It’s a challenge to discern trends at the Tucson Gem Shows.
This is due to the fact that there are so many different vendors selling widely
divergent goods, from million-dollar fancy color diamonds to dinosaur bones.
Some vendors at this year’s shows, held between late January and February 12, had strong sales, most had average sales and many
reported weak sales. The most successful were those who had a desirable niche
of in-demand gemstones or the right goods at the right price.
Sales at the Tucson Gem Shows suffered when the Great
Recession started in 2008. However, the past two years have been surprisingly
good for the high-end dealers. This probably reflects the continued demand from
international collectors, investors and jewelry buyers. Many of these buyers
are gun-shy of stock and real estate markets and are looking to further
diversify their portfolios. It gives them peace of mind to place a portion of
their wealth in high-end diamonds and gems. The middle and low-end markets
still seem weak.
Traffic was about the same or slightly down when you take
into account all 42 Tucson Gem Shows. Restaurants were packed for weeks, but
you still don’t need a hotel reservation a year in advance.
For the second year in a row, there were no new “hot” stones
to be seen at the show. Untreated and unenhanced stones remained the
most-sought-after items. The only exception to this was the low-heat Brazilian
paraiba tourmaline. Buyers also were demanding certificates confirming that the
gemstones they were buying were not treated. A large 10-carat, gem-red Burma
spinel was on view and
some green unheated Mozambique tourmaline material.
AGTA GEMFAIR
The American Gem Trade Association (AGTA) GemFair organizers
said traffic at this year’s show was comparable to 2011, the number of
exhibitors was up by about 5 percent and exhibitors reported an increased
amount of buying done on the show floor. Gemstones virtually take over this
desert city for a two-week period every February, with a wide range of shows in
a variety of venues, but GemFair is the largest.
Mike Romanella of Commercial Mineral, Scottsdale,
Arizona, rated this year’s GemFair as equal to 2011. “Interestingly, we sold at
all three levels. We sold high-end emerald and blue sapphires, middle-end gems
like Ethiopian opals and we even sold to the bargain hunters.” But he did not
see those sales as indications that the economy was back on track.
Bill Barker of Bill Barker and Company, also located in
Scottsdale, commented that “We actually did 20 percent better than 2011.”
Barker displayed a collection of fine, old stones plus Nigerian red tourmaline.
“We sold to retailers, wholesalers and manufacturers.” As opposed to years
past, the Chinese were missing from this year’s show. Barker mused, “There were
10 to 12 Chinese buyers here. They were very quiet. I’ve heard the Chinese
market died on the vine and many big dealers are now stuck with large amounts
of inventory at very high prices. It’s no wonder they’re cautious.”
Romanella’s interesting take on the market was that the only
people who will survive in the colored gemstone business will be the dealers
who buy back merchandise from old customers because those collectors have all
the fine goods. “Dealers who must travel overseas to buy merchandise are at a
tremendous disadvantage,” he added. “New goods are scarce and prices are
astronomical. I predict many of these overseas dealers will be in another
business soon.”
CENTURION
There was a different landscape to the Tucson shows in 2012
because the Centurion show — a fixture in Tucson for many years and a popular
stop for gem show attendees using a free one-day pass — moved this year to The
Phoenician Resort in Scottsdale, Arizona, a Phoenix suburb 115 miles from
Tucson. Centurion representatives, who boasted about easier, direct flights to
Phoenix, said the show added both exhibitors and retailers at the new location,
for a total of 125 exhibitors and almost 300 retailers. Still, the move was a
disappointment to some Tucson show attendees, few of whom were willing to make
the longer trip to the less convenient Scottsdale venue. In addition, fewer
Centurion retailers made an appearance at the Tucson shows.
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Jack Abraham — Precious Collection
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Jack Abraham of Precious Collection in New York City said,
“I’m so happy we moved from Tucson. The move was fantastic. I’m elated. There
was much more room because The Phoenician is spacious.” How were sales? “We
don’t really go to this show to sell stones on the spot,” he said. “If someone
needs an outstanding piece, we hope they call us. Our business is really
show-and-tell. We’re there to network and make contacts.”
Abraham contends the colored gemstone business is changing
and he speculated that “There will be a total realignment of the business in
the next few years. Look for attrition, with many colored gemstone dealers out
of the business in the next two to three years. Only the financially strong
will survive. The market will become more efficient.”
John Buechner of John Buechner, Inc. in Chicago had a
different take. “I’ve been coming to Tucson since 1974. I love the town; it’s
quaint and different, with great restaurants, like a small town. Scottsdale?
Heck, we might as well be in Orlando — it’s just another big city.”
It was a major move for Centurion and not universally
popular. The reason the show moved was not that sales were bad in Tucson but
rather that La Paloma, the former venue, couldn’t accommodate added exhibitors.
In 2011, the latecomers were located on a lower level of the hotel, where they
had less exposure to buyers. However, some exhibitors complained the layout at
The Phoenician was like a maze and even more difficult to navigate than the
Tucson space. According to Buechner, “It was worse than Tucson. It took me 20
minutes to find my booth after I went to the restroom.”
TROUBLES IN TUCSON
Tammy Moreau, who mines Oregon sunstone in the southeast
part of the state and was a first-time exhibitor at the GJX show in Tucson, was
the victim of a robbery. After the show closed, she packed her gemstones into a
trailer hitched to a pick-up truck at Motel 6 on the south side of town. As she
was checking out of the motel, one of her companions noticed the trailer’s door
locks had been cut. She estimated the wholesale value of the missing stones at
between $800,000 and $900,000. The gems were not insured and had not been
recovered at press time. “I’m just sick,” Moreau said.
In other show security issues, U.S. Immigration and Customs
Enforcement (ICE) agents arrested two gem show vendors for selling counterfeit
jewelry and seized fake goods estimated to retail at approximately $1 million,
almost $35,000 in cash and more than 2,500 pieces of jewelry. The vendors, who
were selling knock-off Tiffany & Co., Chanel, Hermes, Coach and Gucci
jewelry at three booths at the Gem and Lapidary Wholesalers show, were arrested
and released on their own recognizance. They face fraud, counterfeiting,
money-laundering and illegal enterprise charges.
GEMSTONE MARKET OVERVIEW
The high-end gem market remains strong. Prices are crazy and
goods are less expensive in the U.S. than the Far East. It wasn’t that long ago
that there were 20,000 people worldwide searching out the best stones. Now
there are 10,000. However, these buyers are strong and go after what they want.
In terms of supply, many in the industry are predicting that the jade and Burma
ruby ban will be lifted after the April 1 elections in Burma. Hopefully, this
will bring more sought-after Burma goods to the market, although Burmese
dealers say new production is low.
Article from the Rapaport Magazine - March 2012. To subscribe click here.