Showing posts with label diamond jewelry. Show all posts
Showing posts with label diamond jewelry. Show all posts

Sunday, October 8, 2017

New terms were coined to differentiate the arts: jewellers who worked in cheaper materials were called bijoutiers, while jewellers who worked with expensive materials were called joailliers

The Renaissance and exploration both had significant impacts on the development of jewellery in Europe. By the 17th century, increasing exploration and trade led to increased availability of a wide variety of gemstones as well as exposure to the art of other cultures. Whereas prior to this the working of gold and precious metal had been at the forefront of jewellery, this period saw increasing dominance of gemstones and their settings. An example of this is the Cheapside Hoard, the stock of a jeweller hidden in London during the Commonwealth period and not found again until 1912. It contained Colombian emeraldtopazamazonite from Brazil, spineliolite, and chrysoberyl from Sri Lanka, ruby from India, Afghan lapis lazuliPersian turquoise, Red Sea peridot, as well as Bohemian and Hungarian opalgarnet, and amethyst. Large stones were frequently set in box-bezels on enamelled rings.[32] Notable among merchants of the period was Jean-Baptiste Tavernier, who brought the precursor stone of the Hope Diamond to France in the 1660s.
When Napoleon Bonaparte was crowned as Emperor of the French in 1804, he revived the style and grandeur of jewellery and fashion in France. Under Napoleon’s rule, jewellers introduced parures, suites of matching jewellery, such as a diamond tiara, diamond earrings, diamond rings, a diamond brooch, and a diamond necklace. Both of Napoleon’s wives had beautiful sets such as these and wore them regularly. Another fashion trend resurrected by Napoleon was the cameo. Soon after his cameo decorated crown was seen, cameos were highly sought. The period also saw the early stages of costume jewellery, with fish scale covered glass beads in place of pearls or conch shell cameos instead of stone cameos. New terms were coined to differentiate the arts: jewellers who worked in cheaper materials were called bijoutiers, while jewellers who worked with expensive materials were called joailliers, a practice which continues to this day.

Romanticism[edit]

Mourning jewellery in the form of a jet brooch, 19th century.
Starting in the late 18th century, Romanticism had a profound impact on the development of western jewellery. Perhaps the most significant influences were the public’s fascination with the treasures being discovered through the birth of modern archaeology and a fascination with Medieval and Renaissance art. Changing social conditions and the onset of the Industrial Revolution also led to growth of a middle class that wanted and could afford jewellery. As a result, the use of industrial processes, cheaper alloys, and stone substitutes led to the development of paste or costume jewellery. Distinguished goldsmiths continued to flourish, however, as wealthier patrons sought to ensure that what they wore still stood apart from the jewellery of the masses, not only through use of precious metals and stones but also though superior artistic and technical work. One such artist was the French goldsmith François-Désiré Froment-Meurice. A category unique to this period and quite appropriate to the philosophy of romanticism was mourning jewellery. It originated in England, where Queen Victoria was often seen wearing jet jewellery after the death of Prince Albert, and it allowed the wearer to continue wearing jewellery while expressing a state of mourning at the death of a loved one.[33]
In the United States, this period saw the founding in 1837 of Tiffany & Co. by Charles Lewis Tiffany. Tiffany's put the United States on the world map in terms of jewellery and gained fame creating dazzling commissions for people such as the wife of Abraham Lincoln. Later, it would gain popular notoriety as the setting of the film Breakfast at Tiffany's. In France, Pierre Cartier founded Cartier SA in 1847, while 1884 saw the founding of Bulgari in Italy. The modern production studio had been born and was a step away from the former dominance of individual craftsmen and patronage.
This period also saw the first major collaboration between East and West. Collaboration in Pforzheim between German and Japanese artists led to Shakudō plaques set into Filigree frames being created by the Stoeffler firm in 1885).[34] Perhaps the grand finalé – and an appropriate transition to the following period – were the masterful creations of the Russian artist Peter Carl Fabergé, working for the Imperial Russian court, whose Fabergé eggs and jewellery pieces are still considered as the epitome of the goldsmith’s art.

18th Century / Romanticism/ Renaissance[edit]

Many whimsical fashions were introduced in the extravagant eighteenth century. Cameos that were used in connection with jewellery were the attractive trinkets along with many of the small objects such as brooches, ear-rings and scarf-pins. Some of the necklets were made of several pieces joined with the gold chains were in and bracelets were also made sometimes to match the necklet and the brooch. At the end of the Century the jewellery with cut steel intermixed with large crystals was introduced by an Englishman, Matthew Boulton of Birmingham.[35]

Art Nouveau[edit]

In the 1890s, jewellers began to explore the potential of the growing Art Nouveau style and the closely related German Jugendstil, British (and to some extent American) Arts and Crafts Movement, Catalan Modernisme, Austro-Hungarian Sezession, Italian "Liberty", etc.
Art Nouveau jewellery encompassed many distinct features including a focus on the female form and an emphasis on colour, most commonly rendered through the use of enamelling techniques including basse-taille, champleve, cloisonné, and plique-à-jour. Motifs included orchids, irises, pansies, vines, swans, peacocks, snakes, dragonflies, mythological creatures, and the female silhouette.
René Lalique, working for the Paris shop of Samuel Bing, was recognised by contemporaries as a leading figure in this trend. The Darmstadt Artists' Colony and Wiener Werkstätte provided perhaps the most significant input to the trend, while in Denmark Georg Jensen, though best known for his Silverware, also contributed significant pieces. In England, Liberty & Co. and the British arts & crafts movement of Charles Robert Ashbeecontributed slightly more linear but still characteristic designs. The new style moved the focus of the jeweller's art from the setting of stones to the artistic design of the piece itself. Lalique's dragonfly design is one of the best examples of this. Enamels played a large role in technique, while sinuous organic lines are the most recognisable design feature.
The end of World War I once again changed public attitudes, and a more sober style developed.[36]

Art Deco[edit]

Growing political tensions, the after-effects of the war, and a reaction against the perceived decadence of the turn of the 20th century led to simpler forms, combined with more effective manufacturing for mass production of high-quality jewellery. Covering the period of the 1920s and 1930s, the style has become popularly known as Art DecoWalter Gropius and the German Bauhaus movement, with their philosophy of "no barriers between artists and craftsmen" led to some interesting and stylistically simplified forms. Modern materials were also introduced: plastics and aluminium were first used in jewellery, and of note are the chromed pendants of Russian-born Bauhaus master Naum Slutzky. Technical mastery became as valued as the material itself. In the West, this period saw the reinvention of granulation by the German Elizabeth Treskow, although development of the re-invention has continued into the 1990s. It is based on the basic shapes.

Asia[edit]

Royal earrings, India, 1st Century BC.
Indian king Bhupinder Singh of Patiala wearing Patiala Necklace which contained 2,930 diamonds, including as its centrepiece, the world's seventh largest diamond, the "De Beers", that had a 428 carat pre-cut weigh, and weighed 234.65 carats in its final setting. The piece also contained seven other diamonds ranging from 18 to 73 carats, and a number of Burmese rubies
In Asia, the Indian subcontinent has the longest continuous legacy of jewellery making anywhere[citation needed], with a history of over 5,000 years.[37] One of the first to start jewellery making were the peoples of the Indus Valley Civilization, in what is now predominately modern-day Pakistan and part of northern and western India. Early jewellery making in China started around the same period, but it became widespread with the spread of Buddhism around 2,000 years ago.

China[edit]

The Chinese used silver in their jewellery more than gold. Blue kingfisher feathers were tied onto early Chinese jewellery and later, blue gems and glass were incorporated into designs. However, jade was preferred over any other stone. The Chinese revered jade because of the human-like qualities they assigned to it, such as its hardness, durability, and beauty.[5] The first jade pieces were very simple, but as time progressed, more complex designs evolved. Jade rings from between the 4th and 7th centuries BC show evidence of having been worked with a compound milling machine, hundreds of years before the first mention of such equipment in the west.[38]
Jade coiled serpent, Han Dynasty(202 BC–220 AD)
`Xin' Shape Jewellery from Ming Dynasty Tombs, (1368–1644)
In China, the most uncommon piece of jewellery is the earring, which was worn neither by men nor women.[citation needed] Amulets were common, often with a Chinese symbol or dragon. Dragons, Chinese symbols, and phoenixes were frequently depicted on jewellery designs.
The Chinese often placed their jewellery in their graves. Most Chinese graves found by archaeologists contain decorative jewellery.[39]

Indian subcontinent[edit]

Two-Tiered Enamel Earrings, late 18th-early 19th century. Qajar Dynasty. Brooklyn Museum.

The Indian subcontinent (encompassing IndiaPakistan and other countries of South Asia) has a long jewellery history, which went through various changes through cultural influence and politics for more than 5,000–8,000 years. Because India had an abundant supply of precious metals and gems, it prospered financially through export and exchange with other countries. While European traditions were heavily influenced by waxing and waning empires, India enjoyed a continuous development of art forms for some 5,000 years.[37] One of the first to start jewellery making were the peoples of the Indus Valley Civilization (encompassing present-day Pakistan and north and northwest India). By 1500 BC, the peoples of the Indus Valley were creating gold earrings and necklaces, bead necklaces, and metallic bangles. Before 2100 BC, prior to the period when metals were widely used, the largest jewellery trade in the Indus Valley region was the bead trade. Beads in the Indus Valley were made using simple techniques. First, a bead maker would need a rough stone, which would be bought from an eastern stone trader. The stone would then be placed into a hot oven where it would be heated until it turned deep red, a colour highly prized by people of the Indus Valley. The red stone would then be chipped to the right size and a hole bored through it with primitive drills. The beads were then polished. Some beads were also painted with designs. This art form was often passed down through the family. Children of bead makers often learned how to work beads from a young age. Persian style also played a big role in India’s jewellery. Each stone had its own characteristics related to Hinduism.
Jewellery in the Indus Valley was worn predominantly by females, who wore numerous clay or shell bracelets on their wrists. They were often shaped like doughnuts and painted black. Over time, clay bangles were discarded for more durable ones. In present-day India, bangles are made out of metal or glass.[40] Other pieces that women frequently wore were thin bands of gold that would be worn on the forehead, earrings, primitive brooches, chokers, and gold rings. Although women wore jewellery the most, some men in the Indus Valley wore beads. Small beads were often crafted to be placed in men and women’s hair. The beads were about one millimetre long.
A female skeleton (presently on display at the National Museum, New Delhi, India) wears a carlinean bangle (bracelet) on her left hand. Kada is a special kind of bracelet and is widely popular in Indian culture. They symbolizes animals like peacock, elephant,[41] etc.
According to Hindu belief, gold and silver are considered as sacred metals. Gold is symbolic of the warm sun, while silver suggests the cool moon. Both are the quintessential metals of Indian jewellery. Pure gold does not oxidise or corrode with time, which is why Hindu tradition associates gold with immortality. Gold imagery occurs frequently in ancient Indian literature. In the Vedic Hindu belief of cosmological creation, the source of physical and spiritual human life originated in and evolved from a golden womb (hiranyagarbha) or egg (hiranyanda), a metaphor of the sun, whose light rises from the primordial waters.[42]
Antique Pearl & Gold Nose Ring, India, 19th century
Jewellery had great status with India’s royalty; it was so powerful that they established laws, limiting wearing of jewellery to royalty. Only royalty and a few others to whom they granted permission could wear gold ornaments on their feet. This would normally be considered breaking the appreciation of the sacred metals. Even though the majority of the Indian population wore jewellery, Maharajas and people related to royalty had a deeper connection with jewellery. The Maharaja's role was so important that the Hindu philosophers identified him as central to the smooth working of the world. He was considered as a divine being, a deity in human form, whose duty was to uphold and protect dharma, the moral order of the universe.[43]
A Navaratna ring.
Navaratna (nine gems)is a powerful jewel frequently worn by a Maharaja (Emperor). It is an amulet, which comprises diamond, pearl, ruby, sapphire, emerald, topaz, cat’s eye, coral, and hyacinth (red zircon). Each of these stones is associated with a celestial deity, represented the totality of the Hindu universe when all nine gems are together. The diamond is the most powerful gem among the nine stones. There were various cuts for the gemstone. Indian Kings bought gemstones privately from the sellers. Maharaja and other royal family members value gem as Hindu God. They exchanged gems with people to whom they were very close, especially the royal family members and other intimate allies. "Only the emperor himself, his intimate relations, and select members of his entourage were permitted to wear royal turban ornament. As the empire matured, differing styles of ornament acquired the generic name of sarpech, from sar or sir, meaning head, and pech, meaning fastener."
India was the first country to mine diamonds, with some mines dating back to 296 BC. India traded the diamonds, realising their valuable qualities. Historically, diamonds have been given to retain or regain a lover’s or ruler’s lost favour, as symbols of tribute, or as an expression of fidelity in exchange for concessions and protection. Mughal emperors and Kings used the diamonds as a means of assuring their immortality by having their names and wordly titles inscribed upon them. Moreover, it has played and continues to play a pivotal role in Indian social, political, economic, and religious event, as it often has done elsewhere. In Indian history, diamonds have been used to acquire military equipment, finance wars, foment revolutions, and tempt defections. They have contributed to the abdication or the decapitation of potentates. They have been used to murder a representative of the dominating power by lacing his food with crushed diamond. Indian diamonds have been used as security to finance large loans needed to buttress politically or economically tottering regimes. Victorious military heroes have been honoured by rewards of diamonds and also have been used as ransom payment for release from imprisonment or abduction.[44] Today, many of the jewellery designs and traditions are used, and jewellery is commonplace in Indian ceremonies and weddings.[39]

Thursday, August 3, 2017

Jewelry industry continues to decline in size, as more and more retailers, wholesalers and diamond producers are closing

The latest statistics from the Jewelers Board of Trade (JBT) show that the jewelry industry continues to decline in size, as more and more retailers, wholesalers and diamond producers are closing.

The number of business cuts in the United States and Canada reached 251 in the second quarter of 2015, compared to 241 in the second quarter of 2014. Since the beginning of this year, to the present day, the termination of business - this includes bankruptcies, consolidation (sales / mergers) and companies that have simply ceased operations - increased by 12 percent year on year, from 485 to 545.

The statistics for the second quarter reflect the continuation of the trend, which manifested itself in full in 2014, when the number of business termination increased by 32 percent year-on-year.

During the JBT Internet conference held on Wednesday to discuss the industry's new achievements, President Dione Kenyon cited many of the reasons for the industry's reduction earlier: aging owners who decided not to continue the business and the inability or lack of desire to make the changes necessary to In order not to lag behind in this rapidly changing world.

She also said that some of the recent cases of closure of retailers may be the result of a lack of cash due to gold buyback, which for several years "helped mask the deeper problems that jewelers have," including obsolete stocks and the fact that they are not Adapted to the new technology.

JBT data showed that from the number of closed businesses, the majority prefer to cease operations than to consolidate or file for bankruptcy.

In North America, a total of 216 retailers, wholesalers and diamond manufacturers ceased operations in the second quarter of 2015 compared to 185 in the second quarter of 2014. From the beginning of the year to the present day, the number of businesses that simply closed, increased by 28 percent.

At the same time, the number of consolidations this year has decreased by 43 percent. Kenyon said that although it seems that the deals are "still concluded" behind the scenes, but not so many of them were implemented this year.

The number of bankruptcies, in fact, is not growing. So far in 2014 there were 21 bankruptcies, compared to 20 at this time last year. Kenyon said that this is a continuation of the trend, observed for some time - very few companies tend to spend money on the bankruptcy procedure.

Other main data for JBT for the second quarter include the following:
- The number of new jewelry businesses this year in the United States and Canada reached 152, which is less than 159 at this time last year;

- The total number of registrations for JBT (including retailers, wholesalers and diamond manufacturers) for North America as of the end of the second quarter of 2015 fell 3 percent year-on-year to 29,607 compared to 30,392 in the second quarter of 2014; and

- The number of claims for recovery of debts received by JBT (593) decreased from the beginning of this year, although the average amount of claims ($ 8,728) slightly increased. Kenyon defined the industry's credit data as "OK" (good) during a web conference on Wednesday; Not all businesses make payments immediately or without difficulty, but this is not yet a situation when it is impossible to get a payment at all.

http://www.nationaljeweler.com/independents/retail-surveys/Industry-shrinkage-trend-continues-in-Q2-9642.shtml

Growth in terms of value may reflect a higher proportion of more expensive diamonds

Return after the summer break was far from calm. Although the focus was on the sites, there are other issues, for example, long-term trends, which are becoming more noticeable as we plunge deeper into the current crisis.

After the initial publication of the erroneous data, the Kimberley Process Certification Scheme (Kimberley Process Certification Scheme) published its diamond production figures, imports and exports for 2014. These figures are full of surprises, highlighting some of the changes that the global diamond market is undergoing. They indicate a change in the importance of certain diamond centers, and this affects the entire diamond pipeline.

RUSSIA RISES TO FIRST PLACE

In May 2013, Igor Sobolev, then the first vice president and executive director of ALROSA, told me during a trip to their mine in Mirny that by 2018 ALROSA will be the world's largest diamond mining company. It was a clear goal that the company set for itself. Although until three years before 2018, and the economic situation today is very different from that which was in 2013, there are indications that ALROSA may soon achieve this goal.

[De Beers reports a higher volume of production than the one indicated by the Kimberley Process, the discrepancies are 13.8% in volume and 33% in value. Is it possible for the KP to make a mistake about 14% in the volume of products produced worldwide?]

In addition to the mines in Russia, ALROSA owns a stake in one mine outside the country - the Catoca mine in Angola. Except for this, the company's activities in mining are conducted in Russia, and almost without exception, 94.5% of Russian production belongs to ALROSA.

In 2014, Russia produced 38.3 million carats at an announced price of $ 3.73 billion, becoming the world's largest diamond producer by value and volume, according to KP data. Until 2014, for many years, it was the largest producer in terms of carat volume. The increase in production by 19.9% in value compared to 2013 can be an increase only in accounting books (by volume, growth was only 1.1%) or it may be an accidental improvement in the volumes extracted from the bowels, but how can declare ALROSA, there is no accident or game. Russia / ALROSA as a whole simply continues to move along a predetermined path to achieve the goal.


BOTSWANA HAS BROUGHT TO THE 2 nd PLACE

In retrospect, the growth in ALROSA's production volumes may simply be the difference between a diamond mining company supported by the government and a company owned by a shareholder group motivated to generate profits every quarter. When ALROSA encounters difficulties in selling diamonds, it has the support of Gokhran, the state institution for the formation of the State Fund for Precious Metals and Precious Stones of the Russian Federation.

[In total, in 2014, prices at the level of production rose by 7.6 percent].

Gokhran has an annual budget for the purchase of diamonds from ALROSA. This allows the company to keep mining even in the most difficult times. To secure the proceeds, she sells diamonds to Gokhran, which, in turn, only needs to wait until better times to sell the product to the market. Thus, the Russian government protects ALROSA.

In 2014, Botswana produced 24.7 million carats for the announced value of $ 3.65 billion, which is 6.4% more in volume, but only 0.6% more in value. De Beers produced 98.3% of Botswana's production in 2014, making it an important company for the diamond mining industry in Botswana, like ALROSA for the Russian diamond mining industry.

But in terms of De Beers, in 2014, Botswana's share is 74.3% of its global output, as this company has a wide geography of operations. When customers do not buy so much (as is now the case), De Beers cuts production (as it does now). And this explains why the KP figures for 2015, when released in the third quarter of 2016, may show that Russia has even bypassed Botswana.


GROWTH OF GLOBAL VOLUME OF PRODUCTION FROM THE POINT OF VIEW OF VALUE, LEADING TO INCREASING PRICES

According to the KP, the global production in 2014 amounted to 124.8 million carats worth $ 14.5 billion, which is 4.4% less in volume and 2.9% more than in 2013.

This bodes well for what the diamonds diamond production sector has warned throughout the year - that there will be a deficit of a certain commodity and prices will rise. In general, according to these data, in 2014 prices at the level of mining increased by 7.6%.

Open KP data are broken according to the volume of production, the volume of imports and the volume of exports of diamonds that are tracked when they cross the border. The declared value of diamonds at the mining level (and registered KP) is not necessarily the one that diamond buyers pay to diamond mining companies. Nothing reflects this better than the growth in the average value of diamond imports.

According to the KP, 409 million carats worth $ 56.6 billion were imported by 36 countries, which is 5.7% less in volume and 5.3% higher in value.

[The average cost of imports was $ 138.42 per carat, which is higher by as much as 11.7% year-on-year].

Again, this growth in terms of value may reflect a higher proportion of more expensive diamonds that were accidentally mined this year. This may be unreliable due to a wide variety of sources. In addition, this will also be reflected in the output figures.

It is likely that this double-digit increase in value shows what happened in the trade - diamond mining companies take more for their goods, and first-hand buyers (sightholders and ALROSA counterparties) take greater premiums when selling to the secondary market. These are some of the issues related to the current crisis in the diamond pipeline.

http://edahngolan.com/has-de-beers-unveiled-deep-kp-mistake-russia-dubai-on-the-rise/?utm_source=Edahn+Golan+Diamond+Research+%26+Data+Newsletter&utm_campaign=8df1ca40a2-RSS_feed_newsletter_campaign3_12_2015&utm_medium=email&utm_term=0_3db00ffc52-8df1ca40a2-319355397

Wednesday, August 2, 2017

A sharp drop in diamond prices does not benefit either the mining company or the cutters

Representatives of the diamond business of India are preparing proposals to expand direct purchases of diamonds from the Russian company ALROSA.

Russian-Indian cooperation in the diamond sector received a significant boost after the meeting between Indian Prime Minister Narendra Modi and Russian President Vladimir Putin in December last year. Then ALROSA signed 12 direct contracts for the supply of diamonds to Indian companies. The next meeting between the president and the prime minister can be held in Astrakhan this fall, and the Russian side is expected to present new concrete proposals to expand the diamond trade between the two countries.
A new impetus to the cooperation of India and Russia is attached to the current crisis in the diamond market. In the opinion of industry participants, The prolonged fall in diamond prices is largely the result of speculative operations. Direct supplies of rough diamonds to lapidary and jewelry companies in India could be a good defense against market fluctuations. Here, Russia and India have a common interest: a sharp drop in diamond prices does not benefit either the mining company or the cutters who are engaged in production, rather than the resale of raw materials. Stable prices guarantee stable work and a stable social environment.

Preparing for the future summit, Indian industry representatives are seriously discussing the possibility of introducing a formula for a fair price for rough diamonds, to which ALROSA and Indian lapidary companies would be tied, as well as providing state guarantees for the purchase of Russian diamonds for the largest lapidary firms.

http://rough-polished.com/ru/expertise/98928.html

Tiffany and Co. And Signet Corporation are two examples of success in our industry

Neil Reiff, a veteran jeweler from Philadelphia, Pennsylvania, head of ND Reiff Company Ltd., last month published the following comment on LinkedIn under the heading "Insanity of the Diamond Industry" , In which he raises a number of serious problems and touches upon issues related to our industry. The article was reprinted by Rapaport with permission from Rafe.

It has been repeatedly said that the cost of raw diamonds is too high, and this leads to a lack of profit in the diamond industry. As a person who has dedicated his entire life to this industry, I believe that it is prices in the retail trade of diamonds that are too low.

Diamonds are not an "elastic product", the demand for which increases with an increase in supply or a decrease in the price. Diamonds are not a one-time or consumable product, which must be purchased continuously. Purchase of a diamond for many people is an event that takes place once in a lifetime. The price reduction will not stimulate the increase in sales of diamonds. At best, reducing the price will simply save money for the consumer or increase the weight of his purchase in carats.

As a former student studying business in a prestigious university, I was taught that the purpose of a business enterprise is to create profit. Profit is an essential element of the success of any business structure, since without the profit and the positive cash flow that it creates, the business model is unstable. Profit is the excess of income over expenses, which include the cost of goods sold and many other costs incurred in the course of the business enterprise.

Gross profit is income over and above the cost of the goods sold. It is from this excess of income after deduction of the cost of goods sold and the resulting profit is formed. As many far-sighted businessmen have said, gross profit is the key to determining how healthy the financial condition and future of any business is. With a few exceptions (for example, Amazon.com), revenue growth will not talk about anything unless the business model creates positive cash flows. Such a business will become unstable over time.

Recently I had a business meeting, which led me to these arguments. Here is how it was.

A wholesale buyer tried to sell a 3 carat diamond to a long-time valued retail buyer, with whom he had established professional and trusting relationships. He offered a fair retail price to a client who was excited about the prospect of getting a perfect new diamond for his wife, with whom he had been together for many years. The wholesale buyer / retailer was surprised when his customer called him and said that he can buy the same diamond cheaper on the Internet.  

I can not say how much cheaper, because I do not know the retail price that my customer spoke about. I only know that one online seller has set a price of $ 24,996.00 for the same diamond that I have, and I sell it at a wholesale price of $ 24,575.00! This means a gross profit of $ 421.00 on a diamond worth $ 25,000.00 - a gross profit of less than 1.7 percent!

On this we with the customer both said: "This is insane!" .. What's the point? " This makes no sense, and you should not sell anything at a profit rate of 1.7% compared to the cost price. No matter how effective a person can do business. Regardless of how much a person can receive income.

In this story there are many consequences. Perhaps the customer will now hesitate to buy a diamond for his wife, because the perceived value of the diamond is undermined, as is the confidence he felt for the seller. He probably will just get out of the deal, because he has a bad sludge from all this, and for him it's best to just give up buying.

Or maybe he'll just buy it for $ 24,996.00. In this case, the buyer will purchase a valuable diamond for a price of 1.7% above the wholesale value! In this case, the industry will lose. No one will get a profit, as 1.7% can not be considered a profit. More importantly, there were no additional sales. Ultimately, thousands of dollars were lost - in the form of profits and value for the industry and value for consumers - because the value of diamonds estimated at billions of dollars, perceived by society and industry, was greatly belittled.

As for the question of the profitability of the industry and the impact of "high" diamond prices, the above story shows that there are players in our industry who are striving to nullify the profitability of the industry at any price level. When the price of diamonds falls and, consequently, the price of diamonds should fall, these industry participants nevertheless consider it necessary to make diamonds accessible to people at the same absurd and unstable levels of gross profit. Reduction of wholesale prices for diamonds will simply lead to a decrease in retail prices - in essence, this situation is hopeless.

Tiffany and Co. And Signet Corporation are two examples of success in our industry. Both companies sell diamonds and jewelry to consumers for billions of dollars. They understand that profit is essential for working enterprises. Both of these companies are extremely successful. Their earnings and gross profit continue to grow, despite the fact that others seem to believe that the only way to do business is to sell diamonds at a cost - well, maybe 1-2 percent higher!

Tiffany and Co. In 2014, the company registered an annual sales volume of $ 4,249,913,000, which is 5% higher than in the previous year. Tiffany achieved such a sales volume with a gross profit of 64.3 percent! The trading margin of Tiffany was 280 percent! If we put it in a broader context, Tiffany had a selling price of $ 28,000.00 at a cost of $ 10,000.00, and the above-mentioned Internet retailer would have a selling price of $ 10,170.00 for the same hypothetical product!

Signet Corporation, the parent company of Kay, Jared and Zales, reported in 2015 that it had an annual sales volume of $ 5,736.3 million for the last financial year. Signet's sales volume increased by 36% .1 Signet received such a figure of earnings with gross profit of 36.2% - the trade margin over the cost price was over 156 percent!

It is interesting to note that the Signet annual report, published in 2015, contains the following reference: "Our research constantly shows us that the main reason why people buy jewelry exactly where they buy is NOT the PRICE. . . But TRUST (written in capital letters to emphasize).

This is confirmed by what my friend once told me about why her family buys jewelry from Tiffany. As she explained, she knows that she receives a quality product and, although the price can be high, she receives the same price as others receive. Again, the issue of trust!

http://www.diamonds.net/News/NewsItem.aspx?ArticleID=53119&ArticleTitle=Op-Ed%253a%2bInsanity%2bof%2bthe%2bDiamond%2bIndustry

Diamond companies estimate this volume of production at $ 16.7 billion per year

The more we study the facts, the clearer it becomes that the main problem facing the diamond and diamond industry is that the middle part of the diamond pipeline - the diamond manufacturing sector - does not receive its fair share of the pie.

People consider the diamond sector to be very profitable, enticed by the attractiveness and profitability that embodies diamonds. But the middle part of the diamond pipeline is currently suffering from low profitability, constantly bordering on losses, while the upper part of the diamond pipeline and the lower part of the diamond pipeline retain large profits.

The industry pipeline, based on the low-profit sector, sandwiched between two profitable sectors, is not sustainable. The result will be that the cost structure of the middle part of the diamond pipeline will be disrupted. A study of the issue will show why I think that the requirement for the middle part of the diamond pipeline to "add value" is not reasonable and that investments in knowledge, stocks and financing will not pay off under the existing structure.

Economy of the middle part of the diamond pipeline

In general terms, the middle part of the diamond pipeline acquires diamonds for cash. Then she completely finances the process of producing diamonds and buyers of diamonds, selling diamonds on the terms of relatively long terms of payment.

The upper part of the diamond pipeline and the lower part of the diamond pipeline win the most in the diamond pipeline, receiving the bulk of the profits. In addition, the middle part of the diamond pipeline, in fact, operates on the basis of the "costs plus" approach (costs for rough diamonds and labor plus profit). This includes, apart from all the financial obligations of the middle part of the diamond pipeline, market fluctuations and financial risks, as well as the knowledge gained by it about how to turn diamonds into diamonds. In fact, every company in the middle part of the diamond pipeline works like a cutter who earns a salary, earning perhaps less than a cutter.

- Direct costs for diamond mining in 2014, according to Chaim Even Zohar (Chaim Even Zohar), amounted to $ 7 billion per year.

- In 2013, the diamond mining sector produced and sold about 130.5 million carats. In 2014, this volume is believed to have decreased somewhat, but there is still no official data.

- Of the 130.5 million carats of diamonds, about 70 million carats are diamonds of jewelry quality and almost of jewelry quality, cut and polished for use in jewelry.

- Diamond companies estimate this volume of production at $ 16.7 billion per year. This is so much first-hand buyers in the middle part of the diamond pipeline paying for rough diamonds.

- The world's annual sales of diamonds in 2014 amounted to $ 22.3 billion. The difference between diamond sales of $ 22.3 billion and $ 16.7 billion of purchased diamonds is $ 5.6 billion, or 33.5%.

- About 5,000 companies work in the middle of the diamond pipeline. Dividing the annual volume of purchased diamonds, equal to $ 16.7 billion, to 5,000 companies in the middle part of the diamond pipeline, we find that each company in the middle part of the diamond pipeline spends an average of $ 3.34 million for the purchase of diamonds. Dividing the annual sales of diamonds in the amount of $ 22.3 million to 5,000 companies in the middle part of the diamond pipeline, we find that the average income per company is $ 4.46 million, and therefore the annual gross profit per company is $ 1.12 million. This may seem more than enough, but you need to consider a lot.

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In addition, there remain regulatory difficulties that limit consumer spending on products such as jewelry


There was a feeling that liquidity in the Indian diamond and diamond sector improved. This does not mean that credit has flowed again, it is not. Instead, sharply cutting the purchase of diamonds, cutting costs and collecting "hung" debts on accounts for diamonds, diamond producers are now just less concerned about cash flows than questions of demand and profit rates.

Ironically, at the recent Indian International Jewelery Show India International Jewelery Show (IIJS), diamond manufacturers experienced an uneasy feeling, watching the crowds of local visitors rushing past them and rushing into the gold jewelry section.

Undoubtedly, diamantaires in fact understand that in the long run the prevailing more stringent credit requirements will have some effect on their industry.

The total volume of loans currently granted by Indian banks to this sector is about $ 7 billion, local lenders and trade participants reported. This is almost 20 percent less than a year ago and basically reflects a noticeable decline in activity in the market. Most importantly, large lending institutions do not offer new loans, which makes the work of small and very small companies very difficult.

In response, banks simply require more stable balance sheets from their existing customers to maintain their existing credit lines. Lenders say that the industry has become more mature as a result of the crisis, and they are confident that the loans they have provided will not be directed to other investments, for example, to real estate. However, this causes concern among a number of large diamond producers.

The fact that Indian banks have become more cautious is good for the industry, as earlier light loans have prompted diamond producers to spend too much on diamonds. This situation allows other smaller banks to join this business. And although their readiness for this can not be checked in the current market with low volumes of diamond purchases, it is hoped that they will take far-sighted steps that will limit speculation on diamonds when the market again improves.

Adaptation to weakened demand

The diamond production levels fell by about 30-40 percent compared to the previous year, as production volumes were reduced to match output levels and weakened demand.

Some have moved from the production of their regular products to the release of more demanded diamonds weighing 1 carat and larger. They also focused on smaller diamonds and lower quality, which are much cheaper to produce, in order to maintain the work of the factories and provide employment for workers.

As expected in such an environment, diamantaires anticipate an increase in the reduction of workers in Surat. Redundancy is not a simple matter for the local industry, which has a glorious tradition of maintaining employment levels even in times of deep crisis. As one sightholder noted, companies would cut diamonds much more significantly if they did not have a great sense of social responsibility. But many warned that if current market conditions continue, they will have no choice.

Although there are still no large-scale layoffs in Surat, the workers have already suffered there. Several bankruptcies led to the loss of jobs. And it should be noted that most workers do not have a fixed salary. They get paid depending on the number of processed stones. Consequently, as production volumes and the transition to cheaper stones declined, their productivity and income fell.

Indians should be sold to Indians

During the global crisis of 2008-2009, domestic demand for diamond jewelry gave the Indian diamond industry an edge over other centers of trade and production of diamonds. This was a great success for the industry, which was maintained through local sales, while other markets were experiencing difficulties. The economy of India quickly recovered from the crisis and was able to achieve a record growth of the gross domestic product by 11.4 percent (growth in the first quarter of 2010).

This did not happen during the current crisis in the diamond and diamond industry, as the Indian economy is experiencing some growth sickness after the euphoria that followed the elections last year. "Do it in India", a new government campaign, is designed to make India a factory for the whole world and should benefit the diamond and diamond industry. But, as one diamantair explained, they did not see significant incentives, for example, special tax breaks or improvements in the structure of the labor force, which would stimulate further investments in production.

In addition, there remain regulatory difficulties that limit consumer spending on products such as jewelry. For example, consumers continue to be required to declare purchases in excess of $ 7,800 (INR 500,000), setting a restrictive ceiling on their purchases for cash. The industry has succeeded in protesting against the government's previous attempt to reduce this ceiling to $ 1,500 (INR 100,000).

Such restrictions can become a brake on sales volumes during the Diwali holiday in November and the subsequent wedding season, despite the growth in demand for gold, which was noted during the IIJS exhibition. This is especially true in rural areas, where buyers do not have credit lines and are eager to spend money on gold jewelry and related goods at current prices.

Yet Indian diamantaires have the possibility of long-term growth in the local market. Numerous young generation departs from traditional heavy gold jewelry to everyday jewelry. And the culture associated with diamond wedding rings is developing more and more, where marriage was the norm at the choice of the parents of the bride and groom, in which there are no proposals in the Western style. The industry can and should benefit from these trends.

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Although the majority of diamond mining companies decided to reduce production

Diamonds were discovered in the permafrost of the tundra of the Russian Republic of Yakutia in the 1950s, immediately turning the Soviet Union into an important diamond-mining country. At present, Russia is not only exceptionally rich in these resources, but also an important center for trade, production of diamonds, research and consumption of diamonds.

The very beginning

First, technical diamonds and diamonds of non-jewelry quality were considered an important resource. The USSR viewed diamonds as a vital element of its industrial activities. The discovery of diamond resources on its territory guaranteed the Union independence from Western supplies.

At that time, the USSR depended on De Beers for supplying technical diamonds. He was always concerned that at some point, under the influence of Western governments, De Beers could decide to stop supplying this essential component to its oil-producing and many other industrial enterprises.

The result of this dependence had one surprising, long-lasting and important influence on the world diamond-diamond industry: the creation of diamonds grown in the laboratory. Ironically, Russian diamond resources include a large percentage of gem-quality diamonds (79% of the volume of diamond production in terms of volume) and are known for their beauty and structure (the shape of diamonds).

The first deposit discovered in Yakutia was the Mir tube, discovered in the late 1950s. Over the years, it has become one of the world's largest open-pit mines, and it was closed only recently. At present it is an underground mine - and it is far from exhausted.

In the Mirnyy area, several other deposits were discovered, including the International pipe and several alluvial deposits. Over a number of years, more than ten fields were developed in the country under the leadership of ALROSA, the first enterprise owned by the Russian and Yakut governments together with the diamond miners themselves.

Prosperous Bear

Although at first the attention was focused on the quality of diamonds, jewelry quality was not diminished. Russia developed a large and important branch of polishing diamonds, which gained fame due to the high quality of its faceting and polishing. Among the most famous diamond-producing enterprises in the country are Smolensk Crystal, a manufacturing enterprise that supplies products to some of the jewelry houses that produce the most expensive jewelry in the world.

Although Russia requires that some of its jewelry quality diamonds remain in the country for faceting on the spot, it also signed a marketing agreement with De Beers, then the world's monopoly in the field of diamonds, to sell its products to sightholders on De Beers websites. In 2001, ALROSA and De Beers signed a contract under which ALROSA for a five-year period was to supply De Beers diamonds worth $ 4 billion.

Fully integrated center

After the collapse of the Soviet Union, personal welfare was no longer censured. Russians began to wear smart diamond jewelry as a symbol of wealth, which completed the transformation of the country into a fully integrated diamond-diamond center.

At present, Russia is the world's largest producer of diamonds in terms of volume, having extracted over 36 million carats in 2014. It also ranks second in the world in terms of value after Botswana, and its output is estimated at over $ 5 billion. It produces diamonds, delivers them to customers around the world, cuts, conducts research, manufactures jewelry and has a huge client base brought up by it.

Russian diamond resources provide a full range of stones - all sizes, colors and purity. They are known for their fluorescence, which is usually not very desirable for gem quality diamonds. Another distinguishing feature of Russian diamonds is that they often have the form of a "crystal" with 8 faces and sharp angles. Several Russian mines also produce diamonds of fantasy yellow color.

In view of the fact that the Russian cut is famous, the products of "Russian production" are famous for their very high quality. Having access to a wide range of diamonds, Russian lapidary enterprises also offer a wide range of diamonds. They have long been using automated equipment and robotics and are currently making a big emphasis on this technology.

The ways diverged

Over the past few months, the economy of this global diamond mining industry has been critically analyzed in the pages of this publication. An interesting position in this respect. Under pressure from antitrust authorities in Europe, De Beers lost and said that it would stop all purchases of diamonds from Russia. Therefore, since 2009, ALROSA, the diamond monopoly of Russia, has begun to pave a completely independent path.

The company has gradually created a list of regular customers, and now it has contracts with customers who buy Russian diamonds ten times a year. In 2008, just when the De Beers agreement expired, the crisis in the world economy connected with Lehman Brothers broke out. Although the majority of diamond mining companies decided to reduce production, ALROSA chose a different path. It maintained stable production volumes and sold its diamonds to Gokhran, the State Agency for the Formation of the State Fund of Precious Metals and Precious Stones of the Russian Federation, the storage, release and use of precious metals and precious stones. Gokhran, being a branch of the Russian Ministry of Finance, is responsible for the purchase, storage, sale and use of precious metals,

The Russian government provided financial support to its diamond mining industry and bought diamonds for billions of dollars. This served as a buffer for ALROSA and gave it the opportunity to work peacefully during global financial difficulties.

Local diamond production enterprises do not receive exceptionally large financing from banks that limit the ratio between the industry's own and borrowed capital and ensure their safety. In 2011, these companies polished precious stones worth $ 850 million.

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