World's Largest Diamond Exhibition Opens in London

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Vol. 28 No. 9 - April 2015

Global Economy Impacts Tiffany & Co.

Baselworld Design Competition Winners

The Fancy Colour Diamond Index

GCDC 2015 Award Winners Unveiled

From Brazil to China : The Journey of Rubellite Tourmaline

Global Economy Impacts Tiffany & Co.

Tiffany & Co's sales fell 1 percent year on year to $1.3 billion during the fouth quarter that included the Christmas season and ended on January 31. Same-store sale were flat. Same-store sales were flats. Measured by a constant-exchange-rate basis, worldwide sales rose 3 percent due to grownth in Europe and the Asia-Pacific. Profit rose to $196 million, or $1.51 per share, from a loss of $104 million one year ago, which was the result of the company's arbiration with the Swatch Group. Tiffany & Co. added that without the arbitration charges in 2013, profit would have been $190 million. Grass margin as a percentage of sales rose to 60.8 percent from 60.5 percent one year earlier.
In the Americas, revenue fell 1 percent to $653 million in the fourth quarter, while comparable-store sales were flat. Across the Asia-Pacific region, sales increased 4 percent to $284 million and same-store sales rose 3 percent. Tiffany & Co. noted strong grownth in China, Australia and Singapore. Meanwhile, in Japan revenue fell 13 percent to $148 million and comparable-store sales decided 5 percent. In Europe, revenue was flat at $162 million but same-store sales increased 4 percent. Frederic Cumenal, the president of Tiffany & Co., said. "By now it should be clear that Tiffany & Co., said. "By now it should be clear that Tiffany & Co., is facing challenges from global economic uncertainties, especially from the effect of a strong U.S. dollar on the transiation of foreign denominated sales into dollars and on foreign tourist spending in the U.S. As a result, we have adopted a cautious approach in our planning for the coming year, antipating modest grownth in net sales and minimal net earning grownth for the full year. this assumes pressure on sales and earning in the first half of the year followed by healthy grownth in the second half. Longer term, we see an excitting future for Tiffany as we pursue important expansion opportunities." Tiffany & Co., plans for this year include adding (net) between 12 and 15 stores, introducing new designs, including Tiffany's new CT-60 watch collection, and continuing to invest in new technology systems and strive to effectively deliver an exceptional in store experience, Cumenal said. For the full fiscal year, worldwide sales improved 5 percent year on year to $4.25 billion, while comparable-store sales increased 4 percent. On a constant-exchange-rate basis, worldwide revenue rose 7 percent. Profit incresed 168 percent to $484 million, or $3.73 per diluted share. Tiffany & Co. had recorded a charge of $473 million in the previous fiscal year due to the Swatch arbitration. In the Americas, revenue and same-store sales improved 6 percent to $2 billion, while in the Asia-Pacific sales jumped 9 percent to $1 billion as comparable-store rose 10 percent. In japan, revenue fell 4 percent to $554 million but same-store sales rose 1 percent. Across Europe revenue improved 6 percent to $497 million but comparable store sales fell 1 percent. During the year, Tiffany & Co, opened eight and closed two stored. At the end of the fiscal period, the company operated 295 stores (122 in the Americas, 73 in Asia-Pacific, 56 in Japan, 38 in Europe, 5 in the United Arab Emirated and 1 in Russia).

Baselworld Design Competition WInners

     Jewellery-focused 3D wax printing specialist Solidscape has announced the winners of the fourth annual Baselworld Design Competition.

     Capturing the Platinum Award for jewellery the third year in a row is the OG-Art Studio team from Bialystok, Poland. The brand produced a spectacular Dragon Pendant design that features complex geometry and incredible detail requiring the highest precision in 3D printing and casting excellence.

     The Gold Award for jewellery went to a Chrysanthemum-inspired brooch by Hiroaki Watanabe of Japan. The variety and sizes of Chrysanthemums symbolically represents a long and peaceful life. The delicate flower petals ironically demand the most extreme precision in 3D printing.

     Tied for the Silver Award for jewellery was the exquisite Firebird Pendant by Sri Lanka's W.A Chamal S Jayaratna and the whimsical l\/lermaid ring from the House of Witlelsbach in the US.

     A new category for 2015 was the ‘Fine Art‘ award. These unique entrants represent free form expression of non-jewellery designs executed in a manner similar to jewellery. They require mastery of CAD design and Solidscape's industry-leading high precision in 3D printing to create flawlessly castable pieces.

    The PLatinum Award for fine art was awarded to the intricately-detailed Violin figurine from German Oliver Bargardts of Highers Lyrics Art. His dancing violin figurine from German Oliver Borgadts of higher Lyrics Art. His dancing violinst hits the high notes in detailed design, capturing the best of human expression.

     The Gold Award for fine art was presented for the 'Cassoulet with Phonix' design by Hiroaki Watanable of Japan, His incense box is designed to create a peaceful atmosphere with comfortable scents while the phoenix is a symbol of everlasting peace and long life.

     The Silver Award for fine art went to the finely-detailed Ballerina figurine from Meenakshi Rawa of India.

     Design entries were judged based on successful wax modeling printed by Solidscdpe 3D best design (driisiry and style), as well as best design (artistry and style), as well as best use of Technology [CAD/Solidscape 3D printng]. technology," said Fabio Esposito, president of Solidscape. “Designers now have The abiliiv to create complex geometries impossible through traditional hand caving techniques. These designers are thriiled because Solidscape's precision 3D printing technology allows them to unleash their imagination and push the boundaries of creative design".

The Fancy Colour Diamond Index

     The new index by The Fancy Colour Research Foundation [FCRF] shows that fancy colour diamonds have delivered strong and consistent price increases, outperforming key global asset indices, since 2005.

     Fancy colour diamonds, predominantly made up of yellow, pink and blue diamonds, have always been highly prized and rare assets. They are found randomly and unpredictably in diamond mines throughout the world and are enjoyed by sophisticated jewellery buyers and gem collectors alike. Consistent recent growth in values has reflected the changing dynamics of global wealth notably the fast paced growlh of emerging markets and the appeal of fancy colour diamonds as an investment product.

     The Fancy Color Diamond index has been developed by the FCRF from proprietary access to tens of thousands of fancy colous diamond transactions since 2005 and will be updated on a quarterlly basis. The Index prevides greater knowleadge and understanding of fancy colour diamond pricing trends to jewellery retail, wholesale and mining industries.

     Fancy Color Diamonds across pinks, yellows and blues, have increased in value by 16.7% on average since January 2005, outperforming other leading asset indices in s similar period, for example, the Dow Janes industrial Average has increased 58% and STandard & Poor's 500 has increased 63% and London house prices have incresed 82.1 %.

     Looking in more detail the index shows that pink diamonds have shown that pink diamonds have shown the greatest grownth in value, up by 360% in the last nine years, with blues showing less dramatic but equally consistent grownth of a 161% value increase. Crucially, both pink and blue diamonds were unaffected by the global financial crisis with blues keeping their value and pinks still increasing through 2008-2010.

     The publication of the index marks the launches of the FCRF, which is an independent, non-profit organization formed to promote fair-trade, ethics and transparency in the fancy colour diamond retail wholesale and mining industry.

     The FCRF activity will encompass :

     - Developing Innovative research and digital tools that will support the fancy colour diamond retail selling process for consumers, retailers and collectors.

     - Promoting fair-trade in fancy colour diamonds throughout the value chain underpinned by reliable data analysis to create a uniform knowleadge base across all industry layers

     - Authoring publications to clarify the complex methodology for evaluating fancy colour diamonds.

     - Correcting common misconceptions about evaluating fancy colour diamonds

     The FCRF expects that together these activitives will enhance consumer demand and retail understanding of fancy colour diamonds.

     The FCRF was initiated by Eden Rachminov, author of the Fancy Colour Diamond Book and winner of the NCDIA education award.Ambitions and activities of The FCRF will be guided and evaluated by an experienced board of advisors that work thoughout the diamond pipeline.

     Eden Rachminov, member of the Board of Adivisors for the FCRF comments , "The launch of the Fancy Colour Research Foundation is in response to the grownth in fancy colour diamonds transactions and the resulting need for greater education, understanding and clarity in the industry.

     "The process and skills for evaluating fancy colour diamonds are unique to this exceptional product. As a result there is a need to clarity misconceptions and to highlight the differences to evaluatingcolourless diamonds. In addition to publishing The Index, The FCRF is developing and publishing a series of practical tools, targeted at retailers. We are confident that the Fancy Colour Research Foundation will be a significant influence on increasing deman within the Fancy Colour Diamond industry".

     Membership of the FCRF is Open to retailers, auction houses, wholesale traders/manufacturers, financial institutions, insurance appraisers and mining companies.

     Organizations interested in membership of the FCRF should visit fcresearch.org to register details.

     The jewellery retail trade is being offered new chaneis of information by the Fancy Color Research Foundation about the tradtionally little-known category fancy colour diamonds. Launching last year, the foundatation was established after feedback from retailers that have historically faced channenges in valuing and trading in fancy colour diamonds. It is inviting mebership from across the diamonds and jewellery industries. The benefits of membership include:

     - Full access to the breadth of research data and analysis that the foundatation has collated over the past decade

    - The index , developed by the foundatation from proprietary access to tens of thousands of fancy colour diamond transactions since 2005 that will continue to be updated on a quarterly basis

    - Real-time updates on auction results, analysis of sales and educational tools released by the foundatation

    - Publications such as the Fancy Colour Diamond book, an upcoming publication on valuing fanncy colour diamonds and additional online tools.

     Further information regarding applications for membership is available at fcresearch.org (payment can now be carried out online).

This will ease trade in Fancy Colour Diamonds by creating greater transparency around values across the jewellery retail, wholesale and mining industries and promote an understanding of the valuation process of fancy colour diamonds. Reception has been highly ppositive with one prominent, high-end retailer registering memberships for 20 retil locations. Strong feedback has also come from existing members who have said that information provided by the foundation has been helpful in facilitating salles.

The fancy colour diamonds index (FCDI TM) indicates fancy colour diamonds. prices showed stability in the last months of 2014. The index was first launched in November 2014 to measure and analyze the performance of these rare diamonds as an alternative asset class. The January 2015 Index shows that fancy colour diamonds are continueing to exhibit consistent price levels, against a backdrop of other commodity value declines in Q4 of 2014.

The Index is the first piece of fancy colour diamond market analysis to provide this type of industry intelligence. It revealed that fancy colour diamonds, across the categories of pinks, yellows and blues, have increased in value by 167 percent on average since January 2005, outperforming other leading assets in a similar period. The Dow Jones industrial average, for example, has increased 58 percent. Standard & Poor's 500 has increased 63 percent and London house prices have increased 82.1 percent.

According to the most recent Index in January 2015, fancy colour diamond remained practically unchanged in the period between October 1 and December31, 2014. This performance is further testimony dynamics of fancy colour diamonds.

This is especially remarkable when compared to the significentweakness in while diamond prices during the same period: according to the Rapnet Diamond Index [RAPI TM] , 1 carat diamonds prices declined by 5.0% over the same period; 0.30 carat diamond prices declined by as much as 9.2%. At the same time, other commodities including oil iron ore and cool also suffered steep price declines.

    Within Fancy colour categories, 10 carat blue diamonds (fancy, intense and vivid) experienced the highest price increases (about 4%) of all categories.

    During January 2015. The FCRF significantily expanded its global contributor reach in collecting process became fully automated: secure, online questionaires were sent to a large, representative sample of leading fancy color diamond trading organizations, who provided detailed and granular market pricing inputs for all fancy colour diamond categories included in the index. Furthermore, the collected information included, for the first time, pricing data for three new size categories: 1.5, 3 and 8 carats (across all colours).

    Ishala Gol, a member of the board of advisors for the FCRF, commented, "unsurprisingly, the fourth quarter data collected by the FCRF team realfirms our knowledge and understandaing from the last decade that fancy colour diamonds are a separate niche, almost non-correslated to white diamonds.

    He continued :"Fancy colour diamonds are rare and highly desirable, In periods of financial instabillity we have witnessed time and again that collectors, retailers and investors are able to maintain their assets value even as other asset classes are depreciating in price. This is caused by the inherent lack of global inventory, which is only projected to worsen in coming years. Our date contributors are reporting decline in number of transactions, mainly as a result of political developments in China.

Detailed index date and charts are available to members on the FCRF website and are one of the key benefits of membership of foundation. Over the coming months a number of additional publications that provide the jeweller retial trade with crucial fancy colour diamond knowledge and information will be launched.

GCDC 2015 Award Unveiled

    The Winners of the annual Goldsmiths' craftsmanship and Design Competition have been announced at Goldsmiths' Hall in London, with Omella lannuzzi walking away with the prestigious Goldsmiths' Company Award.

    This event was hosted by Kay Alexander and supported by a number of important trade companies and individuals, sponsors, industry associations and trade press.

    A total of 111 winners were honoured in 23 categories with 22 Gold Awards, 36 silver Awards and 53 Commedations from over 600 entries.

    The Lifetime Achievement Award for 2015 was presented to Norman Bassant for his outstanding and distinguished craftmanship and teaching. He also served on the Goldsmiths' Craft & Design Council for over 20 years.

    The Goldsmiths Craftmanship and Design Competition is designed to reward rewards excellence in techinical skills and creative design in precious metals and related materials. The Goldsmiths Craft and Design Council, which runs the competition, actively encourages craftsmen and designers in the industry, apprentices and students to enter their work.

    This year's headline sponsors for 2015 included the Goldsmiths' Company as founding and lead patron and Cartier as principal patron.

    International Jewellery London (IJL), Gemmonlogical Association of Great Britain (Gem-A), and The Goldsmiths' Centre are all special patrons, with HRH Princess Michael of Kent as the Council's royal patron. New special award patrons joining this year are Vipa Designs Ltd, C.W.Sellors Fine Jewellery, The National Association of Goldsmiths and Theo Fennell.

   The competition accommodates all craft and design activities in the profession, including specialist sections such as diamond mounting, setting, silversmithing, chasing, enameling, 2D design - including CAD, jewellery, smallwork, technology and many more.

    Chairman Mark Huggins said: "This competition encourages, promotes and celebrates excellence technical skill and originality in craftmanship and design. These elements remain central to the continued success of our industry and I would like to pay tribute to all those who entered and the winners honoured with Awards this year. I am particularity delighted that Normal Bassant received the Lifetime Achievement Award for his outstanding contribution to education and the precious metals industry,"

From Brazil to China : The Journey of Rubellite Tourmaline
By Andrew Lucas

    In April 2014, a team from GIA traveled to Brazil to document some of Brazil's most important emerald and tourmaline mines. One of the mines the group visited was the Cruzeiro, owned by Nevesfones, a family company. The Cruzeiro is a prolific Brazilian Tourmaline mine that produces about 8 tons of tourmaline each year, 20 percent of which is rubellite.

    In June 2014, a member of the GIA team, Andrew Lucas, Traveled to Asia to attend Gemfields' first Mozambique ruby auction in Singapore and to teach a two-week GIA low enforcement seminor in Hong Kong. While there, he visited the Hong Kong office and Shenzhen factory where Cruzeiro's rubellite is fashioned and distributed to the market.

The Mirando Group
    Our representative's documentation of the journey of rubellife tourmaline from Brazil to China began at The Hong Kong office of Mirondo Group Co. LTd. There, he intenviewed Miranda Costa, a co-founder of the compony. They spoke in detail about his experience in the market and The connection between Brazil's rubellife Tourmaline and The Chinese market. Mr. Costa had been a partner in Mirondo Gem Hong Kong betlween 2005 and 2009. When that company closed in 2009, Mr. Costa co-founded Mirondo Group Co., Ltd.

    The Miranda Group started working with rubelite in 2010 and entered into a joint venture with KGK, a global diamond wholesaler, to acquire and market rubellite in China. At that time, the Miranda Group was buying rubellite from Africa. in 2011, they started working with the Cruzeiro mine and its owners, the Neves family.

The business model
    Today, the Cruzeiro mine, the Miranda Group, KGK work together to bring Brazil's rubellite tourmaline to the market in China. The Cruzeiro mine provides the rough rubelliie to the Miranda Group, cuts the material. The rough crystals are sliced or in the Miranda Group office in Hong Kong, and celed and polished at the factory in Shenzhen. The stones then go to KGK's factory and offices in Panyu. China.

    KGK markets and sells the cut stones and also mounts cut stones for sale, primarily in China. The Cruzeiro mine also cuts its own facet-grade green and blue tourmaline in Brazil and provides bicolor and multicolour tourmalines in Brazil and produces bicolour and multicolour tourmaline, which the Miranda Group has been cutting and stockpilling.

    The Miranda Group can cut about 25,000 to 30,000 carats a month at their factory in Shenzhen. They then provide The cut stones to KGK. The Miranda Group also works with bicoliour Tourmaline, aquamarine, morganite, emerald, and Mozambique ruby. They cuT These maTerials and work wiTh KGK To sell primarily To The Chinese market. They also deal in Mozambique copper-bearing Tourmaline and Brazilian Paraiba Tourmaline which, in cooperaTion with KGK, They will supply To The markeT in 2015.

Fashioned rubellite production
    The Miranda Group needs To receive T00 kilos of rough rubelliTe a month to meet its production goal of 25,000 to 30,000 carats. They promoTe more-included material for beads and carvings. The company's goals for facet-grade maTerial are To produce clean stones That meet the requirements of The high-end Chinese market.

    in the United States, the Miranda Group plans to market gems of 3 carats or smaller, to meet what they feel is the right price point for that market. in China, there is a ready market for sizes over 3 carats, including very large sizes of 100 carats or more.

    Miranda Costa estimates that the demand from the Chinese market has caused the price of rubeliite tourmaline to double over the last 3 years. Even though there is current resistance to the high prices, the company still finds it difficult to meet the demand for fine-quality faceted stones, so he thinks there is still room for price increases.

    For high-end consumers, the rubeliite needs to be well proportioned, bright, and clean, and have fine colour. Because these qualities are essential, the Miranda Group only gets about i2 percent weight retention from the rough.

    Since many of the crystals from the Cruzeiro mine are bicolour or multicoloured, the Miranda Group also cuts that material. Many of the tourmaline crystals from Cruzeiro are zoned with black, green, and rubeliite colours. The Miranda Group obtains green-and-rubellite bicolour tourmaline rough for cutting. Photo by Andrew Lucas/GIA, courtesy Miranda Group Co. Ltd. The faceting equipment was optimized for machines use a two-wheel set-up that cuts the them without a need for stopping and changing Andrew Lucas/GIA, courtesy Miranda Group C0. colours. The Miranda Group has accumulating green-and-rubeliite last two years, so they have about carats in stock now. They plan on and China in the near future.

Completing the journey
    Visiting a mining operation and witnessing challenges involved in bringing gemstones out of the earth gives you a sense of perspective on how rare and valuable they really are. its exhiaraing to observed the production at a prolific mine where impressive crystals come right out of the ground in large quantities. its also satisfying journey by seeing the rough beautiful faceted stones. Finally, and increasing appetite of a the material puts the relationship demand perfectly in perspective.