At the time of writing, an intricate, platinum, flower-motif brooch set with yellow and white diamonds is gaining a profile in Australia. The Tremblant brooch is part of the National Gallery of Victoria’s Italian Jewels: Bulgari Style exhibition and is said to have been purchased by Eddie Fisher for (then) wife Elizabeth Taylor on her 30th birthday.
According to the exhibition’s description of the piece, it was part of Fisher’s desperate attempt to save his marriage as Taylor was conducting an affair with Richard Burton on the set of the film Cleopatra. Sadly for Fisher, it wasn’t enough; however, it remains as a stunning example of an increasing number of coloured diamonds entering the public consciousness.
The coloured diamond sector has received recent mainstream media attention due to record-breaking auction sales and jaw-dropping celebrity engagement rings but is this heightened awareness converting into sales and proving a worthwhile investment for jewellers? The answer is a resounding ‘yes’ for Michael Neuman, company director of Sydney-based Mondial Pink Diamond Atelier.
Neuman has specialised in selling pink and other coloured diamonds for more than 20 years and says his business has experienced an increase in demand.
“From my perspective, the market for coloured diamonds in Australia and New Zealand is fairly buoyant at the moment. Especially when you consider the overall market conditions for diamonds and diamond jewellery,” he states.
Neuman suggests there are many reasons for the rise. In addition to the auction rates and media coverage previously mentioned, he points to an increased awareness of Argyle pink diamonds, the mine’s eventual end of life as well as Tiffany & Co’s heavy marketing of yellows and a recognition of the margins offered.
“The realisation by retailers that better margins can be made selling coloured diamonds [compared to white diamonds] has meant that there are more of them in shop windows, which increases consumer awareness, interest and eventually demand,” Neuman explains. “While prices for white diamonds fluctuate, prices for natural coloured diamonds tend to increase or at least remain stable.”
This is important to note given there’s an overriding sentiment that white diamonds have become highly commoditised, often forcing jewellers to compete on price alone.
Blue Star & Kiven Diamonds director Ron Kiven says the speed at which the price of pink diamonds is rising is frightening. Propelling prices is the knowledge that operations at the Argyle diamond mine in Western Australia will cease in the next few years. No definitive date has been set but production is already declining at the mine, which produces about 90 per cent of the world’s supply of pink diamonds.
“It’s like a famous artist reducing the amount of work they’re producing,” Kiven says. “If a Picasso or Rembrandt is slowing down, people know there’s going to be less possibility of getting a painting so their work goes up [in price] accordingly. What’s going to happen when the mine ceases completely? You’d expect there to be another surge in pricing because the only way you’re going to get pink diamonds is from people re-selling their stones.”
Kiven predicts there will be a frenzy for pinks in the next five or so years, adding that the mine is generating positive attention for the local and international industry even while it is slowing down.
“I like the [Argyle] story and I think it’s very good for our industry at a time when there is a lot of negativity,” he continues. “The Argyle brand stands for something. I like the fact I’m Australian and selling an Australian product that is also the rarest item in our diamond world.”
Colours of the rainbow
The coloured diamond market isn’t limited to pinks. Argyle alone produces several other fancy colours. In fact, there are diamonds in every colour of the rainbow available in Australia and other parts of the world, even if they’re difficult to source.
One coloured diamond variety synonymous with this sunburnt country is the yellow variety.
Garry Holloway, managing director of Holloway Diamonds in Melbourne, says demand for yellows has tripled in the past few years. He offers a number of causes for the increase.
“There are many fancy yellows as a result of increased supply of yellow rough largely from Ellendale [mine] in WA,” he explains. “Secondly, Tiffany & Co, Harry Winston and other big-name retailers are heavily promoting fancy yellows.”
Holloway also believes “better cut improvement technologies that make light bounce around longer inside paler material” are helping yellow diamonds to appear “deeper and more saturated”, further increasing their appeal.
It should be noted that Tiffany & Co held an exclusive, offtake agreement with the Ellendale mine owners, whereby it had first choice on output; however, operations at the mine that normally produces almost 50 per cent of the world’s supply of fancy yellow diamonds are currently suspended after owners placed Ellendale into voluntary administration in 2015.
Deepali Sawlani, founder of Garden of Diamonds, which specialises in sourcing coloured diamonds, says there is a market in Australia for a range of colours and jewellers may be missing out by limiting their offerings.
“Local jewellers do not keep many colours; just a few Argyles,” she states, “but buyers are here in Australia and sadly they are waiting to go to the US to buy.”
Sawlani admits it’s a niche market; however, states Australians appreciate good, quality coloureds.
“They are happy compromising on carats for better colours, such as fancy intense and fancy vivid [GIA] colour grades,” she says. “Coloured diamonds under a carat but superior in colour do well in this part of the globe, especially for rarer colours such as blues, purples and greens.”
When it comes to diamonds, rarity equals value. For white stones, value is typically based on the absence of colour but it’s the opposite for coloured diamonds (See sidebar story ‘Grading Games’ on page 22).
“The discerning diamond buyer only really cares about the colour grade on the GIA report and the cutting dimensions,” Sawlani says.
While consumers may be requesting colour grades, Holloway and Neuman believe consumers lack the necessary understanding of certification and how it should inform purchasing decisions.
“Consumers know all and nothing about certification,” Holloway states. “They rightly demand and get GIA certificates but GIA has broad grade ranges, especially in the main FIY (fancy intense yellow) grade – the grading light type causes all sorts of anomalies. Some businesses are based on selling the stones that just make a grade, while others buy the very best within a grade so price shopping and comparison is a fool’s business.”
Neuman adds that poorly educated retailers compound the matter.
“Consumers are ill-informed and this is not helped by the fact that many jewellers jumping on the coloured diamond bandwagon do not have the level of understanding about natural coloured diamonds that they have about white diamonds,” he says.
“Coloured diamonds are a somewhat specialised sub-branch of diamonds and there are many details and variations of colour that determine value and quality,” Neuman continues. “These details must be learnt and understood in order to provide the correct guidance and experience to the consumer when purchasing.”
Knowledge is power
Staff training is the most important key to increasing a retailer’s coloured diamond business, says Natural Colored Diamond Industry Association (NCDIA) executive vice president Barbara Wheat.
The NCDIA is a New York-based non-profit association founded in 2003 with the aim of educating and promoting global awareness and desire for natural coloured diamonds. It has 100 members, seven of which are based in Australia.
“At NCDIA we provide marketing materials for our retail members,” Wheat says, using counter cards as one example whereby retailers can customise with their logo and store address.
Another option for retailers seeking assistance is the Fancy Color Research Foundation (FCRF), established in 2014 to improve the coloured diamond market through research and education. Australian businesses currently comprise eight per cent of membership.
“A knowledgeable and educated sales team will enhance consumers’ confidence in purchasing fancy colour diamonds,” FCRF chairman of the board of advisors Eden Rachminov explains, adding, “The FCRF offers educational tools (research papers) and sales tools (the Fancy Color Diamond Index and the Fancy Color
Rarity Evaluator), which were designed to enhance the sales process of fancy colour diamonds.”
Creating a niche
Many suppliers now offer finished, coloured diamond jewellery and jewellers are also using coloured diamonds to exercise their design skills and create bespoke pieces that cater to their customer’s desires.
Chris Soklich, director of Ellendale Diamonds Australia, which specialises in yellow diamonds sourced from the Ellendale and Argyle diamond mines, says the use of rough yellow diamonds in pieces is an up-and-coming trend that might help jewellers stand out from the crowd.
“The majority of people have never seen a rough diamond so it’s relatively new to the market,” he states. “It’s more for a bespoke design, a jeweller who wants to get a little creative and offer something a bit more unique.”
Lost River Diamonds general manager Troy Reany echoes the sentiments of suppliers everywhere when he says coloured diamonds offer retailers a point of difference for their stores.
Reany adds that jewellers need to remember the importance of promotion.
“If you’re serious about selling coloured diamonds then you have to outlay for some stock and make the pieces. Once done, display them in your window because people need to see them,” he says. “You can tell people that you buy coloured stones and provide information on your website but the reality is that there’s no denying the power of product in the window.”
World Shiner director Maulin Shah also stresses the importance of displaying pieces in the store windows.
“Jewellers have to create a unique collection and put it in the window,” he says of ways to increase sales. “They have to try; they have to promote.”
Kiven states it’s not just window displays that will set jewellers apart.
“It’s by creating a range of jewellery that caters for a number of different demographics and then using this range of jewellery to create promotions such as marketing, VIP nights and special events to differentiate themselves from their competition,” he says.
There is general consensus that coloured diamond demand will remain consistent or possibly rise in the coming year. In this competitive market, having access to product that offers jewellers a point of difference and cannot easily be price compared is surely an advantage.
In closing, Neuman offers some sound advice: “The coloured diamond market is there for everyone to share in and benefit from, so I would encourage industry members to seriously consider looking at their options to get involved; however, I would equally say that it is imperative from a consumer confidence and integrity point of view that players in the coloured diamond space make every effort to educate themselves. This is a specialised field requiring specialist experience and understanding in order to deliver the right goods.”
The committed jeweller who is able to create their own niche will surely be