Luxury Spending Up in 2005

In 2005 the typical luxury consumer spent $52,588 buying luxuries, up 3.8 percent over the average amount spent in 2004 of $50,640, according to Unity Marketing.

Aggregate results from 25 leading global luxury marketers show an average revenue growth of 10.9 percent for the year 2005.. Growth for 2004 was higher at 14.5 percent. Overall the luxury market in the United States reached $1 trillion in 2005 (up 12 percent from 2004,) a figure that includes jewelry.

In 2005 the dominant trend in the luxury market was a shift in spending more – significantly more – on experiential luxuries; in other words, the things people do rather than material goods one has or one owns. The typical luxury consumer spent $22,746 on experiences in 2005, that is nearly double what they spent in 2004. Luxury consumers also spent nearly 20 percent more buying luxury automobiles, a highly experiential luxury good.

While spending on experiences and automobiles went up, luxury consumers spent less overall on home luxuries, down 4.6 percent to $19,990. Spending on personal luxuries like luxury apparel, fashion accessories, jewelry and watches, wine and spirits, pet luxuries and pens and desk accessories, rose 5.6 percent to $10,007 in 2005. A moderating factor in the growth of personal luxuries is that the super-affluent households (incomes $150,000 and above) didn’t hold up their high 2004 spending levels, while spending on personal luxuries among the near-affluent ($75,000 to $99,999) and the affluent ($100,000 to $149,999) increased at a significant rate.

Laser Inscription Of Diamonds. Update.

Laser inscription of diamonds has taken on greater popularity over the past several years.

Typically it entails the inscription of the lab report number and perhaps a company logo which serves as a means of identification.

Lazare Kaplan pioneered in the development of this laser technology. Since then several other companies have attempted to develop laser inscription machines in order to capture the growing demand for this service.

In a recent announcement, lazare kaplan has filed a suit against Photoscribe Technologies alleging infringement of patent for the laser inscription of gemstones. PhotoScribe’s president and CEO David Benderly said his company holds seven patents relating to diamond marking and that the lawsuit is “totally without merit.”

PhotoScribe Technologies introduced its first diamond inscription laser in 1999, “after doing its due diligence,” according to Alan Israel and Martin Schiffmiller, partners in the New York City patent law firm of Kirchstein, Ottinger, Israel & Schiffmiller, P.C. “After a thorough patent search, we gave PhotoScribe our assurance that the company was not infringing on any existing patents,” said Israel and Schiffmiller.

Projections are that in the next five years, every stone from one fifth carat on up would be marked with some inscription, such as a lab name and certificate number, a manufacturer’s SKU, or a brand logo.

Gold Jewelry Sales Are Up.

National Jeweler reports that despite rapidly rising gold prices, U.S. gold jewelry sales grew in terms of both dollar and unit sales for 2005, according to new statistics from a survey commissioned by the World Gold Council (WGC).

Dollar sales grew 4.4 percent for the year to a record $17.7 billion, the strongest growth for the category since 1999, according to the study, conducted for WGC by GfK Audits & Surveys. In the fourth quarter of 2005, gold jewelry sales rose 5 percent in dollar sales.

For 2005, gold unit sales grew 4.4 percent over 2004, while the average price per unit remained constant at $76.01.

Gold bracelets appeared the strongest category, with unit sales increasing 6.6 percent and dollar sales up 6.5 percent. Gold neckwear posted a 4.1 percent increase in dollar sales, the strongest growth since 1995. Gold earrings continued their 10-year growth streak, with a 5.5 percent boost in dollar sales.

Accounting for 9 percent of market share, non-store retailers showed the highest percentage increase in gold jewelry sales, with a 7.1 percent increase in sales volume (totaling $1.7 billion) and a 6.7 percent rise in unit sales.

With 49 percent of market share, traditional jewelry stores saw a 3.9 percent increase in gold jewelry sales (totaling $8.63 billion) and a unit sales increase of 3.2 percent.

Mass merchants grew their gold business 5.1 percent for the year in dollar terms to $4.07 billion and 4.9 percent in terms of unit sales. For department stores, dollar sales volume rose by 3.7 percent to $3.36 billion and unit volume increased by 3.1 percent.

Zales Searching for New CEO.

Zale Corp. has narrowed its search for a new chief executive to two leading candidates from outside the jewelry retailer, though a final decision likely won’t be made for several weeks.

Mary “Betsy” Burton, a Zale board member who assumed the interim CEO job upon Mary Forte’s dismissal in January, said Thursday that the search remains open though Zale has identified “a couple of excellent candidates.”

Burton added that a Securities and Exchange Commission investigation of Zale’s accounting announced last month hasn’t deterred candidates in the search pool. Even so, an announcement isn’t imminent.

“There is a concern that we’re in the throes of finalizing holiday (strategies),” Burton said in an interview. “To put someone else in at such a critical juncture might actually be more disruptive.”

Irving, Texas-based Zale, a retailer of diamonds and jewelry, collects most of its net in the Christmas quarter, its fiscal second. Zale ranks as the No. 2 specialty jewelry retailer in the United States by marketshare behind Sterling Jewelers Inc., the U.S. arm of London-based Signet Group PLC. In the United States, Sterling operates the Kay Jewelers and Jared the Galleria of Jewelry brands. Also in the U.S., Zale operates Zales Jewelers; Zales Outlet; Gordon’s Jewelers; Bailey, Banks & Biddle; and Piercing Pagoda.

Forte, Zale’s CEO since 2002, resigned in January after a strategy to shift flagship brand Zales Jewelers to a more fashionable, upscale clientele tarnished the retailer’s holiday results. Following her out the door were Zales Jewelers President Paul Leonard in February and Chief Operating Officer Sue Gove in March. Zale issued the three nearly $13 million combined in severance pay

Israeli Diamond Auction.

One of the highlights of the 32nd World Diamond Congress to be held in Tel Aviv from June 26-28th, will be the largest auction of diamonds, precious gems and jewelry ever to take place in Israel.

Organized by Tzoffey’s, an Israel-based company that is a leading auction house to the diamond and jewelry trade, the event will offer up to 450 rare items, with a total value of up to $50 million.

The auction will take place at the conclusion of the Congress on June 28, 2006 at the Tel Aviv Hilton.

Tribute to Bill Goldberg: Mr. Diamond!

Father’s Day (June 18, 2006.) will be a very special day for those of us in the Diamond Industry here in New York.

New York City will honor the legendary Bill Goldberg by renaming East 48th Street, between Fifth and Madison avenues, as William Goldberg Way. The street renaming ceremony will take place at noon on June 18.
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“He was the face of our industry for so long, a father to so many more than just us,” said Goldberg’s daughter Eve, who is also the vice president of sales and marketing of the William Goldberg Diamond Corporation.

“My father was the most incredible teacher,” she said, “I know my father would be very proud.”

Undoubtedly William Goldberg would also be proud of how his family continues to carry on his vision. “My father taught us the importance of integrity, honesty and how essential it was to love what we do,” said Goldberg’s son Saul, who is the president of the firm. “His passion and charisma was infectious. This memorial to my father is such a tribute to his life.”

Senator Charles Schumer (D-NY) is expected to join the Goldberg family for the dedication ceremony. The sign will sit just below the building of William Goldberg’s corporate offices where Goldberg worked to build his company into a prestigious diamond house.

William Goldberg served as the president of the New York Diamond Dealers Club from 1978-1984, and he is given much credit for supporting women in the diamond industry, opening up the Dealers Club to the media, and making 47th Street a safer and cleaner business area. He was also known for his philanthropic efforts raising funds for the United Jewish Appeal, the Gesher Foundation, Yeshiva University, and the American Society of Yad Vashem.

Known for his love of beautiful stones, William Goldberg founded his own company in 1973 after he split off from Goldberg & Weiss. The company continues with the next generation — run by his wife Lili and children, and son-in-law Barry Berg. His daughter Deborah also worked by his side for more than 20 years.

“Bill had the greatest ability to make an impression on someone,” said Berg, “even if he met them for a short period of time.” Berg is vice president of William Goldberg. “He always had something interesting to say, and it always made an impact.”

The William Goldberg brand is synonymous with the most renowned gemstones in history, including the extraordinary Premier Rose, the 137 carat ‘D’ flawless pear shaped diamond, the 89 carat Guinea Star, and the 5.11 carat Red Shield, the largest red diamond ever graded by the Gemological Institute of America.

I had the privilege of polishing and cutting in Bill Goldberg’s factory for ten years. A truly incredible Man. May his Memory be a Blessing.

Gold Bites Man!

Nothing stays up forever, not even with Viagra.

The Gold balloon which saw it’s price up and over $700 just two weeks ago burst with a loud pop today as Gold sustained heavy losses as a wave of investor selling dragged down gold prices by four percent and silver by five percent.

Gold’s failure to break key levels prompted players to take profits despite earlier weakness in the dollar, which generally makes the metal cheaper for holders of other currencies. The dollar later ticked higher.

“Investors are extremely jittery. Overall, the market is going to do some consolidation work here before we make the next attempts on the high side,” a dealer in London said.

“Prices are going to bottom out around $635-$640 an ounce,” he added.

Gold traded in a broad range, extending the volatile moves that saw prices hit a 26-year high of $730 on May 12, which compared with the record peak of $850 in early 1980.

Gold was quoted at $647.50/649.00 by 1429 GMT after falling as low as $645, against $672.10/672.90 late in the U.S. market on Tuesday.

The metal tried to break Tuesday’s high of $673.60, touching $670.50 before it retreated.

Interesting to note that the Oracle of Omaha, Warren Buffett, one of the worlds shrewdest investors divested his Silver holdings a short time ago before the bubble burst today. In the immortal words of Kenny Rodgers, “ya got to know when to hold ‘em and when to fold ‘em”.

Jacob The Jeweler Named Year’s Trendsetter.

Celebrity jeweler Jacob Arabo, the founder and CEO of Jacob & Co., has been named the jewelry trendsetter for 2006 by Modern Bride magazine.

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According to a media release from Jacob & Co., Arabo (aka “Jacob the Jeweler”) has been recognized by the publication as having “shaped, influenced, re-imagined and in general, elevated the world of weddings to a whole new level.”

In particular, it said he’s known for transforming bridal with his use of bright colors and modern-shaped diamond solitaires. Jacob & Co. was the sole fine diamond jewelry designer to be recognized among a group of 25 design trendsetters such as Kate Spade, Monique Lhuillier and Stuart Weitzman.

Arabo said his designs are inspired by the lifestyles of his famous clients, who include David Beckham, Justin Timberlake, Bono, Jessica Alba, Madonna, Sir Elton John, Naomi Campbell, Sean Combs and Derek Jeter.

DeBeers Sues Diamond Merchant Over It’s Name.

DeBeers is suing and going to Court.

A federal court hearing is schedule in Manhattan on May 30, 2006, for use of the trademark name De Beers (and DeBeers) online. According to De Beers, diamond merchant Marvin Rosenblatt purchased some three-dozen variations of “debeers” as part of Internet domain names under his incorporated firm DeBeers Diamond Syndicate Inc.

De Beers sued Rosenblatt for violating the Lanham Act on June 1, 2004, for “unfair competition and trademark dilution violations under New York law,” according to the court papers. De Beers claims it is the rightful owner of the brand name along with “luxury goods” partner LMVH Moet Hennessy Louis Vuitton. The partners are the sole owners of De Beers’ trade identity in the retail diamond and luxury goods arena of the United States, De Beers states in court documents.

Rosenblatt incorporated DeBeers Diamond Syndicate in the state of Delaware September 10, 1981. In December 2001 he registered nearly three dozen domain names, and filed (as a trademark) in January 2002 the words: DeBeers Diamond Syndicate.

While the original court documents filed by De Beers show that it is in the business of selling both diamonds and luxury goods, the De Beers LV trademark application in the United States is not quite as clear and lists “luxury goods.”

De Beers LV owns and operates two retail diamond stores in the United States, one at Fifth Avenue and 55th Street in Manhattan, and a second store at 401 North Rodeo Drive, in Beverly Hills, California.

Chopard Watches: Quality Counts.

Reported by “The Nation”:

At Chopard’s watch and jewelry factory in Fleurier, Switzerland, a craftsman carefully places a tiny diamond onto a ring. He has a tray of diamonds before him and relies upon a microscope to assist in manual assembly work.

It is meticulous craftsmanship, requiring the highest technical skills and sharpest eyes. Beside him sit dozens of artisans, all involved in the delicate handiwork. If their eyes get tired, they have the luxury of relaxing them by gazing at the majestic Alps before them.

Indeed the Alps are the perk for some 600 workers at the watch and jewelry factory of Chopard. Unlike most other watchmakers and jewelers, Chopard seeks to be self-sufficient in components and parts so it can control the cost and quality of what goes into the final assembly of products. Its factory produces about 95 percent of all its parts for watches and jewelry.

Chopard is one of the few remaining family-owned businesses in the Swiss timepiece industry.

Company president Karl Scheufele said that the strength of his company was surely flexibility and ability to react quickly.

“This is especially helpful when there are dark clouds on the economic horizon, as now in Europe. Our products and company policies can adapt to the constantly changing socio-economic and political situation in any region immediately. As a result, we don’t suffer as much as the big groups, and we don’t have to suddenly panic and fire top management as some big groups do,” he said.

“Our weakness is our capital, limited to the means of our company and family. We are not listed on any exchange, and we cannot depend on outside capital. This is why we have to grow step-by-step in production and distribution. For example, we only open five or six boutiques a year and not 50 at one shot. This is why we cannot grow as fast as we wish.”

Like all Swiss watchmakers, Chopard, one of the makers of the most luxurious watches, with a company history dating back to 1860, has suffered from counterfeits. And the problem here is not about wristwatches costing $150, but fakes that can deceive a customer into shelling out $2,000.

“Most of them are made in China and Turkey, and the buyers don’t know that until the watch malfunctions and they come to us. We have to tell them that we can’t fix it as it’s not our product. It causes great confusion,” said Christine, one of the five members of the family that owns Chopard.

Reflecting her notion is the fact that at 95 boutiques, including one in Bangkok, Chopard timepieces command several thousand dollars, even if they’re not a limited edition.

Ironically Asia, where most of the fakes are made, is becoming a high-potential market for the company. By country, the United States is Chopard’s biggest customer, followed by France. Regionally, Europe is the top spot.

Amid stiff competition and the threat of counterfeits, Chopard has thrived by protecting its image, developing innovative designs and diversifying into jewelry.

“Happy Diamonds” is now the collection that is focusing attention upon the company. The watches have dazzled buyers with a double-layered crystal dial in which small diamonds are cleverly inserted and sealed.

Though introduced only 30 years ago, the jewelry business at Chopard now makes up half of the company’s total sales, and all of its products come from its two plants in Geneva and Fleurier and one in Germany.

As long as affluent customers value uniqueness, Chopard will continue to prosper. It is one of the few family businesses in the Swiss watch industry, and it intends to stay that way.