Rapaport Magazine
Colored Gemstone

Tucson’s Three R’s

“Restock, reinvest and revive” was the mantra for vendors and retailers attending the Tucson gemstone shows.

By Deborah Yonick
RAPAPORT... A purging of excess inventory in the past  year readied jewelers to shop again at the annual gem and jewelry shows held in Tucson, Arizona, in early February. Caution kept buyers on a short leash, but the mood was more upbeat than in 2009 at the main trade venues — Centurion Jewelry Show, American Gem Trade Association (AGTA) GemFair, Gem & Jewelry Exchange (GJX) and Gem & Lapidary Dealers Association (GLDA). Optimism looms for an upswing in business by the second half of 2010.

Manufacturing jeweler Ronald Arends, owner of Aires Jewelers in Morris Plains, New Jersey, has been coming to Tucson for 18 years. The only year he didn’t make his annual pilgrimage was 2009. “We had an excess of inventory we had to use before coming back,” he said while shopping the AGTA GemFair, noting that sales during the recent recession declined more dramatically than in all of his 47 years in business.

But there are positive signs that the tide is shifting. “Business has picked up the past few months,” Arends admitted. “Customers are buying nice things again.” Nonetheless, he remains conservative in his spending. He has always dealt in color, with tourmaline among his favorite gems for its nice impact and good price points. Believing “color offers great margins,” Arends added that his manufacturing studio has given his business a leg up to react quickly in a fluctuating economy.

Despite good business during the fourth quarter of 2009, retailer Mark Moeller of R.F. Moeller, St. Paul, Minnesota, believes it will be another year before the market shows steady, regular growth. In the meantime, he intends to enhance his “dangerously low” inventory as he finds quality products offering great value. Moeller was seen shopping the Centurion show and AGTA GemFair. He mentioned finding fun, fancy color diamond pendants and mixed Tahitian black pearl strands in good quality for great prices.

New to the Tucson gem and jewelry shows, Susan Fotos of Higashi Pearls & Fine Jewelry, who was shopping the Centurion show with plans to visit the main gem shows, described 2009 as “hand-to-hand combat” and a “battle for every dollar. We ended up okay, but we really worked hard to do well,” explained the Lemoyne, Pennsylvania, jeweler, whose game plan in Tucson was to “look for cool stuff.” She was pleased to find vendors trying harder to work with retailers.

“Designers are more flexible in their opening orders and are offering more price diversity,” Fotos said. Invited to the Centurion show for the first time, she valued the venue’s comfortable environment to meet with designers about whom she was curious, like Frederic Sage of Great Neck, New York.

Color Counts

A multiple AGTA Spectrum Award winner, Sage is a big proponent of color. “Surprisingly, people are more positive, interested and courageous to invest in something different,” he explained, noting that he has launched a lower-priced collection, set with citrine, smoky quartz and peridot, in the $700 to $800 wholesale range to entice more self-purchase.

Known for her bold gems set in 18-karat gold, Paula Crevoshay admits that everyone in the industry has had to step back and rethink their strategies. “When gold shot up over $1,000 a gram, I decided to go back through my old pieces,” said the Albuquerque, New Mexico, designer, exhibiting at AGTA. “The ones that did not speak to where I am today as a designer, I melted down to buy new gold. I soul-searched where I needed to focus my time and energy, and reaffirmed that it’s on my major pieces.”

Crevoshay did not want to incorporate sterling silver or silver-and-gold combinations in her line to cut costs. “It just isn’t me,” she explained. Yet she realized she had to do something to help her retailers. As part of her action plan, she developed a multimedia presentation for her jewelers called “Colors of Humanity” that integrates her vibrant jewels with model shots and images from the countries where her gems are sourced, then set it to tribal music with a voiceover repeating empowering words. She describes the piece as “Zenlike,” noting that she has stepped up personal appearances for jewelers in which she conducts events such as yoga sessions and Japanese tea ceremonies to creatively engage women to find their signature jewel.

While designers and manufacturers are more inclined to ease buy-in criteria in today’s economy, jewelers are more willing to open new dialogue. “In 2009, it was virtually impossible to get a dialogue started with jewelers. They were not interested in investing in any new lines,” recalled Daniel Bogue, director of Mattioli USA, an Italian gold chain and jewelry manufacturer.

To help diversify offerings, Mattioli brought costs down by a third for some of its most popular looks by interspersing hollow design elements among its solid gold. “That was a compromise for us to control costs without cheapening our look,” Bogue said while exhibiting at the Centurion Show, which he hailed as “a bright spot in 18 months of gloom and doom.” Moreover, the company is using big, colorful mother-of-pearl discs behind large, openwork gold designs for pendants, earrings and rings, in 14 interchangeable colors.

To meet what it considers the retail sweet spot — $500 to $3,000 — The Mazza Company is creating bold looks with quartz gems like rock crystal. “You can use big pieces in dramatic shapes for great price points,” explained William Mazza, a partner in the Baldwin, New York–based gem and jewelry manufacturer, who was exhibiting at Centurion.

New Directions

Other attention grabbers include designer Ann Garrett of Tulsa, Oklahoma, who showcased her latest collection of cuff bracelets and necklaces, earrings and rings in colorful stingray leather, fashioned from stingray fish skins, and horsehair with gold frog adornment and bright gems at the AGTA GemFair. The bracelets and neckwear are formed on flexible stainless steel with interchangeable jeweled additions of silver and 18-karat gold inlay, while the rings and earrings are crafted in silver and gold and set in the leather. Wholesaling for less than $300, Garrett’s new designs incorporate gems like coral, lapis, onyx and buffalo turquoise in pieces that do not compromise on quality.

Also realizing success with unconventional mixes is Rare Earth Mining Co. in Trumbull, Connecticut. Owner William Heher said that after 35 years of selling gems and jewelry to the wholesale market, he has finally landed on a product that sells out every time — pendants, bangles and rings crafted in exotic wood and set with fine drusy gems and 18-karat gold. “Gem quality is number one and in this business environment, it benefits me to use super-high-quality gems in a finished product, without the gold or even silver price, that jewelers can sell with no labor and time invested,” said Heher, who exhibited at the AGTA GemFair. He quoted wholesale prices from $60 to $150 on the pieces, with most retailers tripling their cost with no consumer resistance.

Top Sellers

When it comes to loose color, the most talked about gems in Tucson were rubellite and green tourmaline, spinel, spessartite and tsavorite garnet and amethyst, citrine, rock crystal and smoky quartz.

Nice sources and great prices are among the reasons tourmaline remains a strong seller. Exhibiting at the AGTA GemFair, Richard Barker of Barker & Co. in Scottsdale, Arizona, did especially well with a new find of rubellite from Nigeria that he describes as having great clarity and uniformity of color — from pink to fuchsia to deep red.

Also showing at the AGTA GemFair, Gina Taylor of Taylor Gem Corp in Lincoln, California, did well with baby pink tourmaline in 3-carat to 5-carat sizes, and rubellite in 2-carat to 7-carat sizes, both from Madagascar. “The softer colors max out at $200 a carat, $400 for more intense color.” Chrome tourmaline from Mozambique also captured sales for material that was real clean, in bright mint colors and large sizes.

Niveet Nagpal of the Los Angeles–based Omi Gems reported that sales for bread-and-butter goods are down 40 percent, while those for high-end gems like red spinel from Tanzania or alexandrite have doubled.

The market also has matured to where cut has become centric in the value equation. Jewelers are paying more attention to superior cutting for even the most common gems, such as blue topaz and citrine. “In this challenging economy, custom jewelers and designers are looking for beautiful gems that are easy to set,” explained Clay Zava of Zava Gems in Carrboro, North Carolina, adding that they will pay for better quality. His best-selling gems during the AGTA GemFair were tourmaline, garnet and zircon, with screaming sphene and peach topaz top showstoppers.

Color Rules Diamonds

Tucson may not be the venue for white diamonds, but color diamonds are right at home. While many gem vendors carry color diamonds, this is the first year the AGTA GemFair created a special pavilion for the category, albeit with just five companies exhibiting. The exhibitors’ reaction to business ranged from “a disaster” to “can’t complain.”

Nilesh Sheth, president of Nice Diamonds, New York City, said the reason the color diamond market is strong is because of big auction results. Pinks, browns and blues have shot up in price by 50 percent to 70 percent. Sheth sees an uptick in clients looking to invest in larger stones.  “The way the dollar is devaluating, consumers want to hedge their investment in tangible assets, like gold and color diamonds.”

Sheth said he had something for every taste and budget, from a 2.66-carat natural fancy blue-green diamond for $175,000 per carat to a treated version in the $4,000-to-$5,000-per-carat range.

Sampat Poddar, president of Byrex Gems Inc., in Toronto, Canada, reported a buyer’s market for yellow diamonds, which he said have soared in popularity during this down economy because of their price advantage. He said consumers can invest $60,000 to $100,000 in a 4-carat white diamond, versus $25,000 to $40,000 in a 4-carat fancy yellow.

In fact, David Goldstein of Goldstein Diamonds in Scottsdale, Arizona, concurred that yellow diamonds are selling well not just because they are a good value, but because they’re undervalued. But, despite yellow’s popularity, he noted that 80 percent of what he’s been selling lately has been black diamonds for black and white fashion looks. He also has noticed that jewelry set with raw diamond slices is trending…consider a 100-carat diamond necklace for just $38,000!

Pearl Power

In pearls, it’s all about interesting shapes, unusual combinations and rich natural colors, with Chinese freshwater pearls generating the most excitement. The New York–based DSL Pearl Inc. introduced products that combine interesting pearls, including new bead-nucleated freshwater pearls from China, which many in the industry call “fireball,” in big, baroque shapes and natural colors like lavender and peach. Pearl strands in 18-mm to 20-mm-plus sizes, which wholesale for $1,000 and 13 mm to 16 mm, priced at $800, sold out by the third day of the show.

“We also did well with mixed strands of peach freshwater pearls with bluish-white South Seas, which wholesale for $6,000 to $7,000 in 13-mm to 16-mm sizes, and $8,000 to $9,000 for larger sizes,” explained DSL partner Danny Livi, while exhibiting at the AGTA GemFair.

Causing the biggest buzz on the sales floor at the AGTA GemFair was a new pearl product launched by Sea Hunt Pearls of San Francisco, dubbed Soufflé Pearls. “The method of cultivation is a new step in the coin pearl/spherical bead nucleation process,” explained wholesaler Jack Lynch, who discovered the pearls on a buying trip to the Far East in the fall of 2009. “First a coin pearl is grown in the mussel and, after it is harvested, there is a pearl sack. Previously, the choices would be to insert a bead nucleus for a ‘fireball’ pearl or put it back in the water with no nucleus in hopes of a keshi. With this process, nucleators take pond muck, form a dried hard mass and insert that as a nucleus. As the pearl forms, water seeps into the area with the nucleus and dissolves the muck. When the pearl is drilled, the muck drains, leaving negative interior space.”

Lynch notes that the walls of these new hollow pearls are actually quite stable at about 3 mm thick, adding that only one or two pearls can grow per shell, with cultivating time of about two years. He said sizes range from 13 mm to 20 mm plus.

Whether it’s color stones, color diamonds or pearls, buyers in Tucson were eager for something fresh and of good value. Sonny Sethi, owner of the New York City–based pearl house Tara & Sons — which exhibited at Centurion, AGTA GemFair and GJX — is optimistic that the buyers are back. “They’ve depleted their inventory and need to restock,” he said, noting that retailers also are searching for new items to keep consumers engaged. While Sethi agrees that an air of caution remains, he believes that jewelers who give their customers products with clear value will prevail, with the last half of 2010 expected to be very strong.


Article from the Rapaport Magazine - March 2010. To subscribe click here.

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