The street is packed with diamond and jewellery shops, but I found it to be a profoundly depressing place. It does our beautiful product no justice whatsoever.

West 47th Street: Pile 'em high!

Diamond jewellery is piled up high with all the sophistication of apples being hawked from a market stall, and merchandised with all the romance of a 99 cent store.

Aren’t diamonds meant to be rare and precious miracles of nature? Here, they seem about as rare and precious as hens’ eggs.

There was almost no acknowledgement of the reasons why people buy diamond jewellery – the motivation that comes from a special occasion or the season.

There was no attempt to be seen to be selective or discriminating in any way, to ‘curate’ pieces into themed collections.

There was just the most basic acknowledgement of function: rings for fingers, pendants for necks, bracelets for wrists. That’s it.

I believe that part of the art of retail is to be selective, to put some thought into product pre-selection for the customer.

This is especially true with fine diamond jewellery, because (a) it’s something people buy very infrequently – perhaps just once in a lifetime – and too much choice is bewildering in unfamiliar product sectors; (b) it’s very expensive, so holding masses of stock doesn’t seem to make much sense for the jeweller; and (c) there isn’t much space available in a congested, expensive place like central Manhattan, so limited space should be used wisely, not with the wanton abandon of an out-of-town supermarket.

But there’s something worse: trust, or rather, lack of it. As I walked down West 47th Street I was assaulted from all sides by pushy salesmen and by people beseeching me to sell them my unwanted gold or jewellery.

Some of the behaviour reminded me of rather unsavoury ‘street businesses’; I felt like I was among pushers and pimps, or perhaps ticket touts/scalpers.

Now that sounds terrible and I hate saying it about this business, but I was actually looking to buy something so I was a genuine customer, and if I got that impression then I’m sure that other visitors will have the same reaction.

It doesn’t have to be this way. I happily turned my back on 47th Street and walked up Fifth Avenue, surrounded by fabulous emporia of fashion and, in some cases, fine jewellery (I checked out Cartier, Tiffany & Co., and De Beers).

Why is the jewellery business of 47th Street stuck in what appears to be the 19th century (actually, in some ways, several centuries earlier)?

Some industry people will say that it’s because they don’t have the margins to invest in fancy marketing and retail space. But you don’t need to invest anything to clear out the clutter – on the contrary it can release cash which is tied up in inventory. Lots of independent retailers create a really nice environment without spending a fortune – it can be done with little more than an ounce of imagination.

I think it’s more profound than that. It’s a trading/dealing mindset, the inability to sell on anything but price. It’s so primitive that it belongs to a time when sales and marketing meant the same thing.

Others say that it’s because of fragmentation – too many small businesses – which in turn is a symptom of an industry of family-run businesses which has never been rationalised by merger and acquisition.

Well, maybe, but I think there’s something else: the diamond business as seen in 47th Street (and to some extent in Hatton Garden in my own fair city of London) has blurred the line between B2B (business-to-business) and B2C (business-to-consumer).

It seemed to me that many of the buyers in 47th Street were not retail consumers at all; they were other diamond/jewellery people, i.e. traders, looking for something on which they could turn a profit.

Nothing wrong with that – all industries have B2B marketplaces – but perhaps the mistake in 47th Street is that the curtain is pulled back so that the wider public gets a glimpse of distinctly unromantic B2B trading behaviour which does nothing for the ‘myth & magic’ of diamonds.

Whatever the reason, it’s sad to see. I can’t imagine that it’s a pleasure to go shopping for diamond jewellery in the West 47th Street bazaar. In the end Tiffany won my business.

As I made my way further up Fifth Avenue the retail landscape improved, and at the corner of Central Park it reached its zenith: the Apple ‘Cube’ store. Now that’s retail.

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We predicted strong 2010 figures from De Beers, so I’m not going to comment much further on the headline numbers. Instead I want to look beyond the headlines at a couple of other things buried away in the press release and accompanying presentation.

Diamonds Migrate East

Unusually, De Beers included a chart showing the breakdown of diamond demand around the world.

They measure this using what they call “PWP” – Polished Wholesale Price – i.e. the wholesale value of the polished diamonds within jewellery rather than the complete retail value of jewellery (including gold, platinum, other gems…).

Anyway, it’s no surprise to see India and China doing well, but their rate of growth compared to more traditional markets is still striking. Here’s the De Beers chart:

source: De Beers Group

Going back a few years it was always a pretty good rule of thumb that the US accounted for half of all diamond demand. Technically this was 50% of diamond jewellery demand, rather than just diamonds, but the rule still worked pretty well.

But look at the US now according to the De Beers data: it’s declined to 38% – nearer a third than a half.

Last time I looked, India and China were around 4-5% or world demand, but now they’re in double-digit market share territory and still growing fast. De Beers reported demand growth last year in China and India of 25% and 31% respectively (or as their results presentation put it, “respectfully”).

It seems apt that China is now level-pegging with Japan at 11% of world demand: this week China was reported to have overtaken Japan as the world’s second-biggest economy, and we have little doubt that China (with Hong Kong) will be consuming more diamonds than Japan from this year.

The other striking thing about the chart is that Europe has gone missing. Italy always used to fly the flag for Europe in these global league tables for diamond/jewellery demand, but no more: it’s dropped off the map.

And even if London was described rather breathlessly as the “world capital of diamonds” by a local BBC report this week [may not be available outside the UK], that’s not enough to propel the UK diamond market onto the De Beers chart.

Despite having Europe’s biggest economy, the Germans have never been big diamond buyers (or indeed, buyers of big diamonds), hence the absence of Germany from the chart.

So diamonds are heading East, away from the old money of Europe and the traditionally dominant US market, and they’re being acquired by new wealth (and as an investment) in places like Hong Kong, Shanghai, Mumbai, Dubai… De Beers signpost the rise of the East quite clearly in their comment below the chart.

De Beers (sort of) diversifies

Some years ago (in my day) De Beers went on a bit of a purge of non-core businesses. It sold off or shut down various appendages and focused on finding, digging up, and selling rough diamonds.

But one or two ‘adjacent’ businesses survived the cull or have been developed over the last decade, and I’m interested in the impact that those businesses are now having on the company’s figures.

De Beers’ total 2010 sales were $5.877 billion, but Note 1 in their Consolidated Income Statement tells us that ‘Total sales of natural rough diamonds‘ were $5.082 billion.

That’s a gap of $795m, nearly $800m of sales of other things besides natural rough diamonds. Since 2004 De Beers ‘other’ sales have been in the range $607m to $786m, so we reckon that last year’s level of $795m is probably a record high.

What is this ‘other’ stuff that De Beers sells?

Well, for one thing it’s finished diamond jewellery, through its retail joint venture with LVMH, De Beers Diamond Jewellers, now a decade old and retailing through its network of around 40 boutiques in the US, Europe, Middle East & Far East. They report that sales were up by 44% last year, but De Beers have always been quite coy about sales figures for the LVMH joint venture (we guess that it’s probably around $250-300 million).

Another new revenue stream for De Beers is their proprietary diamond brand, Forevermark, now available through 348 stores across Asia, and (possibly) planning a US launch within the next 12 months. Unlike the De Beers Jewellers retail stores mentioned above, De Beers doesn’t own Forevermark product, so its revenue comes from licensing of intellectual property (plus grading – for an additional fee – diamonds which pass through the programme).

Total Forevermark retail sales since the 2008 (re-)launch were reported last October to be $200 million, but De Beers only collects a percentage of this value, probably somewhere between 5% and 10% depending upon their agreements with specific retailers and the number of Forevermark diamonds which are graded as a part of the brand.

So if Forevermark retail sales last year were – say – $150 million, then the contribution of Forevermark to total De Beers Group sales was probably in the range $10-20 million.

Lastly, and most significantly, De Beers has a subsidiary called Element6 (or E6), its business which manufactures and sells industrial diamond ‘supermaterials’, used in applications such as cutting, grinding, drilling, shearing and polishing.

According to the company, total Element6 sales in 2008 approached $500 million, but fell back by 34% in 2009. We learnt from last week’s results that 2010 was a year of ‘accelerated recovery’ for E6, with profits exceeding expectations and an EBITDA of $86 million, so it seems fair to assume that E6 is once again ‘approaching $500m’, or perhaps even exceeding that number.

So what? Where does this take us? Well, I like to think that it points to the future, or at least to one possible future.

Like all businesses, even 120+ year old businesses, De Beers wants to grow.

Growing the diamond mining business requires either (a) finding new mines; or (b) getting higher prices for diamonds from existing mines; or (c) extending existing mines, or (d) buying diamond mines from others.

De Beers can’t buy diamond mines from others for competition/anti-trust reasons, so that rules out (d), and they’re already doing what they can to maximise revenues from (a), (b), and (c), although some would argue that they can increase prices further by selling in a different way, i.e. tendering or auctioning (which they do a bit of already – very successfully -  through their subsidiary, Diamdel).

So how else to grow?

Well, those new opportunities are the obvious things to look at. Building brands takes a long time and is expensive, but both De Beers Diamond Jewellers and Forevermark might be capable of delivering hundreds of millions or even billions in revenue in the years ahead.

Certainly the De Beers Jewellery model is more easily understood than the Forevermark model, but (somewhat counter-intuitively and for legal reasons) the obvious synergy that exists between owning diamond mines and selling diamond jewellery cannot be exploited by De Beers – they have to buy their polished diamonds on the market just like most other jewellers. (By contrast, Tiffany & Co, Graff, and Harry Winston all have the advantage of being able to do deals directly with diamond mining companies – which they have done).

My bet for future De Beers growth is Element6. Its products are genuinely revolutionary in some fields (eg. optics & electronics) and there’s no doubt that it’s the world leader in manufacturing diamond material for industrial applications.

The former CEO of E6 said in early 2008 that E6 aspired to be generating $1 billion in revenue growth in the ‘next few years’. Knowing Cyrus Jilla (E6′s current CEO), he will be even more ambitous for the business.

The one giant unspoken opportunity for E6, and hence for De Beers, is laboratory-grown ‘diamonds’ for gem jewellery. They have world-beating technology in this area, and of course the wider De Beers Group knows a thing or two about marketing diamonds and diamond jewellery. Other players are ramping up in this space, and who better than De Beers, via Element6, to maximise its potential?

But there’s a problem of course: the perceived conflict of interest between diamond mining in places like Botswana, with all the revenue that diamonds bring to that country, and the emergence of a major new source for ‘diamonds’: the laboratory.

Also, De Beers and the wider diamond industry worries about confusion amongst consumers, especially if (ie. when) undeclared synthetics are passed off as the natural product. The risk is that consumers would take fright and stop buying diamonds of any kind.

But these problems can be solved, and if De Beers can’t find any new natural diamond mines, then how about a synthetic ‘mine’ that it already owns?

That’s a difficult question for De Beers, but we expect that it’ll be excercising the company’s new CEO whenever he or she is finally in place.

Now if that new CEO were to be Cyrus Jilla, current head of E6, well, that really would generate some feverish comment about the direction in which De Beers might travel…

Last week there was speculation on the web that Fabergé was about to create a brooch, shaped like a spider with its eight legs and – of course – encrusted with glittering jewels, including diamonds. Price tags of $millions were mentioned…

Not a spider. Image by Fabergé

It turned out to be not true at all, with Fabergé being forced to issue a denial through a spokeswoman, saying that arachnoid brooches are not part of the legendary Russian-Swiss jeweller’s “creative vision for elegance”.

What interested me was how Internet speculation can create spontaneous (and unearned) interest in a brand, and how the brand then responds to it.

I think Fabergé has missed a trick here. They should have turned this from a story about what they haven’t created into one about what they have created… “no we’re haven’t designed a spider but look at some of the fabulous jewels that we do have in our new collection“.

This story has been bouncing around the web for about a week now – an eternity in this social-networked age – and I can’t find any evidence that Fabergé have reacted to it in a positive and opportunistic way.

Once a bit of gossip and speculation starts to bubble up the smart thing to do is to catch the wave and enjoy the ride.

But there’s something resolutely 19th-century about so many luxury brands: they don’t want to play this game; they actively lock casual passers-by outside their reinforced walls because that’s how they manage and maintain their exclusivity.

To see what I mean, take a look at Fabergé’s website, here.

It (eventually) lures you into its world by showing you a handful of images of its product, but click on “Explore Collection” and the wall goes up: it seems that Fabergé only deigns to share its creations with registered clients.

Well, I suppose that’s fair enough up: it’s their company and they can share what they do with as many – or as few – people as they like.

And knowing that Fabergé operates out of a single boutique in Geneva I’m not surprised that they don’t want to (or can’t) keep on top of every Internet rumour, but given the power of Internet communications and social media these days it’s clear that even a modestly-sized organisation with a single boutique can make quite a splash, especially if it’s been given a head-start by speculators and it’s associated with a world-class fame name such as Fabergé.

Anyway, I think it’s a shame that Fabergé haven’t made more of this curious non-event, and I think that’s especially true because their new jewellery collection really is stunning and it deserves wider attention. Bizarrely, you can’t see it on their own site (unless you’re a registered client) but you can enjoy it here.

The 45.52 carat Hope Diamond was donated to The Smithsonian just over 50 years ago by Harry Winston, but it has quite a history over the last 300+ years.

It was brought to Europe from India in the mid-17th century by French traveller Jean-Baptiste Tavernier and at the time it was known as the Tavenier Blue, weighing 115 carats.

Its origin is not known for sure but it’s likely that the original gem came from the Kollur mine in Andhra Pradesh, India, then part of the Golconda kingdom. It came to be known as the French Blue after it was sold by Tavernier to King Louis XIV in 1669 and recut by the crown jeweller into a ‘smaller’ diamond of a little over 67 carats.

The French Blue disappeared during the French Revolution, but reappeared 20 years later in London in 1812, now re-cut to a size which matches up with the Hope Diamond. In 1839, the diamond appeared in a published catalogue of the gem collection of Henry Philip Hope, from whom it took its name.

The much-celebrated diamond is said to be cursed, but it looks fabulous in its new platinum and diamond setting. The winning design was chosen by a public vote and is called ‘Embracing Hope‘.

We think these pictures do this fabulous diamond far more justice than mere words or an extended diamond history lesson from us… so here it is: Enjoy!

images courtesy of Harry Winston (c)

It’s true that most of our customers are brides who don’t want to fake it on their wedding day – they absolutely must wear diamonds! – but that doesn’t mean that our jewellery isn’t suitable for other events too, and as we start the long run into the Christmas party season we want to shine the spotlight on our jewellery being worn at these non-bridal events, and to mention the fact that we can do special offers for midweek occasions.

We’ll get to the special offer shortly, but here’s a look at the first set of jewellery. It’s being worn tonight at a very exclusive gathering in the travel business (we’ll see if we can reveal more after the event…)

These two pieces go together beautifully and have been consistently popular as a set for weddings and for other events: the Venus zigzag necklace and the Mariana zigzag earrings.

Normally they would cost £395+£145 to hire which is a total of £540, but if they are hired together for a weekend wedding then we’ll take 50% off the cost of the earrings, bringing the hire price down to £467.50.

And here’s that special offer for mid-week events: for a Monday-Thursday night in London (where we can deliver & collect) this stunning set can be hired for just £195!

Meanwhile, elsewhere in London this week, another lucky lady (a BBC TV presenter) is going to be dazzling her guests with this stunning ensemble:

Here we see the Aphrodite bangle, the Eros journey pendant, and the ever-popular Lakshmi peardrop earrings.

This little lot in theory costs over £600 to hire for a weekend wedding (although, as before, we would offer the second and third pieces at half price), but for a midweek evening we can make these pieces available for as little as £245.

So if you’ve got some party or corporate bash coming up and it’s a mid-week evening in or around London then why not make the best possible impression by adorning some stunning diamond jewellery?

For a mid-week event, we can usually do much better than the price you see published on this site, even at short notice (subject to availability, of course).

And if there’s some great PR angle to a mid-week event then we might even be able to lend you our diamonds for absolutely nothing!

Get in touch and ask us about our special midweek prices for your party, corporate dinner, charity ball, or other special event.

Courtney kindly sent us a couple of images from the shoot, so here they are:

www.courtneylouisephotography.co.uk

As it turned out, we didn’t get investment into the business in the Den, but we’re not going to let a thing like that hold us back!

Anyway, at least the Diamondthrills pitch was easy on the eye and — as Evan Davis’ voiceover put it — added a touch of glamour to the Den.

Our model for the day, Amanda, was adorned by four of our most beautiful pieces of diamond jewellery.

Amanda wore: the Hestia tiara, the Lakshmi earrings, the Aphrodite bangle, and the Eros pendant.

All four pieces are pictured below.

That’s a total of around 600 diamonds, with a total carat weight of about 21 carats, and a retail value of more than £50,000.

We took along a few other pieces too – there was lots of interest in our Flora daisy-chain necklace – but despite all our dazzling diamonds the Dragons could not be persuaded to part with their cash.

Would I do it again?

Yes – with a more aggressive business plan and some more aggressive answers to the Dragons’ questions, I would certainly venture into the Den again.

Does the fact that the Dragons didn’t invest make jewellery rental a bad idea?

Absolutely not!

We continue to generate a lot of interest from brides, from other weddings suppliers, from the press, and also from women going to parties, business events, charity balls and other special occasions.

We’re confident that hiring fine diamond jewellery is the great new way to experience the luxurious thrill of diamonds: we give you access to hundreds of thousands of pounds worth of stunning diamond jewellery in a flexible and affordable way.

If you saw the show we would love your feedback – please comment below!

You can see some of the results in Rima’s new video documentary here:

We loved working with Rima – a real professional with a great eye for colour and the little details that make a picture special, including of course, our diamonds.

In the footage the model is seen wearing seven of our exquisite pieces (but not all at once…): the Hestia tiara, the Aphrodite bangle, the Turan earrings, the Venus necklace, the Mariana earrings, the Isis bracelet, and the Isis earrings.

You can view Rima’s lovely photographs on her new website and on her Flickr photostream, and more of Amish Solanki’s video work on his Vimeo page.

Full credits:
Model: Sam B
Makeup Artist: Henna-H Bridal
Stylist: Purdip Mutti @ Jasmanique
Outfits: Jasmanique.co.uk
Photographer: Rima Darwash
Cinematographer: Amish Solanki
Location: Dorset Square Hotel, Regents Park, London

The Royal Exchange in the City of London

At about 10pm on Saturday night a red BMW drew up outside a back entrance of the Royal Exchange.

Robbers then managed to get past the building’s wrought iron gates before reportedly using sledgehammers to smash their way into the De Beers and Omega boutiques, grabbing diamond jewellery and luxury watches before making off in the BMW.

It’s understood that an alarm went off at nearby Tiffany & Co but it’s not thought that anything was stolen from there.

The Royal Exchange is just yards from the Bank of England in the financial heart of the City of London.

It was founded in 1565 by Sir Thomas Gresham as a centre of share-dealing commerce for the city, but these days it acts as an upmarket shopping centre for well-heeled bankers and City traders.

The timing of the raid was well chosen: Saturday night is about the only time of the week when the area is quiet, with City traders away from their desks as the world’s markets are closed.

Police are studying CCTV footage and have appealed for help from the public to trace the car, the stolen items, and the raiders. Pending a stock take by De Beers and Omega, no details have yet been released on the stolen items or their value.

This incident follows last year’s record-breaking raid at Graff in Mayfair in which a reported £40m in gems and jewellery were stolen and for which 4 men were sentenced to a total of 71 years in prison earlier this month. The gems were never recovered.

Last August another London raid netted raiders £1m in jewels in less than a minute in a daylight smash & grab at Mozafarian jewellers, located near Harrods in Knightsbridge.

This is the second such incident in London for De Beers this year, following the £2.5m ‘sledgehammer raid‘ at their shop (as well as Tiffany & Co) across town at the Westfield shopping centre in May.

In the wake of that attack the CEO of De Beers jewellery stores, François Delage, commented that this was “yet another reminder of the timeless allure of diamonds”, which showed an admirable talent for turning a crime into a marketing opportunity for diamonds.

Update, 17th August 2010: Police now say that the retail value of the stolen jewellery is around £380,000. This is a slightly more sober assessment of incurred losses than some press reports yesterday which mentioned figures as high as £4 million.

Speaking of peculiar press reports, the front page of yesterday’s Daily Mirror caught my eye:

Apart from the entirely speculative statement “Gang steal £1m gems at shops“, I fail to understand the headline: “De Beers Monsters“.

Is that some sort of pun? Am I being thick?

I don’t see how De Beers can be called monsters as a result of being robbed, even by the Daily Mirror. Am I missing something?

If you can shed some light, please comment below…

UPDATE: they’ve made some arrests. Two of the alleged culprits are named and shamed here.

** Spoiler Alert! If you really don’t want to know how the film ends then don’t read on! **

Still with me? Good.

In the final scene, Big gives Carrie a diamond ring and tells her, “Because you’re not like anybody else“.

The diamond ring is somewhat unusual in that it features a 5 carat black diamond (pictured, right).

The ring was created by designer Itay Malkin, and in addition to that eye-popping 5 carat black diamond, it features 80 round pavé-set white diamonds weighing a total of 0.35 carats. The diamonds are set in 18 karat white gold.

Black diamonds are unusual but they are becoming more fashionable (and this placement in SATC2 will of course add to their popularity).

The blackness in natural black diamonds is caused by millions of microscopic inclusions spread throughout the stone.

Some natural black diamonds are referred to as carbonado diamonds (a Portuguese word – they were found in Brazil and the Central African Republic), and there was a theory doing the rounds a couple of years ago that these diamonds came from outer space, falling to Earth in a meteor 2.3 billion years ago.

Another theory has it that black diamonds were formed during shock metamorphism – the result of an explosive meteoric impact on the Earth’s surface.

More prosaically, black diamonds can be created in a laboratory (although these technically should not be referred to as diamonds) or as a result of special treatments that can be applied to more common non-black diamonds.

In any event, thanks to the inevitable commercial spin-off from the SATC2 movie, fans can buy one of a limited edition of ‘identical’ rings for $10,000 from designer Itay Malkin or the film’s costume designer Patricia Field.

Given that a 5 carat diamond ring would normally cost a lot more than $10,000 (we just checked a leading online supplier, and the minimum price for a 5 carat diamond was over $50,000), we can’t help but wonder just how natural and ‘diamond-y’ these $10,000 rings really are…

We say: Caveat emptor! But then Hollywood is all about illusion, fakery & pretence, right?