De Beers Plans Biggest Global Ad Spend Since 2008

The De Beers Group said Tuesday it will invest more than $140 million in marketing this year—its biggest ad spend since 2008.

The increased investment will be focused on generating further consumer demand for diamond jewelry in the leading markets globally, with the greatest spend targeted in the world’s three largest markets for diamond jewels: the U.S., China and India.

The majority of the advertising budget will support De Beers’ proprietary brands, Forevermark and De Beers Diamond Jewellers. However, the diamond mining and marketing giant said it also will increase its spend on partnership marketing, including with the Diamond Producers Association and India’s Gem and Jewellery Export Promotion Council.

“Total consumer expenditure on diamond jewelry for the last five years collectively has been the highest on record—and the outlook is positive,” said Stephen Lussier, De Beers Group’s executive VP of Marketing and CEO of Forevermark. “However, we cannot take future growth for granted.”

Lussier added, “Increasing our spend from a strong position will help support continued demand in both mature and developing markets, particularly among millennials, who are already the largest group of diamond consumers despite this generation not having yet reached its maximum earning potential.” 

The De Beers statement was short on details, such as when the ad and marketing push will begin and what media is being targeted.

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Gemfields Biggest Shareholder Makes Unsolicited Offer For Remaining Shares

Emerald and diamond necklace by Carolina Bucci using Gemfields Zambian emeralds 

Private equity company, Pallinghurst Resources, has made an unsolicited offer for the 53% of shares in Gemfields it does not already own. 

Pallinghurst, based in South Africa, specializes in investments in the mining sector. It is offering approximately $150 million in its shares for the remaining stake in Gemfields, a London-based colored gemstone mining and marketing company, making it a core component of Pallinghurst’s value. 

Pallinghurst’s offer doesn’t provide any added value to Gemfields, which it values at approximately $295 million.

Gemfields Board, in a statement to shareholders, “strongly advises … to take no action at this time.” However, Gemfields shareholders owning 28% of the company had already agreed to the offer, Pallinghurst says, giving it 75 percent backing and making the offer unconditional. 

Gemfields in its current form was created in 2008 when Pallinghurst and its co-investors contributed the Kagem emerald mine to Gemfields, its core operating asset, for shares. This transaction made Pallinghurst and its co-investors the majority shareholders of Gemfields. In 2013, Pallinghurst added the luxury brand, Fabergé, to Gemfields holdings, increasing Pallinghurst group’s direct ownership in Gemfields to the current level of 47.09%.

The strategy from the beginning was for Gemfields to become the “De Beers of the Colored Gemstone Industry” by creating a mine-to-market strategy for its responsibly sourced gems that could be traced throughout the supply chain and communicated to the industry and consumers. Part of this communication involves creating a grading system for determining emerald quality. 

Pallinghurst contends that Gemfields is “an attractive and unique business” but in its current structure is constrained by limited access to equity and debt capital, low share liquidity and high costs.

“Pallinghurst believes that, since its investment, the performance of the Gemfields share price has been disappointing and despite the major positive developments, Gemfields’ shareholders, including Pallinghurst, have not benefited appropriately,” Pallinghurst said in a statement. “The share price of Gemfields has not increased over the last decade.” 

Gemfields key holdings are: 

* 75% of the Kagem emerald mine in Zambia; 
* 75% of the Montepuez ruby mine in Mozambique; 
* 50% of the Kariba amethyst mine in Zambia; and 
* 100% of Fabergé Limited. 

Once gaining full control of Gemfields, Pallinghurst will delist Gemfields from the Alternative Investment Market (AIM), a sub-market of the London Stock Exchange for smaller, less-viable companies, and take it private, at least for the time being. Pallinghurst is listed on the Johannesburg Stock Exchange (JSE) and the Bermuda Stock Exchange (BSX) and it said it would consider listing Gemfields on the LSE.

Pallinghurst, in order to create profitability for Gemfields, said it would do the following: 

* Focus on Gemfields’ core emerald and ruby operations in Zambia and Mozambique, respectively, and develop these to optimal scale;
* Accelerate the development of its existing portfolio of projects to mitigate the dependency on its attractive, but cyclical assets;
* Explore strategic alternatives for Fabergé, where significant growth capital is still required to reach its full potential; and
* Pursue cost reductions across the enlarged group.

Gemfields sells its rough gems through international auctions, which Pallinghurst says has “brought a level of professionalism and transparency previously not seen in the industry.” With its proprietary grading system for gems, Gemfields developed three auction classes, one offering higher quality gemstones, one for the larger volume of lower quality gemstones and the last offering mixed quality gemstones.

Pallinghurst said acquiring all of Gemfields would allow it to collapse its investment structure and simplify its management arrangements.

“The result will be a renewed Pallinghurst with a simplified operating model and an in-house management team,” Pallinghurst said in a statement. “The value of the underlying assets will be more clearly demonstrable with clearer earnings and operating metrics that can be benchmarked against industry peers. The revised structure model will allow Pallinghurst to rationalize costs across the group by simplifying the group's structures.”

The statement continued, “Post completion … Pallinghurst expects to have an enlarged market capitalization, improved trading liquidity and equity broker coverage. The board of directors of Pallinghurst believes that the combination of these factors should be value accretive for all shareholders.” 

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Rihanna Teams With Chopard For New Jewelry Collection

Rihanna, who has worked with Chopard for the past few years, has now extended this relationship to produce a new line of jewelry with the luxury brand. Known as “Rihanna ♥ Chopard,” it consists of high jewelry pieces and limited collection of jewels made with “Fairmined” gold.

The luxury brand released two images of the Rihanna ♥ Chopard Haute Joaillerie Collection that will be officially be unveiled May 2017 to commemorate the 70th anniversary of the Festival de Cannes red carpet and celebrate Chopard’s 20th year as the official partner of the Cannes Film Festival. They are a one-of-a-kind floral inspired multi-colored chandelier earrings and marquise-cut diamond solitaire ring.

Earrings in 18k white gold and titanium set with blue, pink and yellow sapphires, tsavorites, rubellites, green beryls, aquamarines, Paraiba tourmalines, rubies, amethysts, topazs, lazulites and diamonds.

The world-renowned signer and fashion icon did provide a discreet look at the two new pieces. At the recent Grammy Awards, she wore the floral earrings and on the March 2017 cover of Harper’s Bazaar, she wore the transformable diamond earrings. Chopard said the high jewelry collection is inspired by Rihanna’s island roots—the lush gardens of Barbados and the bright colors of Carnival.

Earrings in 18k white ethical gold certified ‘Fairmined’ featuring four pear-shaped diamonds (9.7cts) and set with brilliant-cut (5.2cts), pear-shaped (4.7cts), oval-cut and marquise-cut diamonds. All diamonds are sourced from a producer who is a RJC certified member.

The second collection is the limited edition Rihanna ♥ Chopard Joaillerie Collection is defined by minimalist geometry and sharp, clean lines. It is based on Chopard’s classic Ice Cube shape with a mix what the luxury brand describes as “a synergy of urban modernism and pure design.”

Linear rectangular motifs link frosty rose gold cubes with solid ceramic blocks in a color personally selected by Rihanna and named “Jungle Green.” Crafted from ethical 18k Fairmined rose gold, the nine-piece capsule collection will be available with icy polished or diamond set gold cubes. Fairmined is an assurance label that certifies gold from empowered responsible artisanal and small-scale mining organizations who meet world leading standards for responsible practices.

The collection’s unveiling today coincides with the release of a global advertising campaign featuring Rihanna. Pieces will be available in June with pre-orders online at www.chopard.com/us/rihanna-loves-chopard and Chopard boutiques starting today.

Necklace in 18k rose ethical gold certified Fairmined and green ceramic.

To create the collection, Rihanna teamed with Caroline Scheufele, Chopard co-president and creative director.

Rihanna in recent years has worn Chopard jewels on red carpets at major events so the two described this collaboration as natural.

“I have always been in love with Chopard’s exquisite jewelry, so to actually design collections with them is something I still can't believe,” Rihanna said in a statement.

“Rihanna and I collaborated closely on the collections so you can feel her unstoppable energy, strong creativity, and inherent sense of design in every piece,” Scheufele added. “With her unique style, she redefines the way people see and wear jewelry.” 

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Baselworld Officials Defiant After Losing 200 Exhibitors

Entering Baselworld 2016 on opening day. Photo by Anthony DeMarco

Officials said Wednesday they “turned away” exhibitors at the 2017 edition of Baselworld, set to open tomorrow, as the show is focusing “quality over quantity.” 

“We decided to turn away exhibitors this year. It’s our choice. It’s our choice,” said a defiant Sylvie Ritter managing director of Baselworld, during the annual preopening press conference. The world’s largest watch and jewelry fair opens Thursday and runs till March 30. 

This quality over quantity theme was repeated by the four speakers who took a unified stance against criticism the show has received from many jewelry and watch exhibitors based on price increases, demands to acquire more space and a decline in buyers. The show itself has seen a decline in exhibitors the past few years. 

This stance went to an absurd level when François Thiébaud, president of the Baselworld Swiss Exhibitors Committee, rehashing the decline in Swiss watch exports (9.9 percent year-over-year), said at one point, “We don’t want to produce that many watches we want to produce quality watches.”

This year's fair has a year-over-year decline in exhibitors of 13.3 percent, from 1,500 to 1,300, Ritter said. This follows two consecutive years of 3 percent declines in exhibitors and buyers.

Eric Bertrand, president of the Baselworld Exhibitors’ Committee, leveled the harshest criticism toward those exhibitors who have left or were forced out (depending on who you talk to). 

“In the past I have been surprised by the popularity of certain brands, some quite famous, but really unrelated to our watchmaking industry,” he said. “And when the winds start to blow harshly so does reality become harsh. We have observed that some brands have had to backtrack while those who have always focused on their knowhow are still around.”

He added, “This market consolidation—even in watchmaking, even in jewelry making—will be a benefit to the entire industry the day economic recovery is fully primed. The recovery will afford the best prepared players to gain market share and to be even more successful than ever before.”

After some pointed questions from journalists (a welcomed change) Ritter said the brands that are no longer at Baselworld failed to meet a criteria that she refused to specify. 

“We have turned away exhibitors who are not in line with our concept and do not meet the criteria for Baselworld. We do not publish this (criterion). They differ depending on the product and the markets.”

It seems a bit remarkable at a time when the luxury market has been democratized through digital media, more access to world travel and brands owned by conglomerates looking for endless growth through the mass market, that Baselworld officials seem to be touting a call for old-world exclusivity. 

But really the claim isn’t believable. If it is, they should look at the conglomerate-owned watch and jewelry brands who were willing to pay huge increases for prime real estate in Hall 1.0 and which Baselworld officials were more than happy to accept. These increases spread to the rest of the halls which led to smaller watch and jewelry brands being priced out of the fair. 

In addition, when Baselworld went on this luxury strategy following a renovation a few years ago, the market was led by a boom in China that has largely leveled off. Now with a myriad of geopolitical and economic challenges throughout the world, consumers are not buying like they used to. 

It seems obvious to me the only criteria that matters is money. 

Bertrand singled out fashion watch brands as those who failed to meet this mysterious criteria. 

“The reason is and you must have read about it and know a certain number of brands that are fashion related took watches to get into the industry and they treat it like an accessory … like glasses and spectacles and other components (it) becomes an element (that) adds value to the image but are not related to our industry,” he said. “Now I believe these people did not obtain the results they planned and have given up producing such products.”

One former exhibitor that went public with criticisms of Baselworld and publicly left was the Timex Group Swiss Luxury Division, a division of the Timex Group, which manages the watch business for luxury fashion brands Salvatore Ferragamo, Versace, Versus and Nautica.

Paolo Marai, president and CEO said in a recent Jewelry News Network story, the $3 million investment into the show could be better spent in other areas of its global business. The four brands occupied Hall 1.1, the second floor of the hall dedicated to “global” watch and jewelry brands.

The watches are made in Lugano, Switzerland, in line with "Swiss Made" quality standards. 

Another high profile company that left Baselworld (or didn’t meet the “criteria”) was Bremont, which had the largest space in a separate area for independent watch brands, known as “The Palace.” 

The Palace is no more; instead it is replaced by a new area called, “Les Ateliers,” in Hall 1.2, described by Baselworld as the place for “the most successful” independent watch brands. Bertrand and the others treated the change as an accomplishment rather than a symbol of the fair’s decline, which others have argued. 

Despite the controversies of the past year, Ritter’s defiance was clear with her last statement at the press conference.

“I went through the halls last evening and I can tell you that I slept very well.” 

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IGI Says New Radio Campaign Targets Millennials, Will They Listen?

Who knew those Krazy Hep Kat Millennials listen to those Boss Jocks on terrestrial radio? 

That’s what the International Gemological Institute is banking on as it has teamed with iHeartMedia radio network to air five radio spots in select markets—“each aimed at enlightening Millennials on the importance of consumer awareness and confidence.” The problem is I doubt that the medium or the message is geared toward this demographic. 

The radio spots will run from September 6 through December 31 during the busy morning and evening drive times with the potential to reach 245 million monthly listeners, IGI said in a statement. 

But do Millennials really listen to terrestrial radio? IGI says yes and it has industry stats to back this. A spokesperson for the organization sent me the following statement. 

“Contrary to what many think, iHeartMedia, radio is still the number 1 listening source/medium for Millennials,” according to the statement. “It reaches 92 percent of this population on a monthly basis and 77 percent of Millennials say they want radio ads to tell them about specific offers. Specifically, iHeartMedia offers a variety of content that attracts 90 percent of Millennials every month. Of note, all of these stats were sourced from third party research companies such as Nielsen, Scarborough, Triton and ComScore/ Arbitron.”

I found some of the Nielsen data and you can view it here. According to Nielsen, Millennials listen to terrestrial radio 11 hours and 26 minutes per day, which may sound impressive at first glance but is actually less than their Generation Xers and Baby Boomer counterparts.

Neilsen’s data also shows that Millennials is the largest segment of radio listeners. However, that is largely because Millennials is the largest demographic group, compared with Generation Xers and Baby Boomers. 

One interesting note is that the “Country format” (country music and its related American-born music) is the most popular among Millennials. Another thing is that it appears that Millennials, like most people, listen to the radio primarily while in their cars. 

So why am I not convinced? The stats are pretty vague and radio audience statistics always involve a certain level of voodoo. It’s all about reach, or more specifically potential reach. It doesn’t measure actual listeners or impact. It doesn’t measure whether active listening is involved or if it’s just background. That’s because it's impossible to measure these things. 

There’s another reason I’m not convinced—the ad itself—which you can listen to here, thanks to Gretchen Friedrich, JNN’s social media manager. 

IGI says the spots “emphasize educating consumers on the need for independently authenticated and evaluated diamonds and gemstones, ultimately providing assurance they are truly getting what they are paying for—which is top-of-mind for cost-conscious Millennials. The ads also offer jewelry care tips and information on birthstones.” 

Other than mentioning Millennials in the press release (which I included below) there is nothing in the ad itself that targets this demographic. It’s a mass market ad for a mass market medium. Millennials are not the only cost-conscious consumers. They are not the only demographic that wants assurances “they are truly getting what they are paying for.” 

There’s nothing wrong with mass media advertising but why pretend the ad campaign and the medium target a certain demographic when it’s obvious it doesn’t? 

If IGI wants to target Millennials then IGI should create a targeted ad and marketing campaign. 


IGI press release:

IGI TO AIR NATIONAL CONSUMER RADIO CAMPAIGN

Institute’s Initiative to Target Millennials


NEW YORK – On the heels of its successful consumer cable campaign, the International Gemological Institute (IGI) will air five radio spots in select markets on iHeartMedia – each aimed at enlightening millennials on the importance of consumer awareness and confidence.

The radio spots will run Sept. 6 through Dec. 31 during busy morning and evening drive times. iHeartMedia reaches over 245 million monthly listeners.

The IGI spots emphasize educating consumers on the need for independently authenticated and evaluated diamonds and gemstones, ultimately providing assurance they are truly getting what they are paying for – which is top-of-mind for cost-conscious millennials. The ads also offer jewelry care tips and information on birthstones.

“Our consumer-focused advertising initiatives continue to highlight the importance of confidence and, specifically, that IGI is an authoritative resource when purchasing diamonds and fine jewelry,” said IGI President Jerry Ehrenwald, G.G., A.S.A. “Building that assurance is essential for both consumers and retailers.”


To listen to an IGI spot that will air on iHeartMedia, click this link.

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Audemars Piguet, Swarovski and Gemfields Woo Art Lovers At Art Basel Miami Beach

An aerial view of the “Curiosity” exhibit, commissioned by Audemars Piguet for Art Basel Miami Beach.

Luxury brands like to be where the wealthy mingle which leads them to support events like the recently concluded Art Basel Miami Beach. Among the companies jockeying for a marketing advantage by associating with the finest works in modern and contemporary art were Swiss luxury watch manufacturer, Audemars Piguet, luxury crystal manufacturer, Swarovski and colored gemstone, mining and marketing company, Gemfields.

A closer view of the “Curiosity” installation. Photo credit: Anthony DeMarco

Audemars Piguet has been out front in its support of Art Basel. In May, the company announced that it has signed on as a “Global Associate Partner” with its three fairs in Basel, Switzerland, Miami Beach and Hong Kong.

A close look at the "snow" covering the chalet and the drawing of the wood grain. Photo credit: Anthony DeMarco

In Miami, the company partnered with contemporary Parisian art gallery Galerie Perrotin by presenting a new site-specific work by French artist duo Kolkoz. The installation, titled “Curiosity,” came in the form of floating snow covered Swiss Chalet placed off the pier of the Miami Marine Stadium on Virginia Key.

The graffiti-filled site has been closed for more than 20 years and at first glance didn’t seem like a suitable place for an art installation befitting a luxury watch brand. However, it turns out that was one of the reasons the site on nearby Virginia Key was chosen. The other was the water and the heat of a typical South Florida day, which also contrasts with the snowy winter scene. The “snow-covered” chalet and pier from a distance appears to just pop up out of the water. Up close it’s easy to see that the pier is covered in a white fabric while the “chalet” is an inflatable house similar to an inflatable play station for children.

Clever and playful, this installation provides a proper setting in a number of ways. It alludes to Audemars Piguet’s wintry home in the Vallée du Joux and it gives focus to the marine stadium. The stadium, which was forced to shut down following the destruction of Hurricane Andrew in 1992, is being slated for a complete renovation.

The watch brand also had a large display of its watches in the Art Basel Miami beach “Collectors’ Lounge,” which included a retrospective of its Royal Oak watch.

An art collaboration with Brazilian architect and designer Guilherme Torres and Swarovski Crystal Palace.

In the contemporary art world South America is hot and Brazil is the epicenter of this hotness. Taking advantage of this, Swarovski Crystal Palace—a program created by the crystal company where it collaborates with artists, architects and designers to create works of art with Swarovski crystal components—teamed with Brazilian architect Guilherme Torres to create the roots of a Mangrove tree in an installation titled “Mangue Groove” that focuses on conservation for Design Miami, a contemporary art show held alongside Art Basel Miami Beach.

The installation takes the form of an abstract diagram that describes the division of spaces into cells with corresponding focal points, combined with the mangrove-root imagery. The artwork used design angled structures of acrylic tubes filled with amber-colored Swarovski crystals and illuminated from within by LEDs. The metal joints of the structures are covered with dodecahedron-shaped wooden caps. These “root” structures, which Torres wanted to look “as if they were made of crystals,” are set into shallow pools of water, against a backdrop of projections of an Amazonian sunset.

Torres used the 2014 arrival in Brazil of Swarovski Waterschool, a project that teaches children about water conservation. Water is a key component in the manufacture of Swarovski’s crystals, as the theme. However, he said he didn’t want to make obvious references to it.

Gemfields made its presence known not with an art installation but with a movie project titled, “React to Film,” by the Los Angeles County Museum of Art. The emerald and now amethyst mining and marketing company sponsored an event at the outside orchid gardens of the Delano Hotel (still cool after all these years). The event featured three five-minute documentaries of three groundbreaking modern artists, John Baldessari, Ed Ruscha, and David Hockney, by young filmmakers, Henry Joost & Ariel Schulman, Lance Accord and Lucy Walker.

The event gave Gemfields the opportunity to show its own promotional film of its Kagem emerald mine in Zambia, starring its ambassador, Mila Kunis. It provided an opportunity for a company that owns the Fabergé luxury brand and commissions one-of-a-kind jewelry from internationally known designers to associate its company with great artists.

Assistant Editor Maria Ling contributed to this story.

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