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FBI Investigates Headley-Whitney Jewel Heist

Aug 4, 1994 2:12 PM  
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A multi-million dollar jewelry heist from the Headley-Whitney

museum in Lexington, Ky. is the target of an FBI investigation with

possible international implications.

Burglars broke into the museum early July 17, cut telephone lines and

the silent alarm system and took 50 to 60 pieces from the

museumUs jewelry collection. Jim Frazier, president of the

museum's board, said the thieves were true professionals. "They

knew what they were doing; they knew what they were looking for.

They'd been here before," he said.

George Headley had created the opulent jewelry early throughout

his career designing for leading Hollywood actresses Judy Garland,

Joan Crawford, Mae West and Fanny Brice. He'd had a boutique in the

Bel Air Hotel, Los Angeles, and frequently used dogs to model his

creations around the hotel's pool for wealthy patrons, according to

Lisa Blackadar, the museum's curator. "It's all

irreplaceable," said Frazier.

Because the items stolen were unusual one-of-a-kind works of art,

investigators think they are too recognizable to fence. There is

speculation that the items may be of interest to collectors in

countries other than the US.

"We're conducting an investigation and encouraging anyone with

information to come forward," said Bill Cheek, an FBI spokesman.

Israel Diamond Exports Rise

The Israel diamond industry continued to expand its exports in the

first six months of 1994 with net overseas sales of $1.7 billion,

compared to $1.5 billion for the same period last year, reports the

Israel Diamond Institute.

The United States is the leading market. Net sales during the

period were $722 million, compared to $596 million for the first six

months of 1993, a rise of 21%. Hong Kong was the second largest

market with six-month imports of polished gem stones from Israel

amounting to $311 million, compared to $262 million in 1993, an

increase of 19%.

Economic Bulletin


The Commerce Department recently reported that the nation's economy

grew at an annual pace of 3.7% in the second quarter. The report also

showed, however, that while businesses were expanding their

production, unsold goods were piling up on store shelves as consumer

spending slowed.

Industry analysts are concerned that well-stocked retailers might slow

or, perhaps, stop ordering new goods, thereby causing the pace of

economic growth to slow in the near future. The one positive upshot of

this would be inflation control: slower growth would help keep

inflation-- now hovering just below 3%--in check, in turn reducing the

need for the Federal Reserve to raise interest rates.

"The U.S. economy continues to turn in a fine performance," said Laura

D'Andrea Tyson, who heads President Clinton's Council of Economic

Advisers. "So far, everything we've seen in 1994 confirms our forecast

of a sustainable investment-led expansion with low inflation."

Consumer Confidence Continues Its Mild Fluctuations

Consumers' confidence in the economy slipped slightly in July--it had

edged up in June--but still remained near a four-year high, according

to a survey released July 26 by the Conference Board.

The Board, a business research group in New York, said its July survey

found that consumers' assessment of economic conditions continued to

improve, though their expectations for the next six months fell


The group said its monthly consumer confidence index, in which 1985

equals 100, was at 91.6 in July, down slightly from its four-year high

of 92.5 in June.

Surge In Installment Buying

"Americans are piling on the debt, with monthly totals for car loans,

credit cards and other installment loans growing at a ferocious pace

in recent months," stated a recent article in The New York Times.

Consumer installment debt, which includes credit cards and auto loans

but excludes home loans, grew more than $10 billion each month in

March, April and May, ending the period at $838 billion, according to

the Reserve. "The heady growth, at an 18.7% annualized rate, harks

back to the conspicuous consumption heyday of the mid-1980s," the

article said.

Significantly, the new credit boom appears to be fueled by

discretionary borrowing, not by distress borrowing from consumers who

have exhausted all their other options.

Richard Aspinwall, a senior vice president at Chase Manhattan,

attributed the credit surge to job growth, the benefits of mortgage

refinancing and improved confidence.

Economic Highlights: "Although consumers continue to express concern

with the job situation--for both the present and the immediate

future-- confidence is currently at a level which historically has

been associated with a reassuringly lively economy," says Fabian

Linden, executive director of The Conference Board's Consumer

Research Center.

In fact, in a separate report, the Labor Department said that the

number of initial applications for state unemployment benefits was

unchanged in the last week of June from the previous week. A

seasonally adjusted 353,000 people filed first-time claims in the week

that ended on June 25.

In the Board's June survey, less than 30% of all respondents

reported that jobs are hard to get. Still, the number of people

reporting that jobs are plentiful continues to be low.

Slightly more respondents than a month earlier reported that

business conditions are good. When looking toward the future, close

to 20% of respondents think that conditions will improve.

Regarding their own family's incomes, optimists are more than twice as

numerous as pessimists. More than 20% of the people questioned

answered that their financial situation will improve over the next

six months.

And the numbers support these claims. The income of Americans rose

for the fourth consecutive month in May and spending nearly kept pace,

the Government reported on June 30. This, along with the latest

data on claims for jobless benefits, indicates that the economy

expanded at a comfortable pace this spring, analysts said.

"The basic message is that the economy has downshifted to a

slower growth pace, Robert Dederick, an economist with the

Northern Trust Company in Chicago, told The New York Times. "I

think the consumer will come back. But the great spurt is behind us,"

he said.

Personal Income

Meanwhile, the Commerce Department reported that Americans'

personal income rose six-tenths of 1 percent in May--as it did in

April--spurred by job growth, a longer average workweek and higher

hourly earnings.

Consumer spending increased four-tenths of 1 percent,

concurrently--slightly higher than anticipated, after dipping a

revised four-tenths of 1 percent in April. Spending, which accounts

for two-thirds of the nation's economic activity, has risen in 12 of

the last 14 months.

What it all means

"Once again, the economic data indicates the U.S. economy is not

overheating but instead growing at a pace consistent with stable

inflation," Donald Straszheim and Bruce Steinburg, economists with

Merrill Lynch & Company, said in a statement.

Many analysts expect the economy's performance during the second

quarter, which ended June 30, to be at least duplicated and

probably exceeded the first three months of the year.

The economy grew at an annual rate of 3.4% in the first three

months of this year; and while this was a drastic slowing from the

growth rate of 7% at the end of last year, analysts said the pace of

the expansion was solid, if unspectacular. The economy grew at a rate

of 3% for all of 1993.

Buying Plans Weaker

Although confidence has perked up in recent months, consumers'

buying plans for major items continue to soften. Plans to buy an

automobile are down for the second consecutive month. Intentions to

purchase a home have been declining in recent months. Interest in

buying major appliances is weaker too.

Spotlight on the Jewelry Industry

Lazare Kaplan's Sales Up Lazare Kaplan International Inc. () has

announced that net sales for the year ended May 31, 1994 totaled $204

million, an increase of 29% from last year. The company reported

net sales of $43 million for the fourth quarter ended May 31, an

increase of 12% over the same period last year.

Net polished diamond sales from last year for the year ended May 31

increased 18% to $51 million; sales increased 59% to $14 million

over the fourth quarter of last year.

"The significant improvement in polished sales at Lazare Kaplan

reflects improving economic conditions and growing consumer

confidence in the United States and Pacific Rim markets," said Leon

Tempelsman, president of the company.

The company posted net income of $3 million for the year ending May

31, 1994, compared to a net loss of $903,000 the previous year.

The company reported net income of $746,000 for the fourth

quarter, compared to a net loss of $469,000 for the same period at

year . These increases are primarily attributable to higher

sales volume and improved higher gross margins.

Town & Country Posts Loss Due To Lower Margin Merchandise

Town & Country Corp. () reported sales of $70 million for its

first fiscal quarter ended May 29, 1994, up from $64 million from the

same period a year ago. The company reported a first quarter net

loss of $2.4 million, or $0.13 per share, compared with a net loss of

$498,954, or $0.04 per share, in last year's May quarter.

Frank Carrera, corporate vice president, said that the company's net

loss was due to two situations. The company's Balfour division

invested heavily in product development, new tooling, staffing and

advertising in connection with its more aggressive direct marketing of

sports-related jewelry, and a similar situation arose with


The increased costs at Balfour were expected; the lower margins

were not.

Lower margin merchandise in the company's fine jewelry division

accounted for most of the revenue surge, commented C. William

Carey, chairman and CEO. He also noted that jewelry retailers

continue to apply margin pressure, even against lower price-point

ranges in diamond, colored stones and gold product lines.

Mr. Carey added: "The demand during the first quarter for lower

price-point merchandise reflects the seasonal nature of our

industry, as retailers typically wait until later in the year to

build inventories of higher-priced jewelry in anticipation of

Christmas. Even so, we are not satisfied with out first quarter

performance, and we are focusing on the margin issues and taking

steps to improve profitability."

Zale Announces Management Changes

Zale Corp. announced the resignation of three senior executives,

effective immediately, in the Zales-Gordon's division: Jerry Daws,

president; Terry Garcia, senior vice president of

merchandising; and Glenn Stewart, marketing director. On July 20,

Zale named Mary Forte president of the Gordon jewelry division. Forte

comes to Gordon's from QVC/ Home Shopping Network, where she was

senior vice president. Larry Pollock, Zale's president and COO, said

the moves were part of the company's strategy to set up Zale and

Gordon as separate and distinct divisions.

Reeds Jewelers Announces 10% Stock Dividend

Reeds Jewelers Inc.Us board of directors has declared a 10%

stock dividend on the company's outstanding common stock. The stock

dividend will be payable on August 15, 1994 to shareholders of

record as of August 1, 1994. The dividend will be paid at a rate of

one share for each ten shares owned, with cash paid in lieu of

fractional shares.

Home Shopping Network's Sales Up

The Home Shopping Network Inc.Us net sales increased to $274 million

in the second quarter this year, or 9.5%, compared with net sales

of $250.3 million for the same period of last year.

Net earnings for the second quarter were up to $1.9 million--or $0.02

per share--from $1.6 million during the same period last year, despite

a $2.9 million pre-tax loss on the proposed sale of a wholly owned


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Tags: Consumers, Economy, Government, Hong Kong, Israel, Israel Diamond Institute, Jewelry, Lazare kaplan, Production, United States, Zale
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