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Jewels from Goshwara during the Luxury at JCK show in Las Vegas.

Well I'm back as I have been taking care of business and personal items as well as just getting organized and back to a schedule since returning from Las Vegas Jewelry Week. I have lots to report from the well attended jewelry shows in Vegas. Creativity was in full view throughout the shows and buyers were enthusiastic and positive with what they saw. In the coming weeks you will notice changes to Jewelry News Network. In particular you will see it even become more focused on new product, but there will still be room for business trends and important issues that effect the industry. So be patient as a flood of new stories begins. And as always, thank you for your support.

Hublot Opens First Boutique in Japan

From left: Emmanuel Prat, president of Hublot Japan and LVMH Japan, Ricardo Guadalupe, Hublot managing director, Sumo wrestler Sho Hakuho, Jean-Claude Biver, Hublot CEO, and Harumi Torii, founder of a non-profit organization Kids Earth Fund at the June 2 opening of Hublot boutique in Tokyo. Biver is holding the King Power Red Devil that will be auctioned off to support children suffering from the recent Tohoku earthquake.

Hublot celebrated the opening of its flagship boutique on Namiki Street in Tokyo’s Ginza shopping district with a special unveiling of the FIFA Winner’s Trophy for 2014 FIFA World Cup Brazil and efforts to help children affected by the Japanese earthquake and tsunami. The event was attended by local celebrities and top Hublot officials. It is the Swiss luxury watch brand’s first boutique in Japan.

The boutique, designed by New York architect Peter Marino, carries the same concept as the Hublot boutiques in Place Vendôme, Paris (opened in December 2010) and Madison Avenue, New York (opened in February 2011). Marino introduced materials such as bronze, natural buckskin and ebony to convey a warm yet tranquil atmosphere. The Ginza boutique is the only location in Japan to offer the Hublot Vendome Collection.
 
Guests for the celebration included Sumo wrestler Sho Hakuho, soccer goalkeeper Seigo Narazaki and Harumi Torii, founder of a non-profit organization Kids Earth Fund. Hublot CEO Jean-Claude Biver, attended the event with Ricardo Guadalupe, Hublot managing director, and Emmanuel Prat, president of Hublot Japan and LVMH Japan.

Through a strong relationship with FIFA as the tournament’s Official Watchmaker and Official Timekeeper, Hublot was able to bring the FIFA Winner’s Trophy for 2014 FIFA World Cup Brazil to the event. It was the first public release of the trophy in Japan.

At a charity gala dinner to support the Kids Earth Fund, Hublot announced the donation of 10,000 sets of Swiss Caran d’Ache colored pencils for children affected by the tsunami. They are used by children in drawing workshops to help them express themselves.

As a special feature of the event, Hublot announced that the King Power Red Devil – limited number “000 of 500” timepieces will be presented for an online auction to raise funds for children in despair, beginning June 23. Registration will begin Friday (June 10) through the Hublot website, http://www.hublot.com.

Just after the chaos caused by Tohoku Earthquake on March 11, Hublot launched “Commitment for Japan, You and Hublot for Japan” campaign on its website to raise funds via Red Cross Society for support. The company soon became involved with the Kids Earth Fund, which works to help children worldwide who suffered through disasters.

Harry Winston Q1 Consolidated Sales Up 26%

Harry Winston salon in Paris

Harry Winston Diamond Corp. seems to have the best of both worlds with its businesses in diamond mining sector and as a luxury jewelry and watch retailer. Both market segments have shown strong growth over the past year and this is continuing as the Toronto-based company reported Wednesday that consolidated sales increased 26 percent for the first quarter of fiscal year 2012. The increase at constant exchange rates was 22 percent.

Luxury brand sales, through its network of salons that sell luxury jewelry and watches in key cities throughout the world, increased 26 percent to $81.9 million for the quarter, ended April 30, primarily driven by stronger high jewelry sales in the United States and higher timepiece sales. The increase at constant exchange rates was 20 percent.

In addition, Harry Winston, which supplies rough diamonds to the global market from its 40 percent ownership interest in the Diavik Diamond Mine in Northwestern Canada, said mining sales increased 27 percent to $62 million, primarily due to higher rough diamond pricing versus the comparable prior year period. Rough diamond output, for the period ended March 31, dropped to 500,000 carats compared to 600,000 carats for the same period last year.

“This quarter's results reflect improving rough diamond prices combined with increasing sales and profit for the luxury brand segment. Both sides of our diamond business are performing well as we continue to achieve premium rough diamond prices and execute our luxury brand strategy,” said Robert Gannicott, Harry Winston Chairman and CEO.

To shore up its stockpile of polished diamonds it uses for luxury jewelry lines and to maximize the continued rise in prices for what many believe is a dwindling resource; Harry Winston in May announced that it is involved in the establishment a polished diamond investment fund. The fund is being managed by Diamond Asset Advisors AG, a Zurich based advisor with a background in both the diamond and financial services sectors. The fund will be structured as a limited partnership, of up to $250 million, offering institutional investors direct exposure to the wholesale market price of polished diamonds.

“Our recently announced relationship with Diamond Asset Advisors in the creation of a polished diamond acquisition fund represents an innovative way for the company to support its luxury brand growth objectives,” Gannicott said.

Other first quarter highlights, include:

* Consolidated EBITDA (earnings before interest taxes depreciation and amortization) in the first quarter of Fiscal 2012 increased 51 percent to $25 million, showing strength in both segments of the business, the company said. In the same period, the mining segment EBITDA increased 48.5 percent to $17.6 million and the luxury brand segment EBITDA increased 57.3 percent to $7.3 million.

* Consolidated operating profit was $4.7 million or double the operating profit of $2.3 million from a year ago, with mining operating profits down $300,000 and luxury brand profits up $2.7 million versus the prior year. Operating profit benefited from higher rough diamond prices and higher high-end jewelry and timepiece sales, the company said.
 
* Consolidated net profit attributable to shareholders for the first quarter was $3.6 million or $0.04 per share compared to net profit attributable to shareholders of $2.1 million or $0.03 per share in the comparable quarter of the prior year.

Miss Earth Nicole Faria is Frédérique Constant’s New Brand Ambassador

Swiss watch brand Frédérique Constant went to India to sign its newest global brand ambassador, Miss Earth Nicole Faria.

The beauty queen is more than just a pretty face. She is a strong conservationist and environmentalist actively involved with earth-related initiatives. The Geneva-based watch brand recently announced this partnership in Mumbai where it presented Faria a special Chocolate Double Heart Beat watch to commence their association.

Frédérique Constant Chocolate Double Heart Beat watch

“I was amazed to hear of the fact that Frédérique Constant is a rare brand that supports earth-related initiatives,” Faria said. “I strongly believe that this earth is a legacy that we need to pass on to future generations and the time to act is now. Similarly Frédérique Constant is a brand that one would like to pass on to Gen-Next as a legacy. From the fashionista point of view, its classical styles is exactly what the Indian customer requires today.”

Originally from Bangalore, Faria is passionate about modeling and improving the world. Some of her more memorable moments were when she won the Miss India crown in 2010 and later the Miss Earth title. Her hobbies include listening to music, dancing, reading and visiting orphanages.

“In India, we decided to do something daringly different,” said Sebastien Cretegny, International Sales Manager, Frédérique Constant, said. “When we met Miss Earth Nicole Faria, we felt that there was a sharing of passion, especially when she spoke about her conservation projects. I am proud to announce that this is the first time that Frédérique Constant has associated with a beauty pageant icon anywhere in the world and it happened in India.”

Richline Group Acquires Three Italian Brands

The Richline Group jewelry company has bought three privately held Italian jewelry brands for undisclosed amounts, Reuters reports.

Richline, headquartered in Mount Vernon, N.Y., and Tamarac, Fla., bought the rights to children’s jewelry maker Erz, earrings and bracelets maker Farinex and 7AR, a part of the Rosato jewelry group, based in Arezzo and Milan, Italy, according to the report.

“This is another important and strategic addition to our expansion into the international arena,” Dennis Ulrich, chief executive officer of Richline Group, reportedly said in a statement.

Richline Group announced in January it would buy privately owned Italian jewelry manufacturer Rosato, known for its gold and enamel charms. Instead, Richline opted to buy the 7AR brand, a branch of Rosato, Reuters reports.

Richline Group, a wholly-owned subsidiary of Berkshire Hathaway Inc., was formed in 2007 and includes such brands as Andin, Alarama, Aurafin, Auragem and Bel-Oro.

Is the Kimberley Process Dead? Does Anybody Know or Care?

A miner holds the fruit of his labor at the Marange mine.

While the international jewelry industry was meeting in Las Vegas this week, the big news was coming out of Africa as the Voice of America and other publications reported that the Kimberley Process Certification Scheme is in “turmoil” after South Africa announced that it will purchase diamonds mined at the controversial Marange diamond field in Zimbabwe.

A spokesman for South African Mineral Resources Minister Susan Shabangu, said the country’s position is the same as that of Kimberly Process Chairman Matthieu Yamba, who issued a statement in January saying Zimbabwe can freely sell its diamonds from Marange, even though there was never a consensus among Kimberley Process members.

Meanwhile, the World Federation of Diamond Bourses, which protects the interests of the world’s diamond bourses, held a dog-and-pony show at the JCK Las Vegas jewelry trade show last week. I didn’t bother to attend, opting instead to keep scheduled appointments with jewelry manufacturers and designers who were actually doing something relevant. Prior to its event, the WFDB stated that it supports the exports of diamonds from Marange.

Again a little backtracking is needed. Please forgive me if you read this before. The Kimberley Process is an international organization made up of diamond industry representatives, government officials from 75 countries and non-governmental organizations. It is charged with preventing trade in illicit diamonds—commonly called “blood” or “conflict” diamonds, depending on whether you have a vested interested in the diamond industry. Illicit diamonds under the organization’s mandate are the result of diamonds being used to fund brutal civil wars where innocent people are being killed and mutilated by those involved in these conflicts.

The Kimberley Process Certification Scheme imposes extensive requirements on its members to enable them to certify shipments of rough diamonds as “conflict-free.”

I’ve been wondering what the KP does besides hold closed-door meetings, which to me is its biggest failure. How can an organization that exists primarily to ensure consumers that its products have been mined through legal means and without human rights abuses can provide that assurance while meeting in private. In fact, the KP does such a poor job of communicating with consumers that I would doubt that one in 20 jewelry shoppers know what the hell a “Kimberley Process” is, much less what it does.

The Marange diamond field, which many say contain the largest deposit of diamonds in the world, has been the scene of murders and other human rights abuses by Robert Mugabe’s government and its military. The Zimbabwe government say those abuses have stopped but human rights advocates say they continue; that money from mines is being used to finance the ruling party’s operations, including upcoming elections; and diamond smuggling is rampant. However, the country is not involved in a civil war, therefore under the KP’s mandate, Zimbabwe’s government and its allies believe they can sell its diamonds. Expanding that mandate to include human rights abuses not funded by civil war is one of the sticking points.

The human rights abuses eventually led the Kimberley Process to suspend buying diamonds from Marange. The KP voted to reinstate Zimbabwe in July, 2010, allowing two supervised exports of rough diamond from the Marange production in August and September. The date of the second sale was changed and the sale was held without public knowledge.

The issue of reinstating Zimbabwe into the KP Certification Process was the main item on the agenda when the organization met in November, 2010 in Jerusalem. After four days of closed door meetings (of course), participants failed to reach a conclusion. The issue is still unresolved with communications being issued only among KP participants and no information being presented to the public, unless it is leaked.

For its part, Zimbabwe government officials insist that it received approval to sell diamonds from Marange through the KP certification scheme. In addition, it has made statements that if the organization refuses to allow it to sell its diamonds it will do so anyway, possibly flooding the market with diamonds and reducing their value.

Meanwhile, a variety of organizations have already either banned its members from dealing in diamonds from Marange or have encouraged their members not to do so, including the Responsible Jewellery Council, RapNet, and MasterCut and the Company of Masters Jewellers in the U.K.

Now that South Africa will reportedly buy diamonds from Marange, there is no doubt in my mind and others that India and China will follow. So the market will either be flooded with diamonds that are not KP certified, or the KP will cave to the pressure and certify the diamonds. The first scenario should create a quick end to the KP while the second scenario will probably lead to a much slower demise.

In the end I wonder if it matters, since the general public has no idea that this organization ever existed in the first place.

First Look at New Royal Asscher Heritage Jewelry

Royal Asscher Diamond Company, the Holland-based firm that has been the jeweler to royalty throughout its 157-year history, earned its first Royal Title from the Dutch monarchy in 1980. That title was renewed in February and in its honor the company introduced two new rings.

Mike and Lita Asscher, representing the sixth generation of the family owned company, were on hand at Luxury at JCK jewelry trade show Wednesday to unveil the new creations.

The first is part of the company’s Stars of Africa collection, in which proceeds from the sales will go toward infrastructure, healthcare and education for children from African countries where diamonds are mined.

The 18k gold rings are plated with palladium to better enhance its white color. It incorporates the same clear half-sphere made of sapphire crystal filled with small diamonds that is the signature of the collection since it was introduced two years ago. The crystal half shells are filled with a clear silicone, which allow the tiny diamonds to float inside the ring as it is moves. In this case the diamonds are orange, representing the color of Holland. But as light hits the ring, the diamonds also take on a golden glow. The edge of the ring is lined with white diamonds and the side features the Royal Asscher crown logo.

The second piece is the Legacy vintage-inspired engagement ring, first mentioned last week on the Jewelry News Network, designed by Toronto-based jewelry designer Reena Ahluwalia. A signature Asscher cut diamond serves as the center stone of the platinum wave-like ring with smaller diamonds of different cuts detailing each side of the ring.