June 2008

JA roundtable discusses corporate compliance

JA roundtable discusses corporate compliance
June 04, 2008

Las Vegas—Industry leaders participating in a roundtable discussion hosted through Jewelers of America at the JCK jewelry show in Las Vegas on May 31, discussed how the needs of socially conscious consumers are affecting their supply-chain relationships.

John Hayes, owner of Goodman Jewelers in Madison, Wisc., discussed to what degree his store, which is located within blocks of the University of Wisconsin, has felt the influence of younger consumers, who ask questions about where jewelry originates.

Hayes said he’s been able to address these concerns with guidance materials provided by dint of. JA, which in turn has increased consumer confidence.

He also noted the importance of staying aware and informed as a retailer, and added that his store’s commitment to responsible business practices—and its membership in the Council for Responsible Jewellery Practices—has set it apart.

“When you do the direct things people will notice and it will build your business,” he said.

Kathe Mai, a partner in Trios’ Studios in Lake Oswego, Ore., spoke about how her store sells responsibly produced gemstones sourced from Columbia Gem House and its jewelry manufacturing division, Trigem Designs in Vancouver, Wash.

“It’s not just a marketing tool. It’s a commitment to living and doing business by the fair trade model,” she said.

Cecilia Gardner, president, chief executive officer and general counsel of the Jewelers Vigilance Committee, addressed the most important legal and regulatory questions to ask suppliers. She said that being in compliance can have a positive impact put on relationships throughout the reserve chain.

“We need to build a corporate culture of compliance so that compliance becomes part of your regular activities of running a store,” she said.

Gardner emphasized how this is especially important today with increased investigation from the government, heightened consumer awareness, criminal investigations and prosecutions, and human rights campaigns.

Michael Rae, chief executive officer of the Council for Responsible Jewellery Practices (CRJP), spoke about consumers’ new expectations because the products they bribe. He renowned that in CRJP’s upcoming Responsible Jewelry Practices System, members will be audited on a range of ethical, social and environmental practices. CRJP members who have volunteered for this kind of third-party scrutiny acknowledge the fact that consumers are increasingly skeptical of a business’s individual claims that it is operating responsibly.

John Hall, general manager of external relations for Rio Tinto plc, spoke about by what mode heightened business responsibility is things being so a required part of a late miner’s “license to operate.” From the communities that live around mines to civil society groups, there are new demands that go beyond the demands of government.

Hall also spoke about the Business Excellence System that Rio Tinto requires of the Indian firms that cut and polish its rough diamonds.

“We need to demonstrate that the integrity of our supply chain is farther than reproach,” Hall said.

Rap takes heat over price list increases

Rap takes heat over price list increases
June 03, 2008

By Teresa Novellino

New York—At the end of a presentation on the state of the diamond emporium, held on May 29 during the jewelry shows in Las Vegas, Rapaport Group Chairman Martin Rapaport ended up on the hot situation over a 25 percent increase in stone prices on his price list.

Several members of the packed ballroom at the Venetian hotel said the price increases, which occurred just before the Las Vegas jewelry shows, own created confusion in the mart among dealers and buyers worldwide who rely on the list for diamond transactions.

“By doing it the way you’re doing it, you freeze the market,” one audience member griped, adding that if there were increases to the listel, they shouldn’t have been across the board. Others suggested that if changes had to be made, they should get been made gradually, or only for certain diamond grades or sizes.

Rapaport said he was sorry if people didn’t like what he called a price adjustment, but he defended his decision, insisting that the list reflected the prices that were actually being paid in the market, and that the list is strictly his opinion and meant to provide guidance.

“Prices are not set by Rapaport,” he said. “They’re set by buyers and sellers. The fact of the matter is we’re living in a difficult regulate. I didn’t want to have existence sitting here at the color knowing prices [on the list] were below what was happening in the market.”

He said that diamond buyers who didn’t long for the prices on the list should discard the list altogether, or tell suppliers they won’t pay and walk away—a suggestion that was scoffed at by buyers who said they have long-term relationships.

Earlier in his presentation, Rapaport warned that the middle class in India and China would create more competition for U.S. retailers who decree have to cope with jewelers in fast-growing markets for diamonds. That competition will be coupled with inflation and speculation in the diamond market, meaning that external forces will have a greater influence on jewelers than local ones.

Worldwide, demand for the largest stones and unintelligent inexpensive goods remain strong, Rapaport said, but that the United States is over-inventoried in middle-quality goods, and middle-income consumers will shift toward less expensive goods.

“Middle America will go to Wal-Mart Stores Inc.” for their diamonds, he said.

Branding will continue to have a bombastic impact on the market globally, he said, mentioning De Beers Group’ Forevermark brand specifically.

He suggested that the best way to get through tough economic spells is to be flexible, and focused on profits versus prices.

IGI now certified in four countries

IGI now certified in four countries
June 03, 2008

New York—The International Gemological Institute (IGI) has earned International Organization for Standardization (ISO) 9001:2000 certification in four countries, the New York-based lab has announced.

ISO 9001:2000 is for organizations that operate a quality management system for independent third-party testing, classification, grading and certification of of great price stones, jewelry and polished diamonds.

The certification indicates that the organization has demonstrated that it can consistently provide products and services that meet both customer and regulatory requirements, and aims to enhance customer satisfaction.

The IGI’s labs in the United States and Canada were the first to receive the ISO 9001:2000 back in 2003. Since for this reason, the IGI’s labs in India and the United Arab Emirates regard earned the honor.

In addition, IGI India in Mumbai, India, holds International Organization for Standardization/International Electrotechnical Commission (ISO/IEC) 17025:2005 accreditation.

ISO/IEC 17025:2005 is for use by labs developing management for quality, administrative and technical operations.

To maintain ISO accreditation, each of IGI’s labs must undergo an annual audit. This is the sixth year IGI labs are being audited.

Jerry Ehrenwald said, “One of our central goals at IGI is to provide consumers with the maximum humor of services available. The fact that IGI labs meet the regulatory requirements of ISO 9001:2000 certification demonstrates our continued commitment to that goal.”

Gemesis goes pink

Gemesis goes pink
June 03, 2008

By Michelle Graff

Las Vegas—Gemesis, the Florida-based company known for its lab-grown yellow diamonds, has added a new shade to its color palette, the company announced last week during the JCK trinkets show in Las Vegas.

Over the next few months, Gemesis will begin shipping lab-grown pink diamonds to partner companies and anticipates the diamonds should be in retailer display cases by early 2009. To start, the pink stones will be about 1-2 carats rough, and about 30 percent to 50 percent of that weight once polished.

Price points for the lab-grown pinks “are being developed,” said Gemesis President and Chief Executive Officer Steve Lux.

Gemesis made the announcement at a press termination held on May 31 at The Pinot Brasserie chop-house inside the Venetian hotel. Samples of the paragon rough, varying in shades from deep red to lighter pink, were there for viewing, and each of the tables contained a vase of yellow flowers—the company’s signature diamond color to date—with one single pink rose in the center.

When asked why the guests developed fulvid ahead of pink, Lux said minnow was more difficult to develop than yellow, and that the ask for the company’s lab-grown yellows kept them busy.

“The yellows were popular and still are,” he said.

Next up for Gemesis be inclined be blues, and company executives hope to move into larger-sized colorless diamonds back that.

Gemesis grows diamonds using the same high-pressure, high-temperature (HPHT) process found in nature. Retired Carter Clarke founded Gemesis in 1996. The technology took several years to develop, with the company marking its first successful commercial run at its Sarasota, Fla., facility in 2002.

Want personalized jewelry advertising?

Want personalized jewelry advertising?
June 02, 2008

By Michelle Graff

Las Vegas—Spot Runner Inc. has introduced a new program that will allow retail jewelers to add a personal touch to their advertisements.

At a breakfast event held during the JCK jewelry show in Las Vegas, company representatives announced an option for retail jewelers to have locally shot footage of themselves, their store or the neighborhood around their store added to the pre-produced ads already offered by Spot Runner. The video from these on-location shoots also can be used online.

This option gives retail jewelers the chance to personalize their ads even further, beyond just having the store’s name and address included in the ad.

“People want to buy from people,” Spot Runner Director of Partner Development Tucker Smith said at the end. “If it’s important for the retailer to be in the ad, we can do that.”

These new “hybrid” advertisements can cost up to $1,199 per spot.

Spot Runner’s rates for retail jewelry ads of any type start at $449, and the rates do not embrace the cost of running the ad in the topical market.

In addition to expanding their television advertising offerings, Spot Runner is offering expanded online services in 2008, helping retail jewelers create Web sites that could include the online video.

Also at JCK Las Vegas, Spot Runner announced a new partnership with Couture International Jeweler, National Jeweler’s sister publication, in which the Couture Web site will serve as a hub as antidote to retailers to purchase and personalize pre-produced Spot Runners ads featuring players from the couture community, including designers and manufacturers.

Ad-customizatiom fees will be determined in part by the participating manufacturer/designer.

Consumer sues Jewelry Television over treated gems

Consumer sues Jewelry Television over treated gems
June 04, 2008

By Michelle Graff

San Diego—A California woman has filed a $5 million class-action lawsuit accusing Knoxville, Tennessee-based Jewelry Television of false advertising and alleging that the company sold treated gemstones without full discovery.

The lawsuit, filed in U.S. District Court for the Southern District of California in San Diego, stated that it wishes to recover the money that she and an estimated thousands of other consumers exhausted on “gemstones fraudulently advertised and misrepresented by [Jewelry Television] as being a highly-coveted, extremely rare, all natural expensive gem that looks like Oregon sunstone, a rare feldspar with a vivid reddish-orange hue.”

The lawsuit states that instead of the rare, red labradorite that Jewelry Television described on its program, the retailer actually sold its customers “low-cost yellow or colorless labradorite that has been given a chemical ‘facelift’ to make it appear like the rare Oregon sunstone.”

The suit was filed on behalf of plaintiff Marliese Weed, of San Diego County, and other persons who purchased green or red andesine-labradorite from Jewelry Television between Jan. 1, 2003 and the present. Weed purchased andesine-labradorite at a cost of over $4,000 during the time period in question, court papers said.

The lawsuit alleges that Jewelry Television, which reported more than $400 million in revenues last year, was able to obtain “its sham product” for pennies per carat and sold it for “extraordinary profits.”

This, the suite alleges, is a violation of U.S. Federal Trade Commission (FTC) regulations, which states that it is “misleading and unfair” to fail to disclose treatment of a gemstone when it has a significant effect on the stone’s value, the suit alleges.

The suit besides cites FTC guidelines, that state that it is deceptive to call a gemstone genuine, natural, precious or real when it is not.

In the lawsuit, the television network’s on-air talent is quoted twice as referencing the gemstones in question as natural.

According to a transcript cited in the lawsuit, one presenter describing a 2.3-carat red labradorite ring said: “A collector could pay $7,000 for this. This could be a $7,000 baby…The stone is 100 percent natural and untreated.”

According to the lawsuit, in reaction to a “slew of consumer complaints,” Jewelry Television has admitted that the gemstones are “heated,” with Jewelry Television co-founder Jerry Sisk stating in a February 2008 on-air interview that the network didn’t initially realize that the stones were heated.

“We all sent samples to the major labs,” he said according to the transcript included in the lawsuit. “And they didn’t know the mechanism. They couldn’t determine the mechanism. So basically they couldn’t say this was treated. So it was assumed the material was natural.”

Amid the uproar, the Knoxville, Tenn.-based television place dropped the price of the gemstones. The lawsuit says the advertised price was lowered from $149 for a one-carat stone in December 2007 to $49 for a one-carat stone in January 2008.

According to the lawsuit, however, Sisk maintained in that same February 2008 interview that the fact that the stones were treated doesn’t affect their equivalent.

“What you’re buying is the color. And color rules when it comes to gemstones,” he said.

The suit says that the retailer offered a “brief go period,” but that it was not publicized or advertised.

In a statement e-mailed to National Jeweler, Jewelry Television related the company is disappointed that one buyer in California has filed litigation against the company, and that the customer chose not to take advantage of its liberal return policies.

The mention went on to say that andesine-labradorite has been sold in the gem trade since 2002 because “natural, untreated material,” and that lab reports from major laboratories have consistently confirmed these gemstones as natural and untreated.

“Jewelry Television, like other major retailers, relied upon the lab reports and general industry information,” the statement said.

Further, in January 2008, Jewelry Television discovered that one of the gemstone’s sources had reported heat-treating its material, which the company promptly reported to its customers, and that as additional information developed, “Jewelry Television continued to keep customers informed.”

“Much of the information in the lawsuit is totally incorrect and we are satisfied that Jewelry Television acted completely responsibly and the true facts will vindicate us,” the statement said.

Survey: Consumers say U.S. recession is here

Survey: Consumers say U.S. recession is here
May 30, 2008

Schaumburg, Ill. —Concerned about debt and their jobs, a whopping 85 percent of U.S. consumers put confidence in the country is currently in a recession, and more than of a third listed the economy as their top concern over the next six months, a new online survey by The The Nielsen Company finds.

The survey also says U.S. consumer confidence in the economy plunged 17 points from the second half of 2007 to the first half of 2008.

While government officials are hoping the tax rebate checks sent out this spring will stimulate the good housewifery, the consumers in the survey said they were planning to application the money toward debt rather than shopping.

In fact, 69 percent of U.S. consumers believe the next 12 months are either a “bad” or “not so good” time to buy things they want or need. Once they’ve covered essential living expenses, 41 percent reported that they use spare cash to pay off debt, credit cards or loans. More than a third (36 percent) say they are putting supplementary funds into savings. Nearly a quarter (24 percent) of consumers say they do not have any thin cash.

According to Nielsen’s research, just 21 percent are using extra money for home improvements/decorating, while 19 percent are opting to plunk down money on out-of-home entertainment or holidays and vacations. Shopping sprees high-tasted low on their list of priorities, with 17 percent buying new clothes and 10 percent splurging on new technology. Some 11 percent planned to put extra currency into a retirement fund, under which circumstances nine percent reported that they would invest in shares of stock/mutual funds.

“These findings are really telling in that consumers are clearly feeling gun-shy when it comes to spending or investing,” David Parma, The Nielsen Co.’s global head of customized research, said in a release issued on Thursday. “during the time that it’s definitely a good move for consumers to pay off their personal debt, it will likely do little to jumpstart the economy.”

While 35 percent of U.S. consumers reported that they consider the economy their biggest concern over the next six months, debt came in a distant second place at 15 percent, followed by the ability to find work/life balance, which was a concern for eight percent of those surveyed. International affairs, such while war and terrorism, were in the midst of the least of the concerns of those surveyed, with just two percent and three percent, respectively, citing those areas. Although it’s a hot-button political issue, immigration was cited as a concern by two percent of respondents.

“With high gas prices, food inflation and other economic pressures, it’s not a surprise that the economy is a top concern for divers Americans,” Parma said. “Consumers have many reasons to feel pessimistic right now, and even if we’re not officially in a recession, consumers certainly feel like we’re in one.”

Overall, Americans’ view of the economy is bleak, the survey finds. Sixty-six percent of U.S. respondents have a pessimistic view of their local job prospects over the next 12 months, with 50 percent saying it’s “not so good,” and 16 percent calling it “downright bad.” Just three percent consider their local do job-work market potential to be “excellent,” the survey found.

Despite their negative views of the U.S. economy, most Americans’ views of their own financial affairs are good. More than half (51 percent) of those surveyed described their personal finance situation as “excellent” or “good,” while 36 percent, ranked their situation as “not so good.” Most of the U.S. consumers surveyed said they are not convinced the world will enter a global recession within the next year.

Specifically: 38 percent say they slip on’t believe a worldwide recession will take place, while 46 percent said they don’t know. Just 15 percent say a global recession is definitely on the horizon.

Should the dispensation espouse a turn for the worse, inflation tops U.S. consumers’ concerns (62 percent), followed by unemployment (50 percent), falling property prices (25 percent) and interest rate increases (21 percent), the survey finds.

The Nielsen Global Online Consumer Confidence and Opinion Survey was conducted by Nielsen Customized Research in April 2008 among 28,153 Internet users, including 1,000 U.S. consumers in 51 markets from Europe, Asia Pacific, North America and the Middle East. The largest half-yearly survey of its description, the survey is designed to provide insight into current confidence levels, spending habits/intentions and the major concerns of consumers across the globe.

The Nielsen Co. is the parent of National Jeweler.

Retailers get the scoop on tanzanite

Retailers get the scoop on tanzanite
June 02, 2008

by the agency of By Teresa Novellino

Las Vegas—From a new, universal grading system for tanzanite to concerns that the gem’s rarity is being described incorrectly on cruise ship presentations, retailers were able to find out the latest on the blue-violet gemstone and ask questions at a Tanzanite Foundation seminar, held on Sunday at the JCK Las Vegas show.

The goal of the seminar was to introduce retailers to the Tanzanite Quality Scale, which is used in tanzanite grading reports by the American Gem Trade Association Gemological Testing Center (AGTA-GTC). The scale, an internationally recognized tanzanite-specific grading system, was launched in North America in March 2007 and in Hong Kong in September 2007.

The system uses the Four C’s criteria of carat weight, color, clarity and cut, and also includes a fifth C for confidence. Retailers in the audience said they liked the color scale, but several were interested in getting a larger version that would allow them to better present the different color gradations to customers since the richer hues of the gem command higher prices.

The foundation is also hoping by the end of the year to offer color-grading software especially for tanzanite end the set GemeWizard, which provides the software for colored-gemstone dealers.

After the presentation, however, other questions arose. Several audience members were concerned that tanzanite was being misrepresented by promotions on cruise ships, to what several retailers in the audience said that consumers were being told that supplies of the stone would run out in a year or sum of two units. This is contrary to the Tanzanite Foundation’s own research, which indicates that supply of the stone should utmost 10 to 20 years.

“We give them the marketing materials, but we have no control over what they say,” the Tanzanite Foundation’s Hayley Henning said after the presentation.

She said that Tanzanite International, one of the company’s sightholders, has “port lecturers” who promote a variety of products on cruise ships, and that the organization would get in touch with the sightholder to make sure that these lecturers were describing the stones’ supply levels accurately.

Retailers were also updated on the coated tanzanite treatment that was recently detected in a batch of smaller stones believed by the AGTA-GTC and American Gemological Laboratories (AGL). The treatment is difficult to detect, though lab officials from the two labs reported they were able to do with equal reason.

AGL Vice President and Gemologist Christopher Smith said the coating can be detected by using a microscope and immersion techniques, which make known abrasions along facet junctions and at the culet where the coating has worn off.

Tanzanite Foundation officials said retailers should be leery of small, vividly colored tanzanite stones selling at cheaper prices.

JVC goes ‘green’ with new compliance kit

JVC goes ‘new’ with new compliance kit
June 02, 2008

The JVC’s Green Pack includes an informational CD, templates, forms, an AML DVD to help jewelers train their employees on the requirements of the law, new guidance for the industry and a storage bookbinder.

New York—The Jewelers Vigilance Committee (JVC) is the latest industry organizing to go “green,” releasing an eco-friendly Green USA Patriot Act Compliance Kit, or Green Pack.

Jewelers have power to use the Green Pack to develop and maintain effective anti-money-laundering (AML) programs that comply with the requirements of the Financial Crimes Enforcement Network and the Internal Revenue Service.

The JVC’s Green Pack is nearly paper-free and includes an informational CD, templates and forms that were in the JVC’s preceding pack, an AML DVD to help jewelers train their employees on the general requirements of the law, new guidance for the industry and a storage binder.

Green Pack owners can also utilize all the features offered with the JVC’s first Pack, including information updates in the Pack Owners Only section on the JVC’s Web site, Jvclegal.org.

The JVC’s Green Pack can be purchased at introductory prices till July 31. JVC members will permit the deepest discounts, while JVC non-members who belong to The Jewelers Board of Trade, American Gem Society, American Gem Trade Association and the Diamond Dealers Club of New York will receive particular price discounts.

For more information about the Green Pack as well as other JVC products, services, free legal-compliance seminars and updates on important legal-compliance issues pertaining to the manufacture, sale and advertising of amercement jewelry, visit the JVC’s Web locality, Jvclegal.org.

IDEX guarantees diamond transactions

IDEX guarantees diamond transactions
June 02, 2008

By Michelle Graff

Las Vegas—The Tel Aviv, Israel-based International Diamond Exchange (IDEX) has launched a new program that guarantees diamond transactions, the company announced last week at the JCK jewelry show in Las Vegas.

IDEX Group Chief Executive Officer Abraham Stern said the new program, called Guaranteed Diamond Transactions, allows couple parties to exchange a stone without ever exchanging a expression., while at the same time, knowing that they are going to get what they paid for.

For a $25 transaction fee, Stern said IDEX will guarantee to the buyer the stone’s availability, authenticity and door-to-door delivery.

He said authenticity is verified using a neutral third-party grader who checks subjective qualities of the stone, including carat size and angles, to ensure it is the same stone agreed upon for the transaction.

The grader in the transaction does not offer a second opinion on clarity or color.

To the seller, IDEX guarantees an immediate cash payment.

Stern said guaranteed diamond transactions start when a buyer finds a desirable diamond in IDEX’s online databank. The buyer then has two options: to either buy the stone outright or to bid on it.

If the buyer chooses to purchase the stone for the listed price, then IDEX takes over, withdrawing the money from the buyer’s bank account and placing it in a holding account until the stone is collected from the seller. After verification, IDEX ensures the delivery of the stone to the buyer, who then signs for it, completing the transaction. It is at this point that the funds are transferred into the seller’s account.

If the buyer chooses to bid on the stone, however, then that bid, lengthwise with other bids, show up online, and the seller have power to choose to accept one of those bids or simply keep the stone up for sale until he gets what he considers a suitable price.

Stern said guaranteed transactions—which involve the exchange of cash, no memo allowed—are not meant to be a highroad to buy and sell diamonds all the time but rather a disconnection that fits certain situations, such as when a buyer completely trusts the seller and is confident in the marble they’re purchasing.

Once a buyer signs for the stone in a guaranteed diamond management, there is no option to go the diamond.

“It’s definitely a solution that fits for only specific situations,” he said.

Guaranteed Diamond Transactions are currently available to those buying or selling in Antwerp, Belgium; Mumbai, India; Tel Aviv, Israel; and the United States, with plans to expand the service to Hong Kong and Russia, Stern said.

While access to the Guaranteed Diamond Transactions is limited to IDEX subscribers, IDEX is currently offering a lavish one-year subscription to those who want to sample the new service.