From the beginning, families have fueled the growth of the
diamond industry. The modern diamond business is synonymous with De Beers, the
South African mining company that began its 80-year history with the
Oppenheimer family when Ernest Oppenheimer gained control in 1929. De Beers had
been a major shareholder in Anglo American, the company founded by Oppenheimer.
His son, Harry, steered the company through its boom years, passing the torch
to his son, Nicholas, known as “Nicky,” who continued the company’s growth
through the end of the twentieth century and into the twenty-first. The
Oppenheimers exited the business in 2012 when the family sold its remaining
stake in De Beers to Anglo American. The two companies were tightly entwined
for a century until this final dissolution.
On the other side of the diamond industry, the Tolkowsky
family is famed for its technical advances in diamond cutting starting in 1919
with Marcel Tolkowsky, who established the parameters for the modern 58-facet
brilliant cut. Gabi Tolkowsky, his great grandson, and his son, Jean Paul,
continue the tradition, creating historic ideal cut diamonds, including the
273.85-carat D flawless Centenary diamond. Jean Paul also created the Princess
Ideal Cut diamond, extending the family tradition.
Around the world, families continue to represent the essence
of today’s diamond cutting and marketing industry. Each of the three companies
profiled here occupies a distinctive and significant aspect of the business.
Their histories reflect the turbulent times in which they lived and worked. Like
the diamonds they cut, they had to both endure and be brilliant.
Equally important, each family seems to have developed ways
to overcome the tensions and sometimes conflicting ideas of how to move forward
that can defeat many family businesses. These families dealt with the stresses
of ever-changing demands of the modern economy, technology and society. At one
point, all of them were faced with the dramatic change in the sightholder
structure, leaving them to seek rough diamonds on the open market. All of them
successfully managed the transition.
One hundred and ten years ago diamond cutter Sam Kwiat
established his company in New York City.
Sheldon Kwiat, one of Sam Kwiat’s grandsons, says, “Part of our success is that
each generation has changed the business to meet the current marketplace. We
have changed, but stay true to what is best.” Flexibility combined with a
dedication to a superior product sums up the history of Kwiat. Sheldon, director
of Kwiat, and his brother Lowell, chairman of Kwiat, preside over the company
that now comprises four generations. The team is rounded out by Lowell’s three
sons: Russell, chief operating officer, Greg, chief executive officer, and
Cory, chief digital officer and the newest and youngest family member to join
the firm.
The five men not only share working space in Kwiat’s Fifth
Avenue headquarters in the heart of the diamond district, but also a vision of
what the most beautiful diamond should look like, something that Sheldon says
began with their grandfather, Sam, and his son, David. “Our grandfather and
father liked a certain cut.” He adds, “The company uses ‘the science of
diamonds to make the most brilliant diamond; art to make the most beautiful jewelry.’”
The precise angles of the cut exceed the Gemological Institute of America’s
(GIA) standards for “excellent” cut, according to the Kwiats. Sheldon and
Lowell note, “We have a very precise way of cutting; we call it the Tiara cut,
which is our logo.”
After operating under the radar as a supplier of
exceptionally well-cut diamonds to the wholesale trade, in 2000, Greg says,
“Sheldon and Lowell saw that the industry was moving toward differentiated
jewelry brands. We made an important decision to invest in building the
business around the brand. We felt we had a superior product, but how do we let
the jewelers and consumers know about it? You have to live and breathe the
promise of the brand.”
This decision coincided with the upheaval created by De Beers
around 1999 as it was trying to cope with a declining market coupled with a
loss of its near-monopolistic control of the industry. After successfully tying
diamond manufacturers to its sightholder system, forcing wholesale clients to
buy boxes of diamonds that often didn’t meet companies’ needs, De Beers Diamond
Trading Company (DTC) changed course. De Beers created “Supplier of Choice,” leading
to more than one-third its global diamond-buying clients being cut. The list of
DTC-approved buyers is now approximately 80.
Companies were shocked into finding other sources of diamonds.
For those who survived, including Kwiat, DTC’s decision proved to be a
blessing. After giving up its sight in 2004, the company looked at branding as
a way to differentiate itself from others in the market.
By 2007, the brand was established in 100 select retail
stores, housed in its own boutiques. The next step was to open a store in 2008
under its own name, on prestigious— and
very competitive — Madison Avenue in
New York City, where a veritable “who’s who” of well-known jewelry brand names
sit virtually side by side.
In 2009, Kwiat took another leap into retailing, buying the
well-established brand and store, Fred Leighton. The brand, known mainly for
antique and antique-style jewelry, is a good fit with Kwiat’s own elegant
diamonds and jewelry, according to Russell. “They support one another, driving
greater consumer awareness of the brand.”
In 2016, Kwiat entered into a partnership with William
Goldberg to market its Ashoka cut diamonds. Russell, along with Benjamin
Goldberg, William’s grandson, established Kwiat as the exclusive distributor of
Ashoka diamonds in the U.S. According to Russell it was “an opportunity to
bring our customers something unique.” It also continued a tradition between
the two families: David Kwiat did business with William Goldberg when Goldberg
was half of the firm Goldberg & Weiss.
The elder generations of both companies instilled in their
children a respect for the business and a love of diamonds. Lowell says, “When
I was seven or eight, I used to look at parcels of diamonds.” Lowell and
Sheldon both point out, “Dad would never talk about business problems at home,
only good things that were happening in the business. We got a very positive view.”
And so the company moves forward with the fourth generation
firmly on board: from founder Sam Kwiat to his son David, then David’s sons
Lowell and Sheldon, and today, Lowell’s three sons.
From his birthplace on Tiffany Street in the Bronx to the
naming of 48th Street as William Goldberg Way, diamantaire William Goldberg set
the tone, style and integrity of the company that still bears his name. His
death in 2003 left the industry without one of its most colorful and successful
characters, but his ideals and ethics live on through his family: son Saul,
daughter Eve, son-in-law Barry Berg and grandson Benjamin, Sam's son.
It was hardly a secret in the industry that William was not
much of a cutter — even his obituary mentioned that he was “all thumbs” — but
he was born with the innate understanding of what goes into an exquisitely cut
diamond. Teaming up with expert cutter Irving Weiss as Goldberg & Weiss, he
showed a unique flair for deal making. In 1978, with that relationship at an
end, son Saul Goldberg joined his father in his new company.
As a buyer for the company, Saul says, “I was buying rough
and traveling all my life.” Much of that centered on the company’s status as a
De Beers sightholder. Saul and his father shared the obligatory ten trips a
year to the sights in London. When De Beers slashed its sightholder list, the
firm’s direction changed. Saul notes, “It gave us a lot of freedom.” The
company could then concentrate on buying only the finest quality and sizes it
needed. At the same time, it turned more to setting jewelry with its own,
finely cut gems.
In 1993, the firm introduced its Ashoka cut, a 62-facet gem
that combines the elegance of an emerald cut with the fire of a brilliant.
While the dramatically different look was eagerly bought by a select clientele
of stores in London and Hong Kong, there was no retail distribution in the U.S.
until two of the younger members of Goldberg and Kwiat joined forces. Benjamin
Goldberg and Russell Kwiat, who had known each other from their college days,
and had both grown up in their respective family businesses, created an
alliance in which Goldberg supplied the stones and Kwiat designed the jewelry,
to be sold at a limited number of retailers in the U.S. where Kwiat was an
established brand.
In addition to
marketing Ashoka diamonds, Benjamin works with Barry Berg, husband of William’s
daughter Deborah, overseeing rough production and buying polished diamonds. As
the oldest of William’s grandchildren, and the only one in the business,
Benjamin seems to have absorbed everything his grandfather could offer in his
love of the business. He is not too young to recall the day the company lost
its DTC sight. “I was in college. I remember it very well. It was a hard day.”
After a stint in real estate and the stock market, Benjamin was ready to join
the family business. “Deep down inside, I knew this is the business I wanted to
come into.” Sitting with the firm’s gemologist, Renee Callahan, he learned how
to grade diamonds, gaining an in-depth understanding of clarity and color
grading. When she retired, he says, “It was an opportunity for me. I took my
Graduate Gemologist (GG) degree, from the GIA and took over that end of our
company.”
Berg came into the business when he was 25, working
alongside his wife Deborah. From his early days learning the business, “from
the bottom, the old-fashioned way,” he did everything. He traveled to Hong Kong
selling loose goods. At the end of the day he says, “My father-in-law would call
me, asking, ‘Did you have a good day?’” Berg has been with the family firm for 32 years.
Eve came into the business for a six-week stint when her
sister, Deborah, was on maternity leave. That was 30 years ago and she has been
there ever since. Although she did some GIA home-study courses, she says, “My
father was the teacher. I learned on the job. My father pushed us. He wanted to
be known as a great teacher.” Today, she is involved in sales and the creative
end of the company, focusing on marketing and advertising.
The respect for quality and the growth of the firm reflect
William Goldberg’s strong beliefs in ethical dealing and beautifully cut
diamonds. The changes in marketing show how the company has met the challenges of the contemporary sales environment.
Royal Asscher: History Repeats Itself
Six generations on, Royal Asscher is one of the oldest
diamond dynasties still in existence, even after enduring the hardships of war.
Founded in Amsterdam in 1854 by Joseph Isaac Asscher, the family made an early
mark on the nascent diamond world when his grandson, Joseph, designed the
Asscher cut in 1902, which the company patented.
The original Asscher cut was a rectangular emerald cut with
drastic corners and built-up crown. It was an expensive cut that used a large
piece of an octahedron crystal. As a result, buyers had to be willing to buy a
diamond that looked smaller than stones of similar weight because much of the
cut was in the lower half. Still, in spite of the cost, the cut appealed to
those who valued its charm and its architectural brilliance.
By 1907, the Asscher Diamond Factory was located in an
historic building in Amsterdam. It was there that King Edward VII commissioned
the brothers to cut the 3,106-carat Cullinan rough.
The glorious days of diamond cutting came to an end when the
Nazis invaded The Netherlands on May 10, 1940. The Asscher family was deported
and interned in concentration camps, along with nearly all of their polishers.
All the company's diamonds were seized. Only ten Asscher family members,
including Louis and Joseph, survived internment. Of the 500 diamond polishers
they employed, 15 survived, of which ten were family members. The Nazis had
also seized their diamond stock, leaving them with virtually no resources. The
entire Amsterdam diamond industry was all but destroyed.
In 1946, Louis and Joseph set about rebuilding the Asscher
Diamond Company. Lita Asscher, sixth generation member of the family and
granddaughter of Louis, says, “Harry Oppenheimer was a good friend of my
grandfather and his brother. He came to Amsterdam to help them get their first
sight after the war.” In order to pay for the goods, she adds, “We sold part of
our building to pay for the sight.” By this time, the firm’s patent for the
original Asscher cut had run out. The term “Asscher” was being applied to any
stone that resembled the real thing; the name alone gave a stone cachet.
In 1980, Dutch Queen Juliana granted the firm a royal title
and it became the Royal Asscher Diamond Company. It would take another 20 years
for the firm to design a new stone that would take that name — the Royal
Asscher cut. Edward and Joop, the sons of Louis and great grandsons of Joseph,
who designed the original cut in 1902, updated the original and created a stone
with more light by adding facets, for a total of 74 in all.
Today, Royal Asscher controls the polishing and distribution
of its namesake design. Edward overseas finance, while his daughter Lita
oversees the American side of the business and his son Mike covers the market
in Asia. Decision-making, she says, isby consensus. The company has been established in Japan for over 65
years, selling to over 150 retailers there, a reflection, she says, of the
Japanese appreciation of high quality. “It’s a good fit.” The firm also sells
to ten retailers in The Netherlands.
In 2015, the company introduced the Royal Asscher Brilliant
Cut, also with 74 facets, through Helzberg Diamond stores. In 2017, the company
opened another channel of distribution in the U.S. at the JCK Las Vegas jewelry
show— a loose diamond program, making
stones from .5 carats to 5 carats available to retailers. According to Lita,
“Most retailers have plenty of mountings and are in love with our diamonds.” At
the same time, she adds, “Millennials like to customize everything.”
The new approach is in line with her father’s motto, “If you
don’t evolve your company on an ongoing basis, you might not be in business
anymore in the future.
Article from the Rapaport Magazine - July 2017. To subscribe click here.