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Sunday, November 28, 2010

$45 Billion Spent on Black Friday, Jewelry Sales Up 2.6%



Approximately 212 million shoppers visited stores and websites over Black Friday weekend, up from 195 million last year, according to the National Retail Federation. People also spent more, with the average shopper this weekend spending $365.34, up from last year’s $343.31. Total spending reached an estimated $45 billion.

“While Black Friday weekend is not always an indicator of holiday season performance, retailers should be encouraged that a focus on value and discretionary gifts has shoppers in the spirit to spend,” said Matthew Shay, NRF president and CEO. “As retailers look ahead to the first few weeks of December, it will be important for them to keep momentum going with savings and incentives that holiday shoppers simply can’t pass up.”

According to the survey conducted over the weekend by BIGresearch, the number of people who began their Black Friday shopping at midnight tripled this year from 3.3 percent last year to 9.5 percent in 2010. By 4 a.m., 24 percent of Black Friday shoppers were already at the stores. Thanksgiving Day openings have also been a boon to the industry, as the number of people who shop on Thanksgiving—online and in stores—has doubled over the past five years, from 10.3 million in 2005 to 22.3 million in 2010.

The number of people who purchased jewelry over the weekend rose substantially, from 11.7 percent last year to 14.3 percent this year. In addition, more people purchased gift cards, toys and books and electronic entertainment than a year ago.

“It’s certainly encouraging to see an increase in traffic and sales from the four-day holiday weekend, however, consumers still have concerns about the economy, jobs, and paying down debt,” said Phil Rist, EVP, BIGresearch.  “It was the consumers’ search for deals and bargains that drove the weekend traffic rather than their confidence in the economy.”

While shoppers seemed focused on getting good deals, items of strong value seemed to win out over the absolute lowest prices, according to the survey. Both department stores (52% this year vs. 49.4% last year) and clothing stores (24.4% vs. 22.9%) saw healthy increases in traffic, while the percentage of people who shopped at discounters declined from 43.2 percent last year to 40.3 percent this year. The percentage of people who shopped online this weekend rose 5.1 percent, from 28.5 percent last year to 33.6 percent this year – a strong sign heading into Cyber Monday, a marketing term created by Shop.org, a subsidiary of NRF, for the Monday immediately following Black Friday for online shoppers.

The survey, conducted Nov. 25-27, polled 4,306 consumers and has a margin of error of plus or minus 1.5 percent.

Thursday, November 25, 2010

Tiffany Q3 Sales Up 27%


As the holiday shopping season begins Tiffany & Co. appears poised to take full advantage. 

The luxury jewelry retailer said Wednesday that worldwide net sales for the third quarter increased 14 percent to $681.7 million, with growth in all geographic regions. On a constant-exchange-rate basis, which excludes the effect of translating foreign-currency-denominated sales into U.S. dollars, worldwide net and comparable store sales increased 12 percent and 7 percent, respectively. 

The sales increase and a higher operating margin contributed to a higher-than-expected 27 percent increase in net earnings for the period, ended October 31, the company said. Net earnings from continuing operations adjusted to exclude nonrecurring items increased 43 percent.

"As third quarter results demonstrate once again, Tiffany's expanding, globally diversified store presence provides a significant platform to generate sustainable sales and earnings growth," said Michael J. Kowalski, Tiffany chairman and CEO.

Sales in the Americas region, which includes the U.S., Canada and Latin/South America, increased 9 percent to $331.8 million in the third quarter. On a constant-exchange-rate basis, sales increased 9 percent and comparable store sales increased 5 percent. Sales at Tiffany’s flagship store in New York declined by 3 percent for the period. Branch store sales in the Americas increased 8 percent. Internet and catalog sales in the Americas increased 7 percent fir the quarter. 

Sales in Japan rose 12 percent to $130.8 million in the third quarter.  On a constant-exchange-rate basis, sales increased 2 percent. Comparable retail store sales declined 2 percent for the quarter. 

Sales in Asia-Pacific increased 24 percent to $127.1 million in the third quarter. On a constant-exchange-rate basis, sales increased 20 percent in the quarter, due to strong growth in most countries, the company said. Comparable store sales rose 11 percent.

Sales in Europe increased 22 percent to $77.5 million in the third quarter and 29 percent on a constant-exchange-rate basis. Sales increased 29 percent in the quarter, with double-digit percentage growth in the U.K. and most of continental Europe, the company said.

Other sales increased 26 percent to $14.6 million in the third quarter due to increased wholesale sales of finished goods to independent distributors within emerging markets; wholesale sales of rough diamonds increased in the year-to-date. 

"We are quite pleased with the performance of new stores and recent product introductions including the yellow diamond and leather goods collections," Kowalski said, adding that the company is increasing its full-year outlook.

For the full year, ending January 31, 2011, worldwide sales are projected to increase by 12 percent, the company said. By region, sales for the year are expected to increase approximately 10 percent in the Americas, by a mid-twenties percentage in Asia-Pacific, by a low-single-digit percentage in Japan and by a high-teens percentage in Europe, the company said. Other sales are expected to decline modestly.

Tuesday, November 23, 2010

Timepiece Tuesday: Time Machine Wins Award, Bottega Veneta's Luxury Watch, Aggasi and Longines Make Education Pitch


Time Machine Wins Concept and Design Award
The Horological Machine No. 4 Thunderbolt has received the prestigious Grand Prix d’Horlogerie de Geneve award for best Concept and Design Watch. It’s maker, MB&F created the aviation-inspired watch case and engine as a single unit. The Thunderbolt's engine is the result of three years of development. Each of the 300-plus components–including the regulator and even the screws–was developed specifically for this particular watch. Every component and form has a technical purpose, the watchmaker said. 




Bottega Veneta Introduces Luxury Watch
Italian luxury goods house Bottega Veneta has teamed up with Swiss luxury watchmaker Girard-Perregaux for its first ever watch, the Bottega Veneta BVX, a unisex watch that features the fashion house’s signature woven leather pattern on its strap. The dial has a black, brushed titanium cover case while the face is brown. The strap is crocodile leather and is cigar colored. It has an 18k rose gold automatic movement made by Girard Perregaux. The case measures 41 mm across and is made of brushed titanium. Titanium has the highest strength-to-weight ratio of any metal and is also corrosion-resistant and hypoallergenic. The back of the watch is faced with crystal, leaving the workings completely exposed. The case is finished with a PVd coating in Bottega Veneta’s signature brunito color. Read more about at Lorre White, the Guru of Luxury Web site.




Agassi, Longines, and Fink’s Jewelry Host Education Event
Swiss luxury watch company, Longines hosted “A Day With A Legend Event” at Fink’s Jewelers on November 16 at its Tysons Corner location. Longines brand ambassador and tennis legend Andre Agassi spoke to children from the USTA Mid/Atlantic and fans about his views on education in America, the Longines Elegance Scholarship Fund, his school, The Andre Agassi College Preparatory Academy, and the work of his foundation, the Andre Agassi Foundation for Education. The foundation has raised $150 million for education initiatives since it’s founding in 1994. Agassi was accompanied by a graduating senior, Micah Jones, from his Nevada-based preparatory academy. Longines set up a smash court in-store where the tennis legend hit a few balls with the children from the USTA Mid/Atlantic. For a $5 donation to Agassi’s foundation, attendees at were able to test the speed of their serve. The fastest men’s and women’s serve received a Longines timepiece. Fink’s Jewelers said it would donate 10 percent of the sales of Longines timepieces for the month of November and December to Agassi’s Foundation. Later that evening, Longines hosted a dinner at Fink’s Jewelers where education was the topic of discussion.

Monday, November 22, 2010

RJC Warns Members not to Trade in Marange Diamonds

A watchdog organization for the sustainable and conflict-free sourcing and sales of gemstones, precious metals and jewelry has told its members not to trade in diamonds from the Marange mine in Zimbabwe until it receives Kimberley Process approval.

“No trade of Marange diamonds can currently take place under the Joint Work Plan until an agreement can be found. Participants are therefore reminded of the need for vigilance and ask Participant to notify the WGM chair in the event of receipt of an irregular shipment of Marange diamonds, until new arrangements are agreed that will allow continued implementation of the Joint Work Plan, including the supervised export mechanism,” The Responsible Jewellery Council said in a statement to its members.

The RJC is a non-profit organization promotes responsible ethical, human rights, social and environmental practices in a transparent and accountable manner throughout the industry from mine to retail. Zimbabwe wants to export diamonds from its controversial Marange field, where human rights groups allege it is the scene of forced labor, torture, beatings and harassment by government troops. The southern African country denies all allegations.

The Kimberley Process is charged with preventing trade in “blood” or “conflict” diamonds, the term used for diamonds mined in a war zone and sold to finance an insurgency, invading army's war efforts, or a warlord's activity. It operates a certification scheme designed to eliminate these issues in the trade of diamonds by identifying the source of a diamond’s origin. After four days of closed-meetings I early November, the KP was unable to reach a decision on the trade of these diamonds.

The KP suspended diamond trading from the Marange mine, then instituted a Joint Work Plan where diamonds could be sold under KP supervision. Two diamond sales were held in August and September. But NGOs and some diamond traders are not convinced that the alleged human rights abuses have been eliminated.

The RJC statement reads as follows:

As is known to all Kimberley Process (KP) Participants, and as is stated in the Draft Communiqué, circulated to all participants on November 12th, 2010, the Plenary did not come to an agreement regarding KPCS arrangement for diamonds from the Marange area (Zimbabwe). Consultations are ongoing and I am confident that we will find a consensual way forward which recognises the progress made by Zimbabwe in terms of compliance with KP requirements, whilst offering sufficient reassurance that there would continue to be progress in all areas under the Joint Work Plan, so that we can eventually bring the whole of Marange – and indeed Zimbabwe as a Participant - into full KP compliance. Meanwhile, it is of utmost importance that all Participants remain vigilant and ensure that the terms of the Joint Work Plan and Saint Petersburg agreement are respected these consultations are ongoing. As a consequence, no trade of Marange diamonds can currently take place under the Joint Work Plan until an agreement can be found. Participants are therefore reminded of the need for vigilance and ask Participant to notify the WGM chair in the event of receipt of an irregular shipment of Marange diamonds, until new arrangements are agreed that will allow continued implementation of the Joint Work Plan, including the supervised export mechanism. I very much count on your support and will keep you informed of developments.

Tuesday, November 16, 2010

Timepiece Tuesday: Antiques, Girl’s Luxury Watch, Special Editions, An Awards Preview and a Social Media Contest


Chinese Watch Collectors Have Appetite for Vintage Pieces
Is there anything regarding luxury that the Chinese don’t want? Each season, Christie’s presents a range of 19th-century timepieces made especially for the Chinese market. This year, at the auction house’s Dec. 2 auction of watches, five 19th-century timepieces made especially for the Chinese market are coming up for sale. One, a circa-1877 gold-and-enamel pocket watch depicting three angels, is estimated to sell for between HK$320,000 and HK$480,000 (pictured). In addition, in 2005, Asia overtook the U.S. as the biggest market for Patek Philippe. Collectors are buying both new and vintage models, but there is an increasing focus on older pieces, according to the Wall Street Journal blog, Scene Asia.

Antique Clock Auction


Clocks will be a major focus in the Skinner, Inc. annual auction of Science, Technology & Clocks on November 20 in its Marlborough, Mass., gallery. Among the timepieces on the block, is a very important regulator by the Bond Shop (pictured). The Regulator No. 396 is was one of three made; No. 394 was developed for the Harvard Observatory, No. 395 for an observatory in Liverpool, England, and No. 396 for the personal use of Bond in his chronometer shop. As the director of the Harvard Observatory, Bond was one of the first to work towards establishing standard time. It is estimated at $300,000 to $500,000. Other clock highlights include a Newport tall clock, c. 1725 by William Claggett of Newport, R.I., which is the earliest American clock being offered in the sale. The piece is estimated at $60,000 to $80,000. The sale also includes a number of Willard clocks.

Frederique Constant to Introduce Luxury Girl’s Watch


The U.K. trade publication, Professional Jeweller, has learned that Frederique Constant will introduce a girl’s luxury watch at BaselWorld. “The company’s global sales director, Ralph Simons, confirmed it with a nod of his head during an interview this week,” the publication wrote. Stay tuned.


Marvin Unveils Sébastien Loeb Collection
Swiss luxury watch brand Marvin has created a new limited edition line in partnership with its ambassador, World Rally champion Sébastien Loeb. Two exclusive chronographs have been developed with Loeb and they both carry his signature. Their design is the work of two creative watchmakers: Jean-François Ruchonnet, best known for the TAG Heuer Monaco V4 and the Cabestan, and Sébastien Perret, the Neuchâtel designer who has been associated with all recent Marvin collections. The new Loeb Special Edition has a 44 mm diameter steel case flexible red horns mounted on spring suspensions, buttons coated in black PVD that resemble gear change paddles, and counters designed like dashboard instruments. The collection is limited to 777 pieces, representing Loeb’s seven world championship titles.


Grand Prix d'Horlogerie Preview
The 2010 edition of the Grand Prix d'Horlogerie de Genève will be November 18 at the Geneva Grand Théâtre. Ten timepieces have been shortlisted for each of the competition’s seven categories, including best ladies, men’s, design, jewelry, complicated, sports and the Petite Aiguille watch prize (the best timepiece under SFr5,000). There will also be four special awards, including the public prize, voted for by 5,000 participants. Brands shortlisted include Bulgari, Van Cleef & Arpels, Ralph Lauren, Audemars Piguet, Piaget, Chopard, Chaumet, Graff, Harry Winston and Chanel. The Financial Times has written a preview of the prestigious event that can be viewed here (subscription required).


Baume & Mercier In Search of ‘Very Special Reporter’
Baume & Mercier has launched a contest appealing to its social media fans. The Swiss luxury watch brand has invited its 75,000 Facebook fans to upload videos explaining their love of the brand and why they would make ideal "Very Special Reporters" at the upcoming Salon International de la Haute Horlogerie in Geneva, Jan. 17–21, the trade show for high-end watch manufacturers and buyers.

Judith Kinghorn and Her High-Karat Jewelry Designs


Layers of high-quality materials, multiple textures, various techniques and plenty of labor go into the jewelry designs of Judith Kinghorn.

The Minneapolis-based jewelry artist and metalsmith works primarily in high-karat gold and sterling silver, which she often pairs with precious gemstones. She combines heavy layers of gold and sterling silver that are milled and then textured. Her creations are often the result of multiple metalsmithing processes and techniques that result complex, cohesive works. She doesn’t work from drawings and her designs are inspired by nature and modern world.



Kinghorn was one of the jewelry artists at the Philadelphia Museum of Art Craft Show.

Barbara Heinrich and her 18k Gold Jewelry

18k yellow gold leaf cuff with scattered diamonds and polished rims.

With the price of gold breaking records daily, many jewelry artists and designers and switching to less expensive materials like silver. Not Barbara Heinrich. The Pittsford, N.Y.-based goldsmith and jewelry artist is continuing to make her 18k jewelry and says that business remains strong. That’s because she is using creative ways to make her work more affordable without compromising the beauty of her nature-inspired designs.



“I find that the way to continue designing in gold is to just keep things very open and airy and light and lacy,” the German native said during the Philadelphia Museum of Art Craft Show, held November 11-14. “I find that people continue to want to wear gold but we just need to adjust the designs to the new circumstances. … I have found this year we have done very well due to all the new designs we have developed.”

Her new 18k cuff bracelets (pictured at top) are lighter than they have been in the past but because of the superior fabrication process, they remain sturdy. Her rings, necklaces and bracelets (above) are open and airy, mostly made of circular patterns, so they are both light and attractive.

Etienne Perret and His Ceramic Jewelry

Jewelry designer Etienne Perret has been enamored with ceramic for about 20 years. But creating fine jewelry out of the extremely hard material has been difficult nut to crack. The solution was to use diamond cutting tools.


The Camden, Maine-based artist introduced his new line of rings and bracelets made from gem ceramic, at the Philadelphia Museum of Art Craft Show, held November 11-14 in Philadelphia.


The ceramic jewelry can be created in several colors—although white, black and pink seemed to be dominant colors at the show. The ceramic is paired with more traditional jewelry materials, such as precious metals, diamonds and pearls. And he can create custom pieces. With the high-cost of gold, Perret said his ability to work with the material may have come at opportune time.


“I had no idea when I started this that gold was going to end up at $1,400 an ounce, so the timing seems right because you can make a ring or bracelet with some volume and still keep the price affordable,” he said.

Photographs of his ceramic pieces can be found here.

Below is a video of Perret at the craft show explaining his work with ceramic and showing pieces from his collection.

Saturday, November 13, 2010

Harry Winston CEO Explains the Luxury Rush to China


A voracious appetite for consumer goods, youthful exuberance and sheer numbers are the main reasons why luxury companies are flocking to China, Frederic de Narp told a group of luxury marketers in New York.

“Everybody talks about China, China, why China?” Harry Winston’s president and CEO said to members of the Luxury Marketing Council Wednesday night. “They spend more than anybody else and they are younger than everybody else.”

When de Narp mentions affluent consumers, he is talking about what he defines as the “uber-wealthy,” those with about $30 million in liquid assets that Harry Winston targets. He says those with the greatest wealth in China are 15 years younger than their counterparts in the U.S. About 80 percent of the truly wealthy in China are under 45 years old while 70 percent of their counterparts in the U.S. are over 45 years of age.


DeNarp discusses the luxury market

In addition, the number of uber-high-net wealth people is expected to increase dramatically, far more than anywhere else in the world. In ten years, he said China is forecasted to be the number one luxury market in the world. The country is already the top export market for Bordeaux wines in value (according to the Conseil Interprofessionnel du Vin de Bordeaux) and the biggest destination for luxury watches.

“In ten years we expect the uber-high-net wealth population, the people with $24,000 in disposable income, to be multiplied by 12 in ten years—from one to 12 million. That is why everybody’s going to China,” he said.

De Narp was one of three speakers who discussed “Canadian Luxury” at the Conde Nast Building on Times Square. The Toronto-based company is both a diamond miner and luxury retailer. He limited his talk to the worldwide luxury market and the company’s brand and retail strategies.

While the Chinese luxury market is the fastest growing in the world, De Narp said that the luxury market for the uber-high-net wealth population is doing well everywhere.

“It’s booming,” he said. “The brand (Harry Winston) is on fire but luxury is booming around the world.”

In the most recent assessment, the worldwide luxury market is project to grow 9 to 10 percent in 2010.

“I’m talking about true luxury brands,” he said. “There’s a world of confusion among luxury brands and true luxury brands. A luxury brand, to me, represents timeliness and it is a truly a different business model. True luxury brand are doing extremely well—hard luxury, watches and jewelry.”

Among countries, China’s growth for the years is projected to be 10 percent, the rest of Asia 4 percent, North America 12 percent and Europe 6 percent. The Japanese market is projected to fall 1 percent. All of the numbers are far better than what was predicted in the beginning of the year, he said.

While the world’s Gross Domestic Product decreased by 2 percent, the uber-high-net wealth population of approximately 98,000 people with more than $30 million in liquid assets grew by 19.4 percent.

“So there is enormous wealth created around the world and of course Harry Winston being the most exclusive watch maker in the world, gets positioned with the best.”

Among countries with the most billionaires, last year china had 24. This year it has 64 billionaires. “I’m sure there are more than 100 billionaires. This is the power of China,” he said. “But still, America is still the strongest market by far.”

New York has 60 billionaires and there are 27 billionaires in Los Angeles. Among other cities around the world, there are 32 billionaires in London, 15 in Moscow and 28 in Istanbul. “Who would have guessed that,” he said.

Consumer trends differ around the world. In the developed world, people want more simplicity. Young people are looking for products and services that are environmentally and socially responsible.

Three major western trends in Europe and American are exclusivity, durability and heritage. “In Europe I don’t think this is new for anybody,” he said. “Engagement and experience at the point of access is extremely important.”

In china they want visible logos, western brands and the look for novelties.

“Today, nothing is too beautiful for China,” he said. “It’s a matter of only wanting the best. They believe in the value of investing in precious stones.”

Japan, is “losing their passion” for luxury, he said. However, they want niche brands that are not readily available to the general public.

“An exclusive brand with only five salons, not in the malls, not in the department stores,” he said. “We are extremely well-positioned in Japan.”

Friday, November 12, 2010

Affluent Americans Replacing Jewelry and Watches with Leisure


With the difficult recovery, affluent Americans are discovering that the most valued goods, services and experiences are not material, but leisure-oriented pursuits, according to the study of households with an average income of $332,000 and a net worth of $3.3 million. The conclusions suggest that while conspicuous consumption is on the wane, conspicuous leisure may soon be on the rise.

The tastes of the affluent have changed little since 2008, with only the desires for electric/hybrid cars and jewelry dropping significantly, according to the study by the Luxury Institute, a market research firm, and Resonance Consultancy, a branding and communications firm.

“In tough economic times, it's not surprising that wealthy consumers are shying away from more visual displays of wealth such as fine jewelry and watches,” says Milton Pedraza, Luxury Institute CEO. “The good news is that the desirability of philanthropy has held steady. Large gifts are a very public way of communicating status.”

Companies that will benefit by the shift from conspicuous consumption to conspicuous leisure are likely to be high-end resorts, highly-differentiated hotels and experience purveyors from travel and tour curators to leisure outfitters, according to the study, what was done as a partnership with the Resonance Consultancy, which specializes in developing brand strategies.

“Affluent households today consider leisure-oriented pursuits such as exotic vacations, vacation homes, the freedom to work from home and extended time off work to be the most desirable luxuries,” says Chris Fair, president of Resonance Consultancy. “It's a significant change from the past when the most desired luxuries were usually material goods.”

Pandora Q3 Sales Double, Profits Triple


The new darling of the jewelry industry and the investment world, Pandora, said Thursday that sales in the third quarter more than doubled and profit nearly tripled, year-over-year, driven by growth across all regions and jewelry categories, according to media reports.

Total revenues for the Copenhagen-based jewelry company grew by 117 percent year on year to 1.79 billion Danish crowns ($329,100), with 48 percent of total sales from Europe and 41 percent from the U.S. Much of that growth was due to early Christmas orders, the company reportedly said.

Sales of its top product, charms and charms bracelets (which accounted for 79 percent of total sales) increased 94 percent. Despite the high cost of precious metal, sales of silver and gold charms were up 84 percent.

Pandora’s other jewelry sectors, such as its high-end Love Pods collection, has a 345 percent sales increase. The non-charm jewelry lines accounted for 20 percent of revenues in the quarter, up from 10 percent in the same quarter in 2009.

Sales in the U.S. market rose 93 percent, representing 41 percent of total sales. The Asia-Pacific region (which accounts for 11 percent of total sales) grew by 30 percent for the period.

Net profit at Pandora rose 280 percent to 581 million Danish crowns ($106.8 million) in the third quarter. Gross margin at the group in the quarter was 73 percent, up from 66 percent in the third quarter of 2009 when the gross margin was impacted by an unrealized gain on raw materials and a negative one‐off effect from taking over the company’s Australian distributor.

“Our strong performance in the third quarter of 2010 is a result of our continued success in upgrading our existing customers, thereby increasing the share of branded sales as well as roll‐out of new stores around the world—particularly in Italy,” Mikkel Vendelin Olesen, Pandora chief executive, reportedly said. “We have seen continued strong momentum in the revenue development from our charms and silver and gold charm bracelets as well as excellent performance from our other jewelry collections. However, it is important to notice that our Q3 also is positively impacted by early Christmas orders from retailers.”

Pandora had a spectacular debut on the Copenhagen bourse on Oct. 5 with a $2 billion IPO. The company manufactures and distributes mass market jewelry, priced between $50 and $1,500, designed at its Copenhagen headquarters and made in Thailand.

Bulgari 3Q Sales Up 15%, Jewelry Sales Up 14%, Watch Sales Down 11%


Italian luxury jeweler Bulgari SpA said Thursday that third quarter sales increased 15 percent year-over-year to 267.9 million euros ($366.7 million). At constant exchange rates (excluding currency fluctuations and other conditions) sales rose 5 percent for the period, ended Sept. 30.


Net profit for the period increased 138 percent year-over-year to 16.6 million euros ($22.7 million) for the Rome-based company.


Third-quarter jewelry sales rose 13.7 percent year-over-year (24.2% at constant exchange rates) due to the excellent sales performance of its B.zero1 line and the Serpenti collection. Watch sales fell 10.9 percent (down 1.8 percent at constant exchange rates). However, the company said it was not a fair comparison since delivery of new products this year began in September and continued in the three subsequent months, while last year the new launches were available starting in the second quarter. In October, watch sales grew by 6 percent. The company said that the women’s Serpenti watch collection had an “excellent reaction.” The steel version was available in stores in September, followed by the gold version at the end of October. 


The company also said October wholesale sales were greater than what was recorded in directly owned stores, which confirms the recovery of this distribution channel after last year's massive de-stocking. The company noted that the new Bulgari Roth and Genta models unveiled this year in Basel were “remarkably well-received by customers in directly owned stores.”


Perfume sales fell 4.1 percent for the period. (3.5% at constant exchange rates) but began to rise again in October, recording an increase of 5 percent. Accessories sales increased 35.3 percent (54.8 percent at constant exchange rates).


Sales in Europe for the third quarter rose 11 percent year-over-year, with sales in Italy up 24.4 percent. Sales in America fell 7.4 percent. The sales trend in America, however, adjusted to take into account the normal volatility of high-end jewelry, recorded a growth of 6.4 percent. In Asia, Japan sales show continued weakness, down 1.1 percent, while the rest of Asia grew 15.4 percent for the period. In China, sales grew 24.3 percent for the period. Sales in the Middle East and other areas fell 1.5 percent. However, this is an improvement compared to second quarter sales decline of 10.8 percent.


“I am satisfied with the third quarter results—particularly with the excellent performance of jewelry and accessories and the notable improvement in profitability—which are in line with our plans and clearly show that the company is continuing to improve, both in terms of product and image and in terms of investment control, indebtedness, inventory and costs,” said Francesco Trapani, Bulgari Group CEO.

Richemont Sales Up 37%, Jewelry Sales Up 32%, Watch Sales Up 38%

Richemont headquarters

Luxury goods group Cie. Financiere Richemont said Friday that year-over-year sales for the six months of 2010 increased 37 percent to 3.26 billion euros ($4.47 billion). At constant exchange rates (excluding currency fluctuations and other conditions) the increase was 27 percent for the period ended September 30. When removing the company’s recent acquisition of Internet retailer Net-A-Porter.com, sales increased by 22 percent.

The Geneva-based company said the strong growth in sales reflects, in part, low comparative figures in the prior period, when reported Group sales decreased by 15 percent.

Profit for the period rose 87 percent to 644 million euros ($883 million) and operating profit increased by 95 percent.

Its jewelry business (which includes Cartier, Van Cleef & Arpels and Piaget) saw its sales increase 32 percent to 1.69 billion euros ($2.31 billion) for the period. Both Cartier and Van Cleef & Arpels saw double-digit sales growth, Richemont said.

Watch sales (which include Vacheron Constantin, Baume & Mercier, Jaeger-LeCoultre, Lange & Söhne and IWC) rose 38 percent to 901 million euros ($1.23 billion).

Overall Group sales as measured by constant exchange rates increased 37 percent in the Americas, 36 percent in Asia-Pacific, 23 percent in Europe and 4 percent in Japan.

Johann Rupert, Richemont executive chairman and CEO, stressed that the strong sales figures benefited from favorable exchange rates and better economic conditions when compared to the post-recession prior year and cautioned that growth may slow during the second half of the year.

“The good performance achieved by Richemont in the first half of this year has been driven by a marked improvement in all business areas and across all geographies compared to the depressed levels seen last year,” Rupert said. “Richemont’s Maisons were able to benefit fully from this improved trading environment, further enhancing their leading positions in jewelry, watchmaking, writing instruments and accessories. … The robust sales momentum that the Group has seen for several months has continued through to the end of October; sales for the month were 36 per cent above those of October 2009 at actual exchange rates.”

He added, “For the second half of the financial year, we expect the high rate of growth in sales seen in the year to date to slow as a consequence of exchange rate movements and the more challenging prior year comparatives.”

Wednesday, November 10, 2010

Zimbabwe Government Charge Diamond Companies with Fraud

Photo by Tsvangirayi Mukwazhi, AP

The Marange diamond fields in Zimbabwe continue to be a source of controversy and alleged corruption. This time the Zimbabwe government has charged a second mining operation with fraud.

Government officials have charged African Consolidated Resources Plc. with unlawfully acquiring diamond claims in Marange by using subsidiary companies that were unregistered at the time, Reuters and other news agencies reports.

Just last week Zimbabwe police arrested six directors linked to a joint venture firm mining diamonds in Marange, also on allegations of fraudulently acquiring the concession. The arrested executives include five officials from the state-owned Zimbabwe Mining Development Corp. and a Zimbabwean representative of its South African partner, Core Mining and Minerals (link unavailable), in the 50-50 diamond mining joint venture, Canadile Miners.

They were arraigned Tuesday and the court is due to give its ruling on their bail request on Wednesday (today), AFP reports.

And of course, last week, Kimberley Process officials failed to agree on whether to allow Zimbabwe to sell gems from Marange, based on continued allegations of human rights abuses and smuggling.

A story in The Zimbabwean newspaper tries to make sense of all of this.

Rapaport Auction Website for GIA Graded Diamonds

Martin Rapaport
The Rapaport Group has launched the Rapaport Certified Diamond Auction Web site offering continuous ongoing auctions of GIA graded diamonds.

The new platform creates a global marketplace providing a direct link between diamond cutters in the manufacturing centers and diamond buyers worldwide, the company said. It offers a transparent, liquid, cash market designed to attract investors. And it provides an unprecedented opportunity for consumers seeking to obtain fair market value for the diamonds they wish to sell.

“The new Rapaport Certified Diamond Auction platform creates an unprecedented opportunity for the diamond trade to establish and communicate fair market prices as it promotes efficient global trading of fine quality diamonds. Furthermore, it provides an opportunity for consumers and investors to obtain fair market value for the diamonds they wish to sell. This important new initiative supports the development of honest, free, fair, efficient and competitive diamond markets,” Martin Rapaport, Rapaport Group chairman, said in a statement.

Buyers and sellers of GIA graded, excellent to very good cut, Round, 0.50 to 10.00 ct., D-K, IF-VS2 diamonds can participate in the auction by registering at www.rapaport.com/certauctions. Additional information is available through Rapaport Auction Support at email auctions@rapaport.com or telephone +1-702-893-9400.

The Rapaport Group operates in compliance with the U.S. Patriot Act and OFAC regulations and does not trade in diamonds from Marange, Zimbabwe.

LJ International Revenues Up 36%


LJ International Inc. on Tuesday reported a 36 percent year-over-year increase in revenues for the third quarter ended September 30. Sales and income growth reflected an 83 percent rise in sales at LJI's ENZO retail chain of jewelry stores in China.

The Hong Kong based company makes gold, platinum, and sterling silver jewelry set with diamonds and precious and semi-precious stones at its plant in Shenzhen, China. It markets its jewelry primarily under the Lorenzo brand name to retailers in Europe and North America. It also sells jewelry through fine jewelers, discount chains, department stores, television shopping channels, and in about 100 of its own ENZO retail stores in China, Hong Kong, and Macau.

The company said it expects fourth quarter 2010 sales for ENZO to increase 40 percent year-over-year, offsetting an approximately 15 percent decrease in wholesale revenues.

"Today's results clearly demonstrate how our retail-based growth strategy is succeeding as planned," said Yu Chuan Yih, LJI's chairman and CEO. "Our ENZO division is the primary driver of both sales growth and margin improvements at all levels, from gross to net profit. Retail sales also are rising not just from the opening of new stores but from significantly higher sales on per-store basis. With new financing in place to fund at least 60 new ENZO stores in 2011, LJI is on track to take advantage of continuing economic growth in China while holding its own as a leading jewelry wholesaler in slower-growing global markets."

LJI's company-wide revenues for the third quarter rose 36 percent year-over-year to $35.7 million. Retail revenues were up 83 percent to $21.1 million. Same store retail sales rose 13 percent for the period. Wholesale revenues were down less than 1 percent to $14.6 million.

Rising retail revenues reflected expanded store count (up to 124 at the end of the third quarter from 92 a year earlier) and growing consumer interest in ENZO jewelry lines coupled with the continued rise of disposable income in China's expanding economy.

As in past quarters, gross margins for retail revenues were substantially higher than wholesale. Gross retail profit in the third quarter of 2010 was $10.6 million, or 51 percent of retail revenues. Gross wholesale profit was $3.4 million, or 23 percent of wholesale revenues. Overall gross profit was $14 million, or 39 percent of revenues.

LJI's operating income for the third quarter of 2010 was $3.7 million, or 10 percent of revenues, up 188 percent from $1.3 million, or 5 percent of revenues, a year earlier. The improvement was due both to the sharp rise in higher-margin retail sales along with effective controls on sales, general and administrative expenses, the company said.

Retail operating income was $3.1 million, or 15 percent of retail revenues, up from $1 million, or 8 percent of retail revenues, a year earlier. Wholesale operating income was $1 million, or 7 percent of wholesale revenues, compared to $$500,000, or 4 percent of wholesale revenue, in the third quarter of 2009.

Tuesday, November 9, 2010

Timepiece Tuesday: TW Steel Honors Racer, Omega goes to Court, Hublot iPhone App, London Public Clocks

TW Steel Unveils Emerson Fittipaldi Signature Edition
Amsterdam-based sports watch brand TW Steel has created a timepiece honoring two-time Formula One World Champion, Emerson Fittipaldi. The TW Steel Emerson Fittipaldi timepiece was unveiled prior to the Brazilian Grand Prix, held Nov. 7 in Sao Paulo. The watch, available in 45mm and 48mm editions, was designed in conjunction with the racer, who is celebrating the 40th Anniversary of his first Formula One victory. It is based on the brand’s TECH style collection featuring 316L steel and a Chrono movement that measures time to 1/20th of a second. The timepieces are waterproof to 10 ATM. Incorporating the yellow from Brazil’s national flag, the color is used for the racer’s name on the tachymeter ring, on the watch hands and on the side of the black PVD coated case. The symbolic black and white checkered flag on the watch dial and case back further recognizes Emerson’s racing career, which included 14 Formula One victories and 22 IndyCar wins. 

Omega Faces the Supreme Court
The Swiss luxury watch brand Omega has taken its grievance to the U.S. Supreme Court in a case that could have implications for international trade. At issue is whether a copyright holder can block the re-sale of a foreign-made item, after it is later brought to the United States and sold for up to a third less than it might cost elsewhere, CNN reports. The items are Omega watches, and the seller is Costco, a membership warehouse retailer. Omega alleges Costco unlawfully obtained genuine Seamaster-style watches from third parties who had imported them into the United States. The stores then sold them for $1,299, a third below the Swiss firm's suggested retail price of $1,999. The watches were engraved with the Omega emblem trademarked in the United States.

Hublot Releases iPhone App
Hublot has gotten onboard the iPhone craze with its own application for enthusiasts of the luxury Swiss watch brand. One of the features of this app is an augmented reality section that allows users to take a picture of their wrist and then virtually try on watches from Hublot’s 2010 collection. In addition, there are 360 degree views of the new watches along with specs, a way to virtually build a Hublot watch and a game that requires the user to keep the power reserve full by shaking the iphone.

 The Public Clocks of London
 The Londoner Web site has a pictorial display of the many clocks inside the core of the British city with comments by Don Menard, London's heritage planner.

Philadelphia Museum of Art Craft Show to Host 49 Jewelry Artists


The 34th annual Philadelphia Museum of Art Craft Show opens Thursday at the Pennsylvania Convention Center in Philadelphia. This exhibition and sale of contemporary American craft will host 195 of the best craft artists in the United States, selected from more than 1,300 applicants. A total of 49 jewelry designers and a select group of artists from Germany will be among those exhibiting and selling their work.


Etienne Perret  white gem ceramic band with light pink off-round cultured pearl.

The show offers an opportunity to meet craft artists and to learn about and purchase their work in a variety of forms and functions, including: glass, baskets, jewelry, fiber wearable, metal, paper, leather, furniture, ceramic, wood, mixed media, and fiber decorative works.

A gold bracelet from Judith Kaufman.

Five internationally renowned craft experts served as jurors: Elisabeth Agro, associate curator of American Art, Philadelphia Museum of Art; Michael Monroe, director of Curatorial Affairs, Bellevue Arts Museum, Bellevue, Wash.; Carol Sauvion, executive director, Craft in America, Beverly Hills, Calif.; Professor Rosanne Somerson, Department of Furniture Design, Rhode Island School of Design; Lewis Wexler, Proprietor, Wexler Gallery, Philadelphia.

The group of German craft artists featured in this year’s show was selected in conjunction with the German Crafts Council. The guest artist component was introduced to the Philadelphia Museum of Art Craft Show in 2001. Past guest artist groups include: Korea (2009), Israel (2008), Canada (2007), Finland (2006), Germany (2005), Ireland (2004), Great Britain (2003), First Nation (2002), and Japan (2001).

For the first time in 34 years, the show will feature the work of students from the Savannah College of Art & Design. The show also includes an online auction in which all items were donated.

The event attracts some 25,000 visitors over a four-day period. Funds raised are used to purchase works of art and craft for the museum’s permanent collections, support education programs, and contribute to conservation and publication projects.

Dates and hours for the 2010 Philadelphia Museum of Art Craft Show are: Thursday and Friday 11 a.m.-9 p.m.; Saturday,10 a,m,-6 p,m,, Sunday, 10 a.m.-5 p.m. General admission is $15. Two-day passes are $20. Children under 12 are $5. Tickets may be purchased at the door, or in advance by calling the Craft Show office at (215) 684-7930. Group admission can be arranged for 10 or more by contacting the Craft Show office.

The Pennsylvania Convention Center, the site of the Craft Show, is located at 12th and Arch Streets.

IHT Luxury Conference Publishes 10th Anniversary Magazine


The International Herald Tribune is celebrating the tenth anniversary of its luxury conference series with the publication of a limited edition magazine edited by IHT’s fashion editor and host of the conference Suzy Menkes. The issue was officially released Tuesday at the beginning of the IHT Heritage Luxury Conference in London.
   
Featuring a series of essays by Menkes and commissioned pieces from distinguished fashion writers, the magazine explores how the cultures and economies of the cities that hosted the conferences reflected different aspects of luxury and how that has changed over the years.

Contributors include Bandana Tewari, fashion features director for Vogue India, Fleur Britten, author and editor at The Sunday Times Style Magazine, and former fashion editor of Vogue Russia, Aliona Doletskaya. There are also a number of ‘Luxe Questionnaires’ in which Lady Amanda Harlech, Alber Elbaz and other fashion luminaries reflect on how they interpret luxury today.

The cover of the magazine features an illustration by Karl Lagerfeld, one of this year’s conference speakers.

Designed and produced in collaboration with Paris publishing house Stiletto Editions, the magazine was distributed to delegates at the Heritage Luxury conference at the InterContinental Park Lane in London, which ends Wednesday, as well as to 15,000 luxury professionals, fashion and design schools, and selected hotels.

The IHT luxury conferences series launched in 2001 and has been held in Paris (2001-2003), Hong Kong, Dubai, Istanbul, Moscow, New Delhi and Berlin.

Monday, November 8, 2010

NGOs Demand that Zimbabwe Meets its KP Commitments before Selling Diamonds


Kimberley Process members must ensure that Zimbabwe is following the organization’s commitments before allowing the country to sell diamonds from its Marange diamond fields, KP nongovernmental organization members said.

Global Witness and Partnership Africa Canada, known as the KP Civil Society Coalition, released a statement following four days of closed door meetings, in which KP members couldn’t agree on whether to allow Zimbabwe to sell diamonds from its controversial diamond field, the source of alleged human rights violations.

The KP banned Zimbabwe from selling diamonds from the Marange fields following reports of the killing of more than two hundred miners by the Zimbabwean security forces in late 2008 along with patterns of violence and smuggling. The KP authorized two sales (in August and September) from the controversial source under close supervision despite reports of continued violence at the mine.

The NGOs say they recognize that some progress in terms of technical controls has been made since the initial ban. “However, key commitments made in the Joint Work Plan and a follow up agreement reached in St Petersburg in July—which links exports to progress on the ground and emphasizes the role of Zimbabwean civil society—remain unmet. It is only through implementing these agreements that Zimbabwe will meet Kimberley Process minimum standards and prevent renewed violence in Marange,” the statement read.

“The KP Civil Society Coalition remains committed to playing a constructive role in finding an agreement between the Kimberley Process and Zimbabwe; one which allows all Zimbabwean people to benefit from the country's diamond wealth, while ensuring that human rights are respected and the integrity of the KP scheme is preserved,” the statement continued. “We believe that such an agreement must link exports from Marange with progress in implementing existing commitments and reflect the fundamental KP principle of country—rather than individual mine—certification. The most important of these commitments include:

“• Endorsement and respect for the local civil society monitoring mechanism established by the St Petersburg agreement by which Zimbabwean NGOs report to the KP on conditions in Marange.

“• Measures agreed by Zimbabwe and the Kimberley Process to remove the military from Marange and put in place a system of law enforcement overseen by civilian authorities.

“• Steps to tackle illegal mining and cross border trafficking of diamonds, including the establishment of regulations that allow for small scale mining of diamonds.”

There are rumors that impasse over the Zimbabwe issue may bring down the entire Kimberley Process Certification Scheme, which “imposes extensive requirements on its members to enable them to certify shipments of rough diamonds as ‘conflict-free’ and prevent conflict diamonds from entering the legitimate trade,” according to the KP Web site.

KP certificate

“Under the terms of the KPCS, participating states must meet ‘minimum requirements’ and must put in place national legislation and institutions; export, import and internal controls; and also commit to transparency and the exchange of statistical data. Participants can only legally trade with other participants who have also met the minimum requirements of the scheme, and international shipments of rough diamonds must be accompanied by a KP certificate guaranteeing that they are conflict-free.”

KP member states

The KP has 49 members representing 75 countries with the European Union and member states counting as individual participants, according to the KP Web site. It includes 99.8 percent of the diamond industry, government officials and the World Diamond Council, which represents the international diamond trade. The NGOs participate in what appears to be a less significant role.

The KPCS was first conceived in 2000 and finalized in 2002 in response to the civil war in Sierra Leone. Specifically, the use of diamonds by the Revolutionary United Front to purchase weapons that were used to commit atrocities against civilians that left many thousands dead or mutilated, with unknown numbers of people abducted and tortured.