RAPAPORT... The traditional fancy shape diamonds still carry on the old, mythic, elusive practices of the diamond trade: Consumers’ strong personal tastes, and not grades on certificates, determine sales. And it is difficult to grade the qualities of shapes and cuts objectively as is done for round brilliants. Probably because of these reasons, fancy shapes are traded cheaper than round brilliants of the same sizes, colors and clarities. “They are offered to customers as alternatives to round brilliants. Dealers tend to move fancies when selling round brilliants gets tough,” said a dealer in Okachimachi.
Some Like it FancyKuwayama Corporation, a major jewelry manufacturer/wholesaler that recently opened a retail store, does not see specific sales movements among fancy shapes, nor premium prices on fancy shapes over round brilliants. However, the company noticed there are certain consumers who show strong attachments to particular shapes. The pear shape, squarish stones such as the princess cut, and the heart shape are among the movers, reported Kuwayama. While fancy shapes are generally priced 20 to 30 percent lower compared to round brilliants of the same qualities in the market, 2 to 3 carats, D through F color, IF through VS clarity are among the best-selling conventional fancy shapes at the higher end.
The newly developed branded fancy shapes, however, may be playing in different arenas, although there are not many in the market. Hope International Inc., one of Japan’s few diamond manufacturers, produces precisely cut round brilliants and, in recent years, the Square Ideal Cut, both of which exhibit hearts and arrows, an optical effect observed when stones are cut to specific measurements. “These newly developed branded fancies require extra attention and extra hands in processing, so people expect such stones to be more expensive than round brilliants,” said Toshiyuki Kurihara of Hope. “But we sell Square Ideal Cuts at similar prices to those of round brilliants.
“Fortunately for us, a prominent foreign merchandiser introduced new lines with cushion cuts, which ignited the demand for our Square Ideal Cut,” continued Kurihara. In addition, Hope now produces sizes as small as 1/400 carat that still exhibit hearts and arrows. Chinese setters, who have developed skill in micropavé-setting using microscopes, are able to fashion extremely delicate and elaborate designs.
Demand LiftsAs demand for such stones gets stronger, Hope is working closely with jewelry manufacturers and retail marketers and is now producing on an original equipment manufacturing (OEM) basis. Orders are in for the entire year. “At this moment, I am not allowed to release the names of the marketers, but perhaps by the time this issue of RDR is out, I should be able to,” said Kurihara. Square Ideal Cuts are available up to 3 carats. “Technically, we can manufacture larger than 3 carats, but the problem is obtaining rough for larger sizes — it is not easy,” said Kurihara. Hope is buying rough through tenders directly from seven mines in South Africa.
Flanders cut is another branded fancy cut marketed in Japan. Currently, there are two agents in Japan who represent Flanders Cut International NV of Antwerp, Belgium. One of them — Flanders Diamonds Japan Co., Ltd. — has been marketing the loose stones for the past 18 years but recently switched to wholesaling the cuts in finished jewelry to department stores. SunWakatsuki Ltd., the other agent, began selling loose Flanders cuts this past January.
The contour of Flanders cut is octagonal, but other than that, the stones are faceted very similar to round brilliants. There are advantages and disadvantages in selling such stones. The most conventional fancy shapes lack the brilliance of round brilliants, but Flanders cuts display the same brilliance that rounds do, which is an advantage over other fancy shapes, said Hirofumi Wakatsuki of SunWakatsuki. Flanders cuts are sold at prices similar to those of round brilliants. “Compared to conventional fancy shapes, it is a premium. And whatever volume we import, we sell them right away,” he continued. Since the production of Flanders cuts is controlled, there are no surplus supplies and no price deterioration, said Wakatsuki.
The disadvantages in selling Flanders are that because of the cut’s similarity to rounds, it can be hard to distinguish the difference from rounds, particularly when sizes are smaller, and setting the stone is more difficult because of the octagonal contour. Some setters demand extra pay for the work.
Flanders cuts are available in all sizes, said Kazuaki Narita of Flanders Diamond Japan, but since their business has shifted from supplying loose stones to finished jewelry, they use smaller sizes more. The jewelry is sold from 300,000 to 10 million yen ($2,500 to $85,000) at retail, but most sold are typically priced under 1 million yen ($8,500).
The Marketplace• Prices of 3 carats+ are very strong. Although the yen gained strength over the past month, it has not slowed foreigners buying in Japan. Dealers are having difficulty replenishing inventories, despite a sluggish domestic market.
• The fancy shape capes, which have a price advantage over round brilliants, are also gaining strength. Prices are strong, particularly for 3 carat+.
• Bridal items of below-carat pointers are slow.
• Smalls, stars and melees of better qualities are also strong.
Article from the Rapaport Magazine - April 2007. To subscribe click here.