Rapaport Magazine
Colored Gemstone

Selling the Blues

Blue sapphire consistently holds the top spot as the most popular colored gemstone.

By Mark Lepage

Nam Cho
What explains America’s enduring love affair with the blue sapphire? Evan Caplan, president of Evan Caplan fine colored gemstone dealers in Los Angeles, sums up the appeal simply: “It’s one of the most beautiful stones in the world.” He rates the blue sapphire as “definitely number two in sales, right behind diamonds.” Most of Caplan’s sales are in the U.S., and blue sapphires represent 30 percent to 40 percent of his business by dollar value.
   For Michael Couch, president of Michael Couch & Associates in Windsor Heights, Iowa, the percentage is even higher. “Blue sapphires represented 60 percent of my sales at the JCK show.” Glenn Preus, owner of Glenn Preus, Ltd. in Honolulu, Hawaii, and a specialist in precision-cut natural color Burmese, Ceylon and African gemstones, concurs. “Blue sapphire is the number-one selling gemstone in the past five years.”
   Eddie Livian, president of Atlantic Gem Corp. in New York City, says that “Blue sapphire is one of our specialties and yes, Americans do love them. Ninety-nine percent of my business is in the U.S. and 70 percent of that is blue sapphires. This has probably been my strongest year.” Those would be heated stones, 10 carats and up, at $4,000 to $6,000 per carat. Ninety-nine percent of all sapphires are heated, he says, to enhance their color.
   Kashmir blue sapphires are the most coveted, for the deep, velvety texture of their color. They are also rare, given the Himalayan source region has largely been mined out. New world auction records for sapphires, both set at Sotheby’s Geneva in November 2013, are $8.3 million for a pair of diamond and unheated Kashmir sapphire earrings and, in second place, $7.2 million for a single unmounted 114.74-carat unheated Burmese sapphire. Burma, Sri Lanka and Madagascar now supply most of the U.S. blue sapphire market.
   Blue sapphires benefit from cost appeal when compared with rubies. Executive Order 13619, signed by President Obama in August 2013, renewed the ban on importing Burmese rubies, making them rare and therefore very expensive. “A fine-quality 10-carat ruby cannot be found for under a couple hundred thousand dollars,” Livian says. “A 10-carat sapphire will cost $30,000 to $50,000 per stone.”

Allure of Blue
   Certainly, color quality is crucial to the allure — and cost — of the blue sapphire. “In blue sapphire, purity — as in no secondary colors — of the primary blue hue is critical,” says Preus. “While a vivid, intense, fully saturated blue of medium dark tone would, by many, be considered ideal, if that same saturated blue has a slight secondary color of green, the value would be greatly lessened. Saturation in blue sapphires is often masked by gray overtones, which drives down the price.” The decrease is hard to precisely quantify, but Preus estimates it as between 30 percent and 40 percent.
   That blue remains the queen of the sapphires is evidenced by the prices the stone commands. “Generally speaking, a red-orange sapphire will run 75 percent of the price of a blue stone,” says Couch. “Purple will run 60 percent; yellows, 40 percent and darker orange, 35 percent.”
   Preus explains blue is popular because “it’s nature’s way of signaling ‘health.’ Blue skies, blue ocean…it’s all around us. I think humans have a visceral reaction to blue, both men and women. We are hardwired to cherish this healthy color.”

   Attempting to explain the enduring popularity of the stone, Caplan mentions the rich and famous. There’s Princess Diana’s blue sapphire engagement ring. Consider also Liz Taylor. She not only owned a Bulgari sautoir necklace with a 52.72-carat blue sapphire as its centerpiece — it sold for almost $6 million at a Christie’s auction in 2011 — she even launched a fragrance line called “Diamonds and Sapphires” in 1993.
   There is also its fashion appeal. “Blue sapphires, with their endless range of blue tones, from a jazzy pastel to endlessly rich intense royal blues, complement a woman’s fashion choices and do not compete with those choices,” Preus explains.
   Shaun Ajodan, president of Shaun Gems International of New York City, states that the fashion appeal extends to men. “If you think of the ties in your wardrobe, which one are you most likely to wear? The blue tie.” Asked what specific buyers are looking for in a blue sapphire, Ajodan says, “Europeans want medium cornflower blue. In the Far East, they want royal blue. In the U.S., they want good value.”

Prices Trending Up
   But that value is becoming more expensive. According to Couch, blue stones smaller than 1 carat have risen 15 percent in price in the past year, and 35 percent in the past three years. Stones 1 carat to 3 carats are up 40 percent in the past year for blues, and 25 percent for other colors. Chinese buyers represent 50 percent of this increased price pressure. “They come in with hundred dollar bills and don’t even want a receipt,” Couch says.
   Ajodan agrees. “Chinese clientele are paying top dollar. They are looking for Kashmir blue, cornflower blue.” Despite the price hikes, dealers remain confident that the love affair with sapphires will continue. “Definitely,” says Caplan. “It’s a beautiful stone, and realistically, everything has gone up. So there’s no doubt in my mind that sapphires will remain the number-two selling stone.”

Article from the Rapaport Magazine - August 2014. To subscribe click here.

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Tags: Mark LePage