January 2008

Vicenza aims to be ‘first’ in emerging markets

Vicenza aims to be ‘first’ in emerging markets
January 18, 2008

Vicenza, Italy—The Vicenza Fair’s January show has received a makeover, beginning with a name change.

No longer called Vicenzaoro, the fair, which opened last Sunday and runs through Jan. 20, now goes by “First,” a designation that’s meant to spotlight the show as the industry buyers’ first international appointment for jewelry and gold. The show’s tagline, “The jewellery supremacy,” is designed to set Italy’s gold-jewelry sector on a pedestal for design.

No attendance figures were released, but as of Thursday, traffic at the show appeared steady in the face of negative factors such as the increasing prices of precious metals and a downturn in business with various countries including the United States in 2007.

In a press release, Vicenza Fair officials said the Italian gold-jewelry sector remained on an uphill climb in 2007, as it continued to deal with global competition, but that it still maintains its place at the top of the list of jewelry-exporting countries.

Statistics from the Vicenza Fair Study Centre, reveal that Russia, the United Arab Emirates, Hong Kong, Turkey and Australia are markets on the rise for Italian jewelry exports, while others declined in 2007, including the United States, due to economic woes brought on by the subprime-mortgage crisis.

Overall, the value of Italian gold-jewelry exports during the first nine months of 2007 was almost a quarter below the levels reached during the same period in 2000, the statistics said. Between January and September 2007, exports increased by 19 percent in terms of value, though sales volume was flat.

There was a 7.3 percent decline in exports to the United States and a 25.1 percent drop in exports to Japan, but a 65.6 percent increase in exports to the Middle East and a 50.7 percent increase in exports to Eastern Europe.

Still, 2007 exports were the driving force behind the sector since Italy’s domestic jewelry market continues to decline.

The Vicenza Fair reported that the retail markets with the most interesting growth rates in 2007 were Switzerland, the United Kingdom, Denmark, Poland, Sweden, Turkey, the Ukraine and the Czech Republic.

Despite uncertainty in the global jewelry marketplace, there are still big opportunities for Italian designers and manufacturers in emerging markets, and in European markets that still maintain a strong interest in the “Made in Italy” brand, show officials said.

To make the market flourish, the Vicenza Fair stressed the importance of promoting jewelry as both unique and fashionable, and playing up its exclusivity status.

Russell Simmons’ D.E.F. sees more ‘green’

Russell Simmons’ D.E.F. sees more ‘green’
January 18, 2008

From left: Simmons Jewelry Co. President Scott Rauch, Diamond Information Center Director Sally Morrison, D.E.F. Advisory Board Chairman Russell Simmons, D.E.F. Director Ellen Haddigan, and Botswana native and D.E.F intern Lesego Mathware at the D.E.F. check presentation.

New York—Simmons Jewelry Co. President Scott Rauch has presented on behalf of the company a donation totaling $311,535 to the Diamond Empowerment Fund (D.E.F.).

The D.E.F., founded by Simmons Jewelry Co. co-owner Russell Simmons upon his return from Africa last year, is a nonprofit, international organization dedicated to empowering Africa through funding education programs in African countries where diamonds are a natural resource.

Simmons Jewelry Co. launched the Green Initiative jewelry collection last year with a signature piece called the “Green Bracelet,” made from genuine green malachite beads and a conflict-free rough diamond sourced from Africa.

More than $20 from the sale of each Green Bracelet, which retails in the United States for $125, is donated to the D.E.F.

The bracelet has become a popular accessory choice, worn by celebrities such as Beyoncé Knowles, David Beckham, John Mayer, Ludacris, Penelope Cruz, Serena Williams and former U.S. President Bill Clinton.

For more information on the D.E.F., visit its Web site, Diamondempowerment.org.

Editor’s note: For related news, see Simmons Jewelry Co.’s ‘Green Bracelet’ to benefit DEF.

Piaget brings Swiss luxe to Vegas

Piaget brings Swiss luxe to Vegas
January 18, 2008

Las Vegas—As it continues to expand its U.S. retail presence, Swiss retailer Piaget is opening a new corner store in The Shoppes at The Palazzo, Las Vegas’ new luxury retail center.

“We’ve had our eye on Las Vegas for quite some time, but everything had to be just right,” Piaget North America President Larry Boland said in a press release issued on Thursday.

He added that The Palazzo’s prime location, adjacent to The Venetian and the Sands Expo and Convention Center, as well as its world-class retail and restaurants, make it an ideal fit for Piaget.

Piaget’s corner location at The Palazzo features a classically modern architectural style that is typical of the retailer’s other stores around the world. The store spans approximately 1,000 square feet and is surrounded by three walls of windows featuring 10 standalone display units that will house the latest collections.

The store will feature the full collection of Piaget jewelry and timepieces, including boutique-exclusive items and special limited-edition collector’s pieces. Among the spotlighted items will be a new “Casino” collection featuring a hand-enameled “roulette-inspired” timepiece and matching pendant, a diamond watch on a strap adorned with dangling, laser-cut, patent leather playing-card symbols, and a one-of-a-kind pair of dice set with 1,056 brilliant-cut rubies and 1,060 brilliant-cut diamonds and an actual clock in place of the sixth side.

The boutique, which officially opened on Jan. 17, will be open seven days a week into the late evening and offers private appointments and other VIP/celebrity services.

Report: Gold Jewelry Demand to Fall 20%

Gold demand for Jewelry fabrication may fall by as much as 20 percent in the first half of 2008 primarily due to the record prices the precious metal is demanding from investors, according to a report released Thursday.

"Price damage in first half 2008 is forecast to slash demand by around a fifth to almost 1,000 tons," said Philip Klapwijk, executive chairman of London-based precious metal consultancy GFMS Ltd.

Klapwijk delivered a summary of Gold Survey 2007 – Update 2 report, during a seminar in Toronto organized by the firm.

In 2007, jewelry fabrication demand for gold grew 5 percent, "despite the gold rally, as gains in the more stable first half outweighed second half losses when yet higher prices and volatility took their toll," Klapwijk said.

U.S. consumption of gold jewelry fell heavily. China and Turkey saw strong growth for the period.

"High prices and volatility were the two chief reasons that the consultancy expects fabrication to slump by almost a fifth in the first half this year," Klapwijk said. "Less marked gains for local prices due to dollar weakness and continued robust GDP growth in many emerging economies were expected to partially mitigate the impact of the expected gold rally. Such factors explain why GFMS see the ‘jewelry floor’ (the level deemed fair and sustainable at which physical buyers return) as having moved up to the low $800s, a result which the consultancy feels to be ‘remarkable.’ "

He added, "However, doubt was cast on the solidity of prices moving forward, given the huge volumes investors would have to pick up to keep the market in balance as jewelry demand slips well under mine production."

Gold rose 31 percent last year, its seventh consecutive annual gain, as the dollar declined against 14 of the 16 most- actively traded currencies. A weaker dollar increased demand for precious metals as an alternative to U.S. stocks and bonds.

Overall, the report expects gold prices to drop to an average about $840 for the first half of the year, with the price of the precious metal increasing to new record levels during the second half of the year. Gold climbed to a record $914.30 recently and has averaged about $875 so far this year.

“Investor appetite for gold at the moment seems undimmed and this should push gold higher over the year," Klapwijk said. "Predicting the top is never easy but we always thought the $900 barrier could easily fall quite soon and then we have to start viewing $1,000 as a clear possibility for later this year."

The report also noted that China became the world’s largest gold producer last year. China produced 276 metric tons of gold last year, according to the report. A 12 percent increase from 2006 and just over one-tenth of the world’s supply.

The ranking pushes South Africa into second place for the first time since 1905, GFMS said.

Overall mine production in 2007 fell by just over 1 percent, partly because of delays to development and expansion projects, according to the report. Losses centered on South Africa, Peru, and the United States, while gains were reported in Indonesia (in addition to China). Output in the first half of 2008 is forecast to grow by just over 2 percent.

Breeden Joins Zale Board

Activist investor Richard C. Breeden and a partner in his investment fund have joined the Zale Corp.’s board of directors.

Breeden, former chairman of the U.S. Securities & Exchange Commission, is the chief executive officer and chief investment officer of Breeden Partners and its manager Breeden Capital Management. Also joining the board is James M. Cotter, a founding partner of Breeden Capital Management and senior managing director of Richard C. Breeden & Co.

Their appointments became effective Thursday, expanding the board from six to eight members, the Dallas-based company said Friday.

Breeden Partners, with more than $1 billion in assets, has been buying up shares of Zale in recent months. The firm now owns more than 18 percent of the specialty retail jeweler.

“We believe that there are major opportunities for Zale to strengthen its profitability and its market value," Breeden said. "We are excited to join the board and the Zale management team in pursuing those opportunities with vigor and immediacy.”

From 1989 through 1993, Breeden served as chairman of the U.S. Securities & Exchange Commission. He has served on the boards of numerous public and private companies in the U.S. and Europe. He currently serves as the non-executive chairman of H&R Block, Inc., and as a member of the board of BBVA of Spain, one of Europe’s largest banks.

Prior to joining Richard C. Breeden & Co. in 2005, Cotter was a senior partner and vice chairman of the law firm Simpson Thacher & Bartlett LLP. Cotter joined the firm in 1971 and became a partner in 1975.

Zale Corp. also said in its statement that it is engaged in a search for an additional independent director, the appointment of whom would bring the board to its full complement of nine directors.

Breeden, business partner join Zale board

Breeden, business partner join Zale board
January 18, 2008

Dallas—Richard Breeden’s foothold in Zale Corp. increased again on Thursday when he and his business partner were appointed to the company’s board of directors.

Zale announced the appointment of Breeden and another new member, James M. Cotter, on Friday. The appointments increased the size of the Zale board from six to eight members.

Breeden, the former chairman of the U.S. Securities and Exchange Commission (SEC), has been buying up shares of Zale stock through his company, Breeden Capital Management LLC, since September.

He now owns an 18.1 percent stake in the company.

Breeden, who is known as an activist investor, has served on the boards of a number of public and private companies in the United States and Europe. He currently is the non-executive chairman of the board for investment firm H and R Block and sits on the board of BBVA of Spain, one of the largest banks in Europe.

Cotter is a founding partner of Breeden Capital Management and is a senior managing director of Richard C. Breeden and Co.

Prior to joining Richard C. Breeden and Co. in 2005, Cotter was a senior partner and vice chairman of the law firm Simpson Thacher and Bartlett LLP.

Following the appointment of Breeden and Cotter, Zale announced on Friday that it is looking for an additional, independent director to bring the board to its full complement of nine directors.

Editor’s note: For related news, see Breeden’s stake in Zale continues to rise.

Roger Dubuis and U.S. Distributor End Dispute

Swiss luxury watchmaker Roger Dubuis S.A. and its former U.S. distributor Helvetia Time Corp. (which did business as Roger Dubuis North America, Inc.,) have dropped legal actions against each other, that began with a dispute in late 2005. Roger Dubuis S.A. had been without an active U.S. distributor since 2006.

The announcement was made Jan. 17 by Carlos Dias, chief executive officer of Roger Dubuis S.A., Geneva, Switzerland, and Steven Holtzman, president of Helvetia Time Corp., Wilkes-Barre, Pa. In a statement, they said the two companies “agreed to resolve all outstanding issues concerning the distribution of Roger Dubuis products in North America. As part of the agreement, all legal actions pending between both parties will be withdrawn.” Neither side had any further comment about the agreement itself, due to its confidentiality provisions.

However, Helvetia Time won’t be distributing Roger Dubuis products again in the United States. According to a joint-announcement made in September 2007, Compagnie Financière Richemont SA, one of the world leading luxury products groups and watchmakers, agreed to distribute Roger Dubuis watches in some key markets, including the United States and the Middle East.

The dispute between Roger Dubuis S.A. and Roger Dubuis North America began in November 2005, when Roger Dubuis S.A., ended its contract with RDNA for alleged breaches of contract. RDNA has been its distributor since 1999, creating the U.S. market and distribution. Its contract was due to end in 2009, with an option to renew.

The U.S. firm denied the allegations and called it was an “unjust termination” and an attempt by the Swiss watchmaker to take control of business in America. The Swiss watchmaker at the time said it was “restructuring and improving its international distribution network.”

Both filed legal actions against each other in Swiss and U.S. courts in 2006.

Investor increases stake in Tiffany

Investor increases stake in Tiffany
January 18, 2008

New York—An activist investor is buying up shares of another long-standing, well-known U.S. retail jewelry chain.

Nelson Peltz, through his New York-based company Trian Fund Management GP, LLC, increased his stake in Tiffany and Co. to 7.9 percent, a filing with the U.S. Securities and Exchange Commission (SEC) shows.

The filing shows Peltz, through his Trian companies, now owns a total of 10.7 million shares of stock in the iconic jewelry company.

Another activist investor, Richard Breeden, has also been buying stock in a jewelry store chain recently; he now owns an 18.1 percent share of the struggling Zale Corp.

In other Tiffany news on Friday, the company announced it is expanding its stock-repurchase program and authorized the repurchase of up to $500 million in common stock.

The increase enables Tiffany to repurchase up to $637 million of its common stock through Jan. 11, 2011.

The board’s last increase took place in August 2006, when it authorized the repurchase of up to $813 million of stock through Dec. 31, 2009.

Tiffany has approximately 127 million shares outstanding.

Tiffany also announced the opening of two new stores in Japan: a 5,000-square-foot boutique in Tokyo, and a 1,700-square-foot one in Fukuoka.

With these openings, the New York-based luxury retail jeweler now operates 56 stores in Japan.

Rapaport to publish weekly diamond-price list

Rapaport to publish weekly diamond-price list
January 18, 2008

New York—The Rapaport Group announced on Thursday that it will now publish a weekly price list that sums up the best and average asking prices for select categories of diamonds.

In addition, Rapaport will also offer the new RapNet Asking Price Indices (RAPI) for D-H color, IF-VS2 clarity diamonds between 0.30 and 3 carats.

Rapaport will publish the new RapNet Best Price List in addition to its standard Rapaport Price List.

The new list will present independent asking price data that reflects volatile daily market forces and detailed discount information. The standard Rapaport Price List, however, will remain the primary source of diamond-price information, with its more stable pricing guidelines that are based on the opinion of Rapaport Chairman Martin Rapaport.

“The new RapNet Best Price list will enable increased transparency as it provides standardized discount information to the diamond trade,” Rapaport said in a statement. “Dealers and retailers will now have better information as to the level of trading discounts from the Rapaport Price list. Traders will be able to monitor detailed movements of asking prices on an hourly and daily basis by monitoring RapNet trading screens and the new RAPI indices.”

The RapNet Best Price List will be distributed only to members of the RapNet Diamond Trading Network and will reflect market conditions as of midnight Saturday EST.

Swatch Group sales up 18 percent

Swatch Group sales up 18 percent
January 18, 2008

Zurich, Switzerland—Watchmaker Swatch Group AG reported an 18 percent increase in 2007 sales on Friday, citing production improvements, cost reductions and selective price increases as offsets to a difficult currency environment and higher raw material costs.

The Biel, Switzerland-based company, the world’s largest watch producer by sales, said revenue for the full year increased to a record 5.94 billion Swiss francs ($5.4 billion) from 5.05 billion Swiss Francs in 2006.

This was due in part, the company said, to strong growth in all Group divisions, notably the watch and jewelry segments, as well as the production segments.

Foreign currencies also had a marginally favorable impact on Group sales of 0.3 percent, largely due to the strong and stable development of the euro.

The company said it would post an above-average increase in operating results and net income for 2007, and anticipates further growth in all areas in 2008 despite the current turbulence in financial markets.

For January, the company expects to post a double-digit advance in sales and noted orders at hand point to strong growth in the first half of the year.

Swatch Group will release its full 2007 earnings report on March 19.

Swatch Group is an international manufacturer and seller of finished watches, jewelry, watch movements and components. In addition to its namesake Swatch brand, the company also owns such high-end brands as Blancpain, Breguet, Omega and Rado. For additional information about Swatch Group, visit the company’s Web site, Swatchgroup.com.