “the heart and soul of advertising is; A BIG PROMISE."  I believe in making big promises too – as long as they’re hyperbole as above or genuinely beneficial to your audience.   A certain department store believes in making big promises that are neither humorous, nor genuine.  Today only, you can buy a pair of 1.5ct tw diamond studs and save over 75%!  That’s a pretty MASSIVE promise. 

Hmmm.  Didn't we just pass through “Black Friday?”  Isn’t that the day where merchants begin to operate in “the black?”  What are you saying, famous vendor of striped blankets?  Are you saying that we’re in the most lucrative season for merchants and you’re so desperate for cash that you’re willing to sell those diamond studs for less than you paid for them?  Are you saying that you typically mark product at 4-times your cost, and these are being sold AT COST?  Are you saying that someone who bought those same earrings yesterday paid 4-times today’s price?  Will they be getting good value if they purchase them tomorrow at 4-times that incredible price?  Has anyone, in fact, ever paid you $8,000 for those diamond studs?  Are you promising me that I’d have to pay $8,000 if I bought the same quality of diamond studs elsewhere? 

When consumers see this massive discount, is there a part of them that smiles, pauses, and wants to believe it’s true?  I’m sure there will be some misguided dupes.

Is it possible, oh historic Canadian merchant named after a large body of water which borders Northern Ontario, Manitoba, Nunavut, and Quebec that you bought really crummy diamonds for less than $1,999, put them in 18kt gold settings to make them seem valuable, and then pulled an outrageous retail price out of your @$$ that was 300% more than what you wanted to sell them for so that you could WOW people with a 75% discount and still make a profit? 

My money’s on this latter scenario.  It might have to be if they sue me because some of you repost this to your clients and the unnamed department store’s legal department takes offense.

TW

Orm Shultz will be missed!

Entrepreneur, gentleman and well-respected member of the jewellery industry Orm (Ormand) Shultz passed away on Monday night.  Warrington’s Jewellers closed its’ doors almost one year ago after 48 years in business and 39 years in Prairie Mall.  The family still owns and operates Jonathan’s Jewellers in Prairie Mall, and along with the long-serving staff will miss “Mr.’s” leadership and encyclopedic knowledge.  As a sales rep, I was often astounded at his ability to identify his fast-selling designs without the aid of a computer.  With two stores and dozens of suppliers I always received a fair dose of undivided attention from him; which is why he had won numerous “Gold Nugget” awards from the rep’s associations when there was such a thing.  My thoughts and prayers are with his family and staff during what will continue to be a very busy month no matter how heart-sick they feel.

Reflecting back on one of the darkest times in my life and career, I recall being able to put-on a “good front.”  It’s not easy to focus on celebrating happy moments with your clients when you feel little joy inside.  This is the difference between a professional and an amateur in jewellery sales.  I don’t know anyone whose lives have been sunshine and rainbows the whole way along; yet some have the ability to rise to the occasion whenever a client walks through the door.

I think the key is this: as soon as a client walks through the threshold, your focus is on their needs, their emotions and finding a winning solution to their current circumstance.  Whether you’re in the middle of a personal crisis, or just absorbed in busy-work as part of your responsibilities in the store, you need to be “other-centered, servant-hearted people” to your visitors the instant you spot them even thinking about coming in.  If you’re grieving or having some personal difficulties, share it with your owner or manager, and tell them you’re going to try to focus on clients in order to do your job the best you can while you’re on the clock.  Ask them to give you feedback if you’re not accomplishing that.

Look, it’s not about fake-enthusiasm in this business.  It’s about a solid conviction that your store and your product are the best possible solution to your client’s needs and desires.  When you put the person across the showcase from you first, and you know the amazing benefits of dealing with you and buying what you have to sell, you can push through any personal crisis and be effective.

Edmonton Show Report

What an interesting three days in Edmonton!  As some of you are aware there are new owners in place for the Western Canadian Jewellery Expo.  For Phil and his crew, they wanted to make sure that their inaugural show was both exciting and secure.

For excitement, they moved the show opening reception to Ruth’s Chris Steakhouse.  The lower level was cleared of tables, and an open cocktail reception (sponsored by Jewellers Mutual and the Canadian Jewellery Buyers Group) welcomed those of us not out on the Marriott’s patio with Corona.  Although a bit warm down there, Ruth’s Chris put-on a great reception featuring rib-eye sliders that were to die for.  The show also featured a draw for a brand new Lexus; not just a one or two year lease, the whole car – sponsored by Gold Star and Canadian Jeweller Magazine.  The winner was De Vo, owner of Paris Jewellers (as if he needs it!)  This year, the sixth annual DiGem Evening of Decadence was moved to The Sutton Place Hotel, and the beneficiary was Little Warriors; a very worthy charity who not only work on prevention of child sexual abuse, but are building a camp to act as a treatment center for victims.  There are three treatment centers in Edmonton for rehabilitating sexual predators, but this will be the first in Canada to treat the victims.  Well-done Connie and her team!  Yours truly was among those who shut the place down after dancing-up a storm to the awesome Dr. Zeus and the Blue Whos.

On the safety side, I don’t think I’ve ever seen so much security at a jewellery show.  When a lightening strike set-off an alarm, the Convention center was locked-down for two hours on Saturday afternoon; traditionally the busiest day of the show.  Edmonton’s finest were strolling the show sporting automatic assault rifles during all show hours.  I witnessed a police dog sniffing around under the loading dock ramp, and three Suburban’s full of tactical squad members were present for the mobilizing of the armored cars at the end of the show.  When Steve was within a few blocks of the Convention Centre on Sunday afternoon with our rental truck, he was pulled-over by the police, searched and questioned to ensure that he didn’t have a van-full of bad-guys.

To my knowledge there were no security breaches, and that was likely because of the extraordinary effort of all security staff.  I heard second-hand that when the new owners launched their website for the all-new “Canadian Jewellery Expos” that 600 out of the first 1000 hits were from Columbia, a prime source of both emeralds and jewellery thieves.

While the extra security may sound intimidating, it made me feel safe and secure so that we could enjoy the most important networking event of our year.  Congratulations to Phil & Geoff Payne and to Lilie Ford for keeping us safe and providing the ideal meeting-place for our Canadian jewellery industry!

Deadline approaching…

Kudos to those of you who have supported your fellow jewellers, Wayne and Joanne Austen of High River; in the aftermath of Alberta’s catastrophic flooding.  Donations have been trickling in, and the amount continues to grow.  Their showcases were literally obliterated and washed away.  The restoration workers have stripped the building right to the outer walls.  Think of an amount in dollars that it takes to build and furnish a medium sized jewellery store including showcases, flooring, lighting, furniture, computers, etc.  While their home was covered by a flooding rider, jeweller’s block insurance does not cover such an event and government disaster relief is offering up to $15,000 in aid (should their application be accepted.)  If you have yet to offer-up your contribution, please do so before July 31^st.  I’ve sent mine, and it’s heartwarming to see the sacrifices being made for a fellow jeweller in need. 

***If you feel moved to contribute to their rebuilding, please send a cheque to one of three venues marked “AUSTEN’S”.  Please make the cheque payable to the association, so that they can amalgamate the funds and then make a presentation on behalf of all of the caring jewellers who participated

CJG

8 Centre Street N

Huntsville, ON

P1H 2C2

DiGem

G7, 5550 - 45 St.

Red Deer AB

T4N 1L1

Jewellery Store Washed Away in Flooding

Best wishes, and prayers go out to Wayne & Joanne Austen of High River, Alberta whose newly renovated store was nearly gutted by the flooding last week.  As the waters began to encroach upon downtown streets where Austen Jewellers is located, Wayne was attempting to “batten down the hatches,” when the first of the large picture windows in an adjacent gift-shop imploded.  He then helped a few ladies through the chest-high water to safety, during which time he had an acute revelation of how dangerous the forces of this rushing water could be.

Today the Austens remain in nearby Okotoks, awaiting the green light to return to their home, which thankfully appears to have sustained very little water infiltration.  Having lost three vehicles to the flooding, one has already been settled with insurance.  Still no word on what roll insurance will play in the building which plays host Austen Jewellers, a gift-shop, eye-wear store and other businesses; nor on whether his business insurance will cover the furniture and fixtures.  The initial news reports state that homeowners insurance would not normally cover over-land flooding, but Provincial and Federal disaster relief will be in-place shortly to help repair what insurance doesn’t.

If insurance and disaster-relief fails to help the Austens rebuild their store, can anyone out there suggest a way in which we as an industry can pull together to assist them?  I haven’t asked, but maybe some temporary showcases will be required until insurance and contractors are arranged.  Let me know if you have any thoughts.  I won’t try to “pass the hat,” or organize anything until we know more about available aid. 

For now, just keep them in your thoughts.  Send them an encouraging note if you know them.  Appreciate your warm and dry store, knowing that any one of us could have been affected by a natural disaster.

3rd Avenue West looking West - High River

3rd. Avenue West looking East - High River

Austen Jewellers is located where the beam is sticking out of the window

Bat-Sheba Gift Shop, adjacent to Austen Jewellers - where the first picture window let-go

Alberta Premier Allison Redford sees first-hand the incredible destruction