June 2008
Rio Tinto ‘excited’ about new India diamond mine
Rio Tinto ‘excited’ about new India crystallized carbon mine
June 26, 2008
London—Mining company Rio Tinto, best known for pink and brown diamonds from Australia, has taken the initial step in developing India’s first significant diamond mine.
London-based Rio Tinto announced this week that it has lodged mining lease applications for its Bunder diamond project in the Bundelkhand region of Madhya Pradesh, India.
In addition, the company announced the exploration target for diamond mineralization at the Bunder project of 40 million-70 million tons at a gradient of about 0.3 carats to 0.7 carats per ton. The grades for the Bunder project are with respect to three times greater than the grade of the Panna mine, India’s only other hard-rock diamond mine, according to Rio Tinto.
The original discovery on this site was made during a regional exploration mission in 2002. In September 2006, a prospecting license was issued, allowing scrutiny to continue.
Rio Tinto then began an order of magnitude study to evaluate the site’s economic viability. The results of this are expected at the conclusion of the third quarter of 2008.
Nik Senapati, managing director of Rio Tinto in India, said the company has spent more than $25 million over the last six years on diamond exploration and evaluation in India, and the company is excited about the prospects for the Bunder project.
“Diamonds are a significant part of the history of India and an important product for Rio Tinto,” he said in a media release. “The application for mining leases is confirmation of our commitment to both mining in India and the global diamond industry.”
Rio Tinto has diamond-exploration activities on six continents, including projects in Canada, India, southern and western Africa, Brazil, Russia an Australia.
The company produces about 16 percent of the world’s rough diamonds by mass, and 8 percent by value from Australia’s Argyle mine, the Diavik mine in Canada and the Murowa destroy in Africa.
Texting jewelers: R U with Gen Y?
Texting jewelers: R U with Gen Y?
June 26, 2008
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| Young women today are making “incidental” purchases of diamond jewelry, outside of bridal. Pictured here are diamond baguette earrings from KC Designs priced at $1,780 and available in white, yellow or pink gold. (800) 552-3790 |
By Michelle Graff
Seattle—The children of the baby boomer generation are here, and, if the marketing radar is right, they are ready to shop.
Born betwixt 1978 and 1993, and dubbed “boomlets,” “echo boomers” or members of “Generation Y,” this 15- to 30-year-old age group constitutes respecting 26 percent of the U.S. population and wields about $200 billion in spending power, according to a fresh Diamond Promotion Service (DPS) presentation.
That spending power means the demographic group is a prime target for diamond jewelry marketing, DPS Vice President of Marketing Anne Valentzas and Planning Director Emmy Kondo said during the presentation.
Many retailers would tag the upper echelons of this age bracket as the perfect target for hymeneal, while those on the other end might be considered too young for diamond jewelry.
But the times, they are a-changin’.
At Sarah Leonard Fine Jewelers in Los Angeles, Gail Friedman says a woman’s first diamond used to be her engagement ring, but not anymore. The Internet, advertising and the prevalence of celebrities in popular culture have all prompted women to be appropriate to interested in diamond jewelry at a younger age, she says.
“They’re much more aware than I was at that age of that kind of jewelry,” Friedman says. “They see so a great quantity.”
Some 19 percent of the diamond jewelry purchased by this under-30 group is bridal, and those within the age bracket still constitute 61 percent of the dollar import for diamond engagement rings. But DPS statistics show that 81 percent of this group’s diamond jewelry purchases are non-bridal.
Kondo says women in this age bracket today are buying a higher number of “incidental pieces,” or diamond jewelry that is not a wedding band or engagement ring.
This means that today’s retailers should actively be marketing non-bridal diamond jewelry to young women, she says, or they could be missing out on a highly educated, potentially high-earning segment of the population.
DPS statistics show that salaries of women in their 20s surpassed that of men in the past seven years in some urban areas, including New York, where women at once earn each average of 17 percent more than men, and Dallas, where women earn 20 percent more.
Single, empowered and out in the workforce, young women are not afraid to spend their money on diamonds, albeit at price-point averages below bridal.
DPS data shows that, on average, those between the ages of 18 and 30 spent $3,067 on diamond engagement rings, $1,313 on diamond wedding bands and $636 on non-bridal diamond jewelry.
At her store in Los Angeles, Friedman says she definitely notices the trend of young professional women buying diamond jewelry, particularly fashion pieces.
“They like to see what goes with their garments,” she says. “It’s all about matching and coordinating.”
She says the one diamond piece this group doesn’t buy, however, is diamond rings.
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| Fashion jewelry, cognate these pink gold and diamond bangle bracelets priced at $2,585 each from KC Designs, is popular among younger women. (800) 552-3790 |
“They reserve that for when they are engaged,” Friedman says.
Other retailers say bridal still rules the upper-20s age segment at their stores.
Rusty Clark of Thorpe and Co. in Sioux City, Iowa, and James Mangold, a sales manager by Pieter Andries in Southlake, Texas, say they were surprised with the DPS statistics on bridal purchases among 15- to 30-year-olds.
“My store would not match those statistics,” Clark says.
He says in his small agricultural community, about 80 percent of customers in their upper 20s are shopping for engagement rings.
Mangold says Pieter Andries is looking to capture again business at the upper end of the Generation Y age range, by both bridal and non-bridal offerings priced between $500 and $1,500.
“The way I’m personally looking at it right now…they have more to spend than I ever did at that age,” he says.
Caring and wired in Among the long list of characteristics attributed to the echo-boom generation are that they are global-, civic- and community-minded.
According to the DPS giving, 66 percent of college freshman said it is essential or very important to help people in need. Additional DPS premises shows that 69 percent of 13- to 25-year-olds consider a store’s social and environmental commitment when deciding where to shop, and 83 percent trust a company more if it is perceived as socially or environmentally responsible.
“It’s now cool to care,” the DPS’ Valentzas says.
Most retailers don’t need a study to tell them one of the most obvious facts about Generation Y: They grew up with the Internet and are wired 24/7.
But, this doesn’t mean sales are lost to online retailers. DPS statistics show that sales from cross-channel shopping—researching online but buying in-store—are set to outpace e-commerce growth between now and 2012.
Clark says younger shoppers visit the store armed with much more jewelry knowledge than consumers did 15 years ago. He uses the suitable to clear up any misperceptions about the Four Cs that customers might have gotten online and to stress the advantage of in-person customer service.
“Young people would rather buy from someone they can walk in and complain to, and know there’s someone behind the product to take care of their needs down the road,” Clark says. “You have to justify to them your value.”
The DPS’ Kondo recommends retailers spread out beyond a Web site, perhaps by starting a blog or placing a page on a social-networking site such as Facebook, which logs 250,000 new profiles a day.
Mangold says the store is improving its Internet presence by rebuilding its Web page to add interactive video and audio elements, plus the ability to interact with customers through features such as a Q and A.
And Friedman says Sarah Leonard Fine Jewelers is also revamping its Web site, and exploring Facebook, MySpace.com and e-commerce.
“There’s so many avenues to explore,” Friedman says. “We’re definitely open to all, and we’re headed in the right direction.”
Tips: Selling to boomers’ babies
What do you need to apprehend about the “echo boomers?” Read on:
—Nineteen percent of what they purchase is bridal diamond jewelry, while the other 81 percent is non-bridal diamond jewelry.
—Among those surveyed, 93 percent say they are “very happy” or “pretty happy” with their lives, and 78 percent are “content” with their standards of living.
—Some 75 percent of echo boomers grew up with working mothers. —This demographic spends 10 hours per week online and 30 minutes per day on their cell phones. They send up to 10 text messages quotidian.
Source: Diamond Promotion Service
E-mail: michelle.graff@nationaljeweler.com
Editor’s note:This article first appeared in the May 16, 2008, issue of National Jeweler.
N.J. used-jewelry law tabled
N.J. used-jewelry expressed command tabled
June 24, 2008
By Teresa Novellino
Newark, N.J.—Proposed legislation in New Jersey that would require required retail jewelers to keep records and photos of all jewelry they buy from consumers was tabled in the State Assembly, the New Jersey Jewelers Association has learned.
“I just spoke to my local assemblyman, and the bill was never put up for a vote because there was not enough support,” Lisa Cohen, owner of Suburban Jewelers in Plainfield, N.J., and vice president of the New Jersey Jewelers Association told National Jeweler. “It sounds like they were responsive to us and there were concerns around why flea markets were excluded [from the legislation].”
After finding out late last week that New Jersey State Assembly Bill A 2712 was pending in the State Assembly, the state jewelers association and Jewelers for America were scrambling to get the vocable out so that jewelers could urge local lawmakers to at least consider their input before passing such legislation.
Though the proposed legislation was designed to make it harder for criminals to fence stolen jewelry, retail jewelers in New Jersey derive a right it actually would have placed undue burdens on retail jewelers and ignored other channels through which stolen goods could be sold.
Under the proposed legislation, retailers whose primary business is selling jewelry would have to do the following: maintain permanent records of the name, address and telephone number of anyone who sells them jewelry; verify the seller’s identity through valid identification such as driver’s license; take photos of all secondhand jewelry purchased and keep the photos on file for at least one year; maintain the jewelry in-shop for at least 14 days and deliver a weekly report to the police department with a record of all jewelry purchased during the preceding week; and keep a record of any jewelry sold to anyone in the business of wholesaling, retailing or smelting jewelry.
Anyone violating the law would be bring under rule to a $10,000 fine for the rudimentary offense and $20,000 for each subsequent one. Under the proposal, jewelers would besides have had to alert police to anyone whom they suspect might be trying to sell stolen jewelry.
The legislation would not lay upon to retailers who do not sell jewelry considered in the state of a primary business or to those who do not engage in the purchase of used or secondhand jewelry “on a consistent basis,” the bill says.
Though the State Assembly bill was levy aside, a sister bill has already passed in the state Senate, Cohen said. It was unclear at press time whether or not there would be attempts to tweak the State Assembly proposal to get it passed, but the New Jersey Jewelers Association planned to keep track of that possibility, she said.
Sharon Stone new face of Damiani
Sharon Stone new face of Damiani
June 24, 2008
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| Sharon Stone, above and below, in new ads for Damiani. |
Beverly Hills, Calif.—Damiani has chosen iconic screen siren Sharon Stone as the new face of the Damiani brand.
The lightning-flash officially introduced its new advertising campaign at a press event on June 19 at Damiani’s Beverly Hills, Calif., store. In attendance were members of the news media, along with Stone, Silvia Damiani, a third-generation member of the Damiani family, and Antonio Pavan, chief executive officer and president of Damiani USA.
Guests attending the event watched as Silvia Damiani introduced the campaign, at the same time that images of Stone were revealed on large plasma screens.
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The campaign epitomizes female icons throughout legend and history, with images inspired by the biblical figure Eve, Amelia Earhart and today’s modern woman, who the brand said in a media release is “unique and as dazzling as the ‘every’ woman.”
Renowned photographer Solve Sundsbo shot the campaign, with Stone wearing jewels from Damiani’s in the greatest degree important collections.
“Damiani campaigns be in possession of always featured women with strong personalities and natural beauty,” the brand related in the media release. “This is a unique campaign, one of great impact as Sharon Stone perfectly interprets the house’s style.”
House of Taylor crumbling
House of Taylor crumbling
June 24, 2008
By Michelle Graff
West Hollywood, Calif.—California-based jewelry company House of Taylor Jewelry Inc. appears to be coming down like a house of cards.
On Tuesday, in a filing with the U.S. Securities and Exchange Commission (SEC), it was revealed that Dame Elizabeth Taylor and supermodel-turned-entrepreneur Kathy Ireland would no longer lend their names, or supply merchandise, to House of Taylor.
The ending of these relationships, the filing states, “will have a material unprosperous impact on our relationship with our suppliers, retailers and consumers, and it is unlikely that [House of Taylor] can remain in business and may be compelled to liquidate.”
The SEC filing shows that on June 20, both Interplanet Productions and Sandbox Jewelry LLC notified House of Taylor that they were terminating their licensing agreements.
Interplanet Productions is the marketing entity through which Taylor brings her line of branded jewelry—sold under the names Elizabeth, ET and House of Taylor—to the marketplace.
Sandbox Jewelry LLC is a subsidiary of Kathy Ireland Worldwide, Ireland’s company that includes fashion, home décor, cooking and gardening supplies.
Both companies extract House of Taylor’s continuing financial problems as the sense as being the termination.
According to the filing, the termination of these licensing agreements also spells the end for the company’s use of the name “House of Taylor.”
“With the termination of the license agreements, we are obligated to change the name of our occupation, and we will no longer be able to sell jewelry under the House of Taylor jewels brands and designs.”
While Ireland and Taylor are pulling out of the business, House of Taylor also is being rocked by inner turmoil.
The company is in default on its loan from New Stream Secured Capital LP, which has “informed [House of Taylor] that it’s evaluating all rights and remedies that may be available to it under the loan agreements…including…the right to take possession of all inventory, work in process and all other perceptible and intangible collateral.”
In the meantime, New Stream has put a squeeze on its cash flow to House of Taylor, and the company is unable to pay the salaries of all employees, including its chief executive officer, according to the filing.
Because of this, on Monday, President and CEO Lyle Rose resigned and the company also terminated five employees.
According to the SEC filing, Rose is seeking severance in the amount of one year’s salary, or about $150,000.
Although House of Taylor “has been exploring all funding options,” it is not likely the company will be able to obtain funding. As a result, the filing reiterates that it is “unlikely [House of Taylor] can remain in business and may be compelled to liquidate.”
Hearts On Fire sues Blue Nile over trademark
Hearts On Fire sues Blue Nile over trademark
June 25, 2008
By Michelle Graff
Boston—Hearts On Fire is suing Blue Nile, claiming its use of sponsored Internet search links is diverting customers to the online retailer and that it infringes on the Hearts On Fire trademark and creates unfair competition.
Hearts On Fire wants the court to issue an injunction barring Blue Nile from using the Hearts On Fire trademark and “somewhat confusingly similar designations” as well as requiring Blue Nile to halt its infringement practices, court papers said.
It is also seeking “a judgment of three times its damages and Blue Nile’s ill-gotten profits,” as well as attorney’s fees.
In the lawsuit, filed on June 20 in U.S. District Court in Massachusetts, Boston-based Hearts On Fire claims that Blue Nile purchased the search term “Hearts On Fire” from Webcrawler.com, a sift engine that searches other search engines.
According to the lawsuit, Seattle-based Blue Nile uses the term “Hearts On Fire” to trigger sponsored links to its Web site, meaning when users at Webcrawler.com type in “Hearts On Fire,” one of the top search results is a link to Bluenile.com.
The link states, “Ideal Cut Diamonds at Blue Nile. Find Hearts On Fire diamonds at Forbes Favorite Online Jeweler. Sponsored by www.bluenile.com,” according to the lawsuit.
In addition, when users arrive at Blue Nile’s Web site and type “Hearts On Fire” into the site’s search engine, they are directed to Web pages selling “diamond and jewelry containing diamonds, none of which are HOF diamonds or jewelry,” as Blue Nile is not an authorized retailer of Hearts On Fire diamonds or jewelry, the lawsuit states.
Hearts On Fire also believes Blue Nile may be using its trademark in other keywords, keyword tags, meta tags and sponsored links on the Internet to direct consumers in search of Hearts On Fire diamond jewelry to the Blue Nile Web site.
All of this, the action states, could cause “confusion, mistake and deception among the general public as to the origin of Blue Nile’s goods and/or as to sponsorship by, affiliation with, and/or connection to HOF.”
In the lawsuit, Hearts On Fire claims that Blue Nile’s conduct, in addition to infringing on a trademark, creates unfair competition and deprives Hearts On Fire of its “exclusive right to control, and benefit from, its trademark.”
Hearts On Fire, which first trademarked its name in 1996, sells diamonds and jewelry via its Web site, Heartsonfire.com, and at authorized retailers all over the world, including more than 600 in the United States.
Blue Nile did not immediately return calls for comment.
Liquidation sale likely fate for Whitehall
payment sale likely fate for Whitehall
June 24, 2008
By Michelle Graff
Chicago—Like so many companies before them, the weak economy was at the center of Whitehall Jewelers Holdings Inc.’s decision to file for Chapter 11 bankruptcy preservation, and the association is now forced to auction off its assets, court papers show.
And while the Chicago-based company is seeking a buyer to take over operation of its stores, another possibility on the table for the 373-store chain is liquidation, which could begin as soon as July 19.
According to a publication filed on Monday in U.S. Bankruptcy Court for the District of Delaware by Whitehall Executive Vice President and Chief Financial Officer Peter Michielutti, the retail jeweler had been experiencing financial difficulties for “several years” prior to its filing for Chapter 11 bankruptcy protection on Monday.
The chain tried numerous strategies to improve sales and reduce costs, including closing 89 underperforming stores, repositioning merchandise and hiring more experienced executives, court papers say. The latter seemed to be a reference to jewelry industry veteran Ed Dayoob, the former chief executive officer of Fred Meyer Jewelers, who was hired in October 2006 and brought in his possess management team.
In court papers, Michielutti stated that the chain’s recent acquisition of 78 Friedman’s stores also was an effort to “strengthen the overall enterprise by combining the best-performing stores of Friedman’s/Crescent” by those of Whitehall.
Friedman’s declared bankruptcy in January and began conducting store-closing sales at 377 of its 455 locations in April, with the remaining stores going to Whitehall.
Court papers commonwealth that following the completion of the Friedman’s acquisition, all Friedman’s and Crescent stores would come to be either Whitehall or Lundstrom stores, but that conversion hadn’t yet taken place.
Hurt by decreased consumer spending and with the tightening of the confidence market making it difficult to acquire new merchandise, Whitehall, “like many large retailers in this difficult economic environment, continued to experience significant losses and decreased sales,” Michielutti’s statement said.
Court papers show that for the fiscal year ended Feb. 2, Whitehall had net sales of $242.9 million, with a without deductions loss of $74.1 million.
For the in the first place quarter 2008, Whitehall’s net sales totaled $50.1 million, with net losses of about $6 million.
Amid its struggles, Whitehall “determined that they could no longer sustain viable business operations,” and already have begun exploring sale options, court papers show.
Whitehall engaged J.D. Ford and Co. to solicit bids from parties that might be interested in continuing the chain’s operations. Court papers state that JDF contacted about 100 parties, and although “several parties have expressed interest,” none were able to submit a final proposal.
In the meantime, Whitehall’s proposed financial advisor FTI solicited liquidation bids from two in posse firms, and Whitehall selected one of those offers as a “stalking horse bidder” to “establish a floor upon which bidding can occur.”
No matter which option Whitehall chooses, under the terms of its financing facility, a sale order must be entered by July 18 and, if the company chooses to go with the stalking horse bidder and liquidate, the going-out-of-business sales must start no later than July 19, court papers show.
Zale names Braverman to board
Zale names Braverman to board
June 23, 2008
Dallas—Zale Corp. has named Yuval Braverman to its board of directors, effective June 19.
Braverman, 52, is currently chairman and chief executive officer of diamond wholesaler J. and J. Zaidman, a company he co-founded in 1981. The company deals in both rough and polished diamonds and has offices in New York and in Antwerp, Belgium.
Earlier in his career, Braverman was president of Gematic International’s deal out in small portions sales division. He is a graduate of the University of Maryland.
“With nearly 30 years of experience in the rhombus industry, Yuval will contribute unique insight into the business as we strive to be the best in diamonds,” Zale Corp. Chairman John B. Lowe Jr. said in a media release issued on Monday. “With this addition to the board, we now have a full complement of members with diverse backgrounds and expertise that will help generate an taking value for Zale shareholders over the long-term.”
Zale is a specialty retailer of fine jewelry in North America operating approximately 2,150 retail locations throughout the United States, Canada and Puerto Rico, during the time that well as online. Zale’s brands embrace Zales Jewelers, Zales Outlet, Gordon’s Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at Zales.com and Gordonsjewelers.com.
N.J. jewelers blindsided by used-jewelry bill
N.J. jewelers blindsided by used-jewelry bill
June 23, 2008
By Teresa Novellino
Newark, N.J.—New Jersey jewelers are scrambling to have their voices heard by state lawmakers after belatedly attainments of pending legislation that would require retail jewelers to maintain detailed records and photos of all jewelry they buy from consumers.
Introduced on May 12 and slated for a vote as early as today, New Jersey State Assembly Bill A 2712 was designed to make it harder for criminals to wall filched jewelry.
But jewelers in the Garden State pronounce that the legislation would place undue burdens on retail jewelers and ignore other channels through which stolen goods could be sold.
“We understand the intent of the bill,” says jeweler Lisa Cohen, owner of Suburban Jewelers in Plainfield, N.J., and vice president of the New Jersey Jewelers Association. “None of us wants to aid and abet a criminal. Most jewelers are honest and ethical. If something is hot, we’re not going to touch it.”
Under the proposed legislation, jewelers would have to do the following: maintain permanent records of the name, address and telephone number of anyone who sells them jewelry; verify the seller’s identity through valid identification such as driver’s license; take photos of all secondhand jewelry purchased and keep the photos on file for at least one year; maintain the jewelry in-shop for at least 14 days and deliver a weekly report to the police department with a record of all jewelry purchased during the preceding week; and keep a record of any jewelry sold to anyone in the business of wholesaling, retailing or smelting bijoutry.
Anyone violating the law would be subject to a $10,000 fine for the first offense and $20,000 for each subsequent one. Jewelers are also charged with alerting police to anyone whom they suspect might be trying to sell stolen jewelry.
The legislation would not apply to retailers who do not exchange jewelry as a primary business or to those who do not engage in the purchase of used or secondhand jewelry “on a consistent basis,” the bill says.
New Jersey retail jewelers feel they’re unfairly being singled out.
“They’re targeting jewelers, they’ve excluded pawnbrokers, open-air flea markets they’ve excluded Web sites,” Cohen says.
A sister bill has already passed in the state Senate, Cohen says.
Jewelers in the state have been calling their local lawmakers, and Jewelers of America has also helped get the word out through an e-mail blast to members in New Jersey.
“Most things start on the local etc. and sooner or later move on to the national level,” Cohen says. “If this goes through, New York could be next.”
The record-keeping requirements included in the legislation will create an extra burden these days, as jewelers nationwide—stung by the weak economy and recent increase in gold prices—have been buying back gold jewelry from customers as a way to bring foot traffic into the stores.
“It’s a matter of survival. More people are coming into my store to sell than they are to buy,” Cohen says.
She wonders how jewelers are going to photograph more of the pieces they’re buying back.
“You’re buying baggies replete of penitent stuff,” Cohen says.
Plus, she says it will be difficult to sell pricier secondhand pieces to buyers who might not want their names and how much they spent adhering a piece to become a matter of record.
To view the bill and learn more, visit Jerseyjewelers.org.
Family assets to be seized in Fabrikant case
Family assets to be seized in Fabrikant case
June 23, 2008
By Teresa Novellino
New York—A bankruptcy judge has authorized U.S. marshals to take all necessary steps to seize the assets of the ex-owners of M. Fabrikant and Sons, including, if need be, busting into their apartments on Fifth Avenue and Park Avenue in Manhattan.
The order was issued on June 18 in response to a complaint filed in U.S. Bankruptcy Court in New York last week by the “shared assets trust,” consisting of Fabrikant lenders and creditors. The trust seeks to recoup assets it claims the former owners of Fabrikant diverted to its affiliate companies before filing for Chapter 11 bankruptcy protection, court papers said.
“In the 16 months preceding Fabrikant’s Chapter 11 filing, the Fortgang family, which owned and controlled Fabrikant, caused it to make fraudulent and preferential transfers totaling more than $100 million to affiliated companies—the affiliates—that were themselves owned and controlled by the Fortgang family,” court of justice papers said.
The judge’s order says it will seek the following amounts from each of the defendants: Charles Fortgang ($87.6 million), Matthew Fortgang ($49.4 million), Susan Fortgang ($43.9 million), Marjorie Fortgang ($16.9 million) and Theresa Fortgang ($3.7 million). The order also names 12 of Fabrikant’s affiliated companies.
U.S. Bankruptcy Court Judge Stuart Bernstein signed the order agreeing to the seizure of effects.
“Each of the attachment defendants, with some intent to defraud his, her or its creditors and/or to frustrate the inculcation of a judgment that might be rendered in plaintiff’s favor has assigned, disposed of, encumbered or secreted property or removed it from the state or is about to any of these acts,” the order said.
In a letter to Bernstein, Hunter Carter of Arent Fox LLP, an attorney for the defendants, requested a hearing.
“Our clients stand to subsist irreparably damaged by some of the provisions entered today,” the letter says.
It was unclear at press time whether or not that request had been granted.
Editor’s note: For earlier developments in this story, see Fabrikant creditors sue lenders.