Rapaport Weekly Market Comment May 30, 2014

JCK Las Vegas show opens amid rising U.S. consumer confidence. Dealers hoping the show will set the stage for strong U.S. holiday demand. Diamond markets stable but buyers are very price sensitive. Indian manufacturers slowly returning from vacation while liquidity concerns persist. Indian jewelers hoping new government will ease gold import rules to help stimulate demand. Signet buys Zale for $21 per share. Shrenuj & Co. FY revenue +20% to $775M, profit +22% to $15M. Christie’s HK sells $92M (81% by lot) with pair of 25.49ct. and 25.31ct., D, IF, type IIa diamonds for $9.7M ($191,746/ct.). WDC agrees to finance and operate KP administrative support.

RapNet Data: May 29

Diamonds 1,076,671
Value $6,890,857,602
Carats 1,201,547
Average Discount -26.85%

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RAPAPORT ANNOUNCEMENTS

May-Jun 29-2 Thu-Mon

Rapaport Jewelry Sale

Las Vegas

View Details.
June 1 Sun
Rapaport Breakfast & Conference at JCK Vegas
Mandalay Bay Resort

8 a.m. to 10 a.m. | South Seas Ballroom
Breakfast and Martin Rapaports State of the Diamond Industry presentation.

10:30 a.m. to 12:30 p.m. | Banyan Ballroom
Rapaport Certification Conference with RapNet insights into grading reports.

2 p.m to 4:30 p.m. | Banyan Ballroom
Rapaport Fair Trade Conference

Register; or email conference@diamonds.net or call 1.702.893.9400. These events are free but seating is limited.
June
2-11
Mon-Wed
Rapaport Single Stone Auction
New York & Israel
www.rapaportauctions.com

QUOTE OF THE WEEK

As an independent, global public-benefit organization, the GIA is in a unique position to foster sustainable development in gem producing regions. I look forward to working with GIA’s stakeholders for the benefit of the ultimate consumer and the people and communities who are such an important part of this industry.

Brad Brooks-Rubin | Gemological Institute of America

Careers@Rapaport 	  

The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp and Mumbai. View jobs now.

RETAIL & WHOLESALE

Zale Shareholders Approve Merger 

Zale Corporations shareholders approved merging with Signet Jewelers Ltd. for $21 per share. Insiders say the shareholder meeting in Dallas was sparsely attended. Neither company had issued a statement as of press time. TIG Advisors, a major shareholder in Zale that opposed the buyout, told the Dallas Morning News that they were disappointed with the merger and had "made a good case to investors that Zale" would grow on its own. "The turnaround story was working," portfolio manager Drew Figdor told the newspaper.

Ike Boruchow, an analyst with Sterne Agee, said in a note to clients that the marriage between Zale and Signet was favorable for both parties, as the combined business will have strong 16% to 17% share of the specialty jewelry retail market, with substantial synergies/accretion for the combined business. "Given elimination of the biggest overhang on the stock and the material earnings power of the new company, $10.50-plus of earnings per share (EPS) by 2017, Signet remains our top pick," Boruchow wrote.

Christies Jewels Sale Achieves $92M

Christies Hong Kong sale of magnificent jewels achieved $91.9 million and was 81% sold by lot, but fell short of a presale estimate of $100 million. One of the top lots, a rare Golconda diamond necklace named the "Eye of Golconda," remained unsold. A world record for an intense green diamond was achieved for a 6.13-carat, VS2, fancy intense green cushion-shaped diamond ring at $3.6 million or $594,510 per carat.

The top lot of the sale was a pair of 25.49 and 25.31 carat, D, type IIa diamond ear pendants, which sold for $9.7 million or $191,746 per carat to an Asian private buyer. The second top lot was a 9.38-carat, pear-shaped, fancy intense pink diamond ring which achieved $5.96 million or $636,117 per carat. A jadeite bangle achieved $5.2 million, while a 26.20-carat, D, flawless, type IIa, brilliant-cut diamond fetched $4.95 million or $189,828 per carat. A 12.93 carat, VS2, rectangular, fancy orangey-pink diamond by Harry Winston achieved $3.6 million or $281,852 per carat.

Shrenujs Profit +22%

Shrenuj & Company Ltd. reported that revenue jumped 20.2% year on year to $774.9 million (INR 46.4 billion) in the fiscal year the ended on March 31. The companys profit increased 22.3% to $15 million. By segment, diamond revenue increased 26.5% year on year to $669 million, while studded jewelry sales rose 9.9% to $127 million. Intersegment sales, which are deducted from total revenue, jumped 217% to $26 million.

The board of directors proposed a dividend of 30%, subject to the approval of the shareholders. Based on the companys fiscal year performance, and a positive outlook for this year, the board also proposed a bonus issue of shares on a 1-for-1 ratio, subject to approval.

U.S. Consumer Confidence Rises

The Conference Board Consumer Confidence Index®, rose to 83 points (1985=100) in May, up 6.8 points from one year ago. The Present Situation Index increased 13.7 points to 80.4 and the Expectations Index edged up 2.4 points to 84.8. Lynn Franco, the director of economic indicators at The Conference Board, observed that the labor market appeared to be more favorable in May, providing a boost to U.S. consumer confidence.

Silver Jewelry Fabrication +10%

The Silver Institutes 2014 World Silver Survey concluded that global silver jewelry fabrication rose 10% year on year to 198.8 million ounces, representing a record high. The report cited stronger economic conditions this past year across the industrialized world, which lifted consumer sentiment and in turn boosted retail sales of silver jewelry products.

Silver jewelry fabrication in India in 2013 increased by an estimated 29% year on year, according to the Silver Promotion Service. Chinas demand registered double-digit rates of growth, setting a new record, while North America’s silver jewelry manufacturers produced 22.8 million ounces, representing an increase of 11%.

PhotoScribe Receives New Patent

PhotoScribe Technologies Inc. was granted a patent for its light performance system (Patent No. US 8,705,018 B2) accounting for six attributes: brilliance, fire, scintillation, contrast, optical symmetry and coverage. The light performance system quantifies the efficiency of a diamond’s interaction with light, which translates to measurable diamond beauty. David Benderly, the CEO of PhotoScribe Technologies, said, "PhotoScribe is a company dedicated to innovations. We are focused on adding value to our customers by solving real industry challenges. The current patent is a nice validation of this effort."

Kingswood Creates Non-Chemical Solution

The Kingswood Company developed a new private-label cleaning formula, The Kingswood Company’s Natural Jewelry Cleaner, which is an all-biological, eco-friendly jewelry cleaning option. This represented only the fourth formula to be introduced, joining Kingswood’s trade-secret Fine Jewelry Cleaner, Gentle Jewelry Cleaner and Silver Jewelry Cleaner jewelry cleaning formulas. The company embarked on a research and development process that resulted in the non-chemical jewelry cleaning formula to meet strong market demand.

NWT Diamond Centre Opens

Crossworks Manufacturing Ltd. held a grand opening of its NWT Diamond Centre in Yellowknife, Northwest Territories (NWT) of Canada. The facility includes a small theater room and a number of exhibits. Visitors to the facility may purchase diamonds that have been mined, cut and polished in the NWT and the space will also carry Forevermark diamonds. The new center provides an opportunity to raise public awareness of the NWT’s socially and environmentally responsible mining practices and world class diamonds produced in the territory.

CIBJO Pushes to Integrate Fairtrade Gold

Fairtrade International and CIBJO signed an agreement to improve certified Fairtrade gold supplies to the jewelry markets and members of CIBJO-associated organizations. CIBJO commits to facilitating and encouraging its members to adopt and integrate Fairtrade gold and precious metals into their national supply chains.

CIBJO and Fairtrade will work together to provide measurable developmental impact for small-scale and artisanal mining communities, and develop educational programs for CIBJO members and the greater jewelry industry. In working with artisanal mining sector, Fairtrade aims to formalize small-scale mining; eradicate mercury usage, thereby enhancing the state of the environment and public health; ensure that participants comply with internationally agreed-to conflict-free protocols; and eliminate both child and forced labor.

Brooks-Rubin Joins GIA

The Gemological Institute of America (GIA) appointed Brad Brooks-Rubin as global director of development and beneficiation. Brooks-Rubin joins GIA’s development team and will work with nongovernmental organizations, trade groups and government agencies to advance GIA’s beneficiation initiatives in gem-producing regions.

Brooks-Rubin previously served as special adviser on conflict diamonds to the U.S. State Department and he has extensive international experience working with industry, government and civil society on issues related to conflict minerals and gems. He joins the GIA from the law firm Holland & Hart LLP, where he counseled international clients on trade sanctions, export controls and international trade law and regulations.

EGL Intl. Defends Grading Quality

EGL International said that Genesis Diamonds in Nashville, Tennessee was the subject of a TV news report, which claimed that the labs diamond grading reports overstated the quality of the stones. EGL Intl. was not contacted by the news agency to respond but added that different grades for the same diamond from several different labs does not mean the labs made a mistake as it is simply the nature of the business.

The company added that it works to ISO 9001 and IQ Net standards, it operates with the World Federation of Diamond Bourses WFDB Mark and has, over the years, invested hundreds of thousands of dollars in state-of-the art technology that detects any type of treatment, as well as synthetics and chemical vapor disposition (CVD) stones and determines the origin of fancy color diamonds.

Group CEO Guy D. Benhamou said, "We put a great deal of emphasis on grading the color of the diamond face up because that is how a diamond is seen when it is worn, whereas other labs attribute most of the color grade to the face down position."

MINING 	  

Lukoil Preps to Mine Grib

Lukoil expects to mine the Grib diamond pipe in June, resulting in diamond production in August or September, according to Interfax. Lukoil has invested about $1 billion in the project; but since diamonds are a non-core business, the company would entertain an offer from ALROSA, according to the report. The Grib pipe was discovered in 1996 and is estimated to hold 98.5 million carats.

Paragon Narrows Loss 

Paragon Diamonds narrowed its fiscal year loss to $2.2 million (GBP 1.3 million) in 2013, compared with $8.6 million one year earlier. The explorer recorded no revenue for the year, but said it is close to securing funds to commence initial production at its open-pit Lemphane kimberlite in Lesotho in late 2014. Initial mining at Lemphane is projected to generate annual revenue of $8 million over a two-year period and will see the company target 20,000 carats with an estimated average value of $750 per carat.

Zim Directs Diamond Sales to RBZ

Zimbabwe told diamond miners to sell production through the Reserve Bank of Zimbabwe (RBZ). The permanent secretary in the Ministry of Mines, Francis Gudyanga, reportedly stated that RBZ will use the diamonds to secure a government loan. Diamonds must be sorted and evaluated with the Minerals Marketing Corporation of Zimbabwe (MMCZ), which is on the list of U.S. sanctions. The government has indicated it seeks to consolidate diamond operations in the Marange area. Currently Anjin Investments, Diamond Mining Company, Gye Nyame, Jinan, Kusena, Marange Resources and Mbada Diamonds operate in the region.

Rockwell Narrows Loss

Rockwell Diamonds reported that revenue rose 39% year on year to $41.6 million (CAD 45.2 million) in the fiscal year that ended on February 28. The average per carat value of rough diamonds sold rose 13% to $1,484, while the volume of carats sold rose 27% to 26,272 carats. Rockwell narrowed its fiscal year loss to $9.6 million compared with a loss of $12.7 million one year ago. Diamond production during 2013 grew 27% to 27,776 carats.

Botswana Diamonds Secures New Licenses

Botswana Diamonds received five new prospecting licenses in the Orapa region of Botswana, covering 1,357 square kilometers and will be explored as part of the ongoing joint venture between the company and ALROSA. The licensed areas were identified as a high priority. Little exploration has been conducted on these areas with no known kimberlites to date. ALROSA believes the ground has kimberlites and technology will be able to pinpoint exact location.

Stornoway Concludes Offerings

Stornoway Diamond Corporation closed its public offering of 188,600,000 subscription receipts at a price of 70 cents each, for proceeds of $132 million. The subscription receipts are trading with the ticker symbol SWY.R on the Toronto Stock Exchange (TSX). Stornoway also closed a private placement of 345,539,916 subscription receipts at 70 cents each for proceeds of $242 million. The closings were an important milestone and a precondition for completing overall project financing agreement for the Renard diamond project. Stornoway will hold a special meeting on June 26 for shareholder approval.

Firestone to Build Main Plant at Liqhobong

Firestone Diamonds will begin building the main treatment plant at its Liqhobong diamond mine in Lesotho, starting construction of the early earth works on the project in the coming weeks. The work will be funded using $225.2 million the company raised through an Absa debt facility, share subscriptions and a mezzanine facility agreement. The company also entered into a new mining lease with the government of Lesotho, which will govern the terms under which it can mine diamonds at Liqhobong.

ECONWATCH 	  

Diamond Industry Stock Report

U.S., Hong Kong and European shares were little changed this past week with Kohls (+2%) and Zale (-3%) defining the spread. Indian shares were all lower except for Classic Diamond (+21%) after strong increases the previous week. Gains outnumber losses for mining shares with Peregrine (+7%) and Gem Diamonds (-2%) the noteworthy movers. View the extended stock report.
May 28 May 22 Chng.
$1 = Euro 0.736 0.730 0.006
$1 = Rupee 58.93 58.39 0.5
$1 = Israel Shekel 3.48 3.48 0.00
$1 = Rand 10.46 10.33 0.13
$1 = Canadian Dollar 1.09 1.09 0.00

Precious Metals
Gold $1,258.70 $1,294.90 -$36.20
Platinum $1,447.00 $1,486.00 -$39.00

Stock Indexes Chng.
BSE 24,566.09 24,374.40 191.69 0.8%
Dow Jones 16,633.18 16,543.08 90.10 0.5%
FTSE 6,851.22 6,820.56 30.66 0.4%
Hang Seng 23,080.03 22,953.75 126.28 0.6%
S&P 500 1,909.78 1,892.49 17.29 0.9%
Yahoo! Jewelry 1,106.24 1,116.48 -10.24 -0.9%

Nebude to až tak zlé z ekonomickou blokádou ako sa vyhrážajú politici ešte viac novinári .😃

RAPAPORT... ALROSA signed an agreement with the Diamond Dealers Club (DDC) of New York to promote the development of the diamond industry in both Russia and the U.S.

The agreement will see the parties exchange information to facilitate cooperation between the U.S. and Russian diamond sectors in such areas as polished diamond certification, new cutting and polishing technologies and initiatives to identify synthetic and treated diamonds. The memorandums terms also included cooperation on World Diamond Council (WDC) issues.

The agreement was signed at an official ceremony in Las Vegas on May 30 by Reuven Kaufman, the president of the DDC, and Alexander Malinin, the director of ALROSAs cutting and polishing division Brillianty ALROSA.

”Cooperation between diamond market participants and industry organizations is important for the market transparency. Information exchange will help mining companies, diamond cutters and jewelry producers to get a deeper understanding of actual market trends, supply, demand and especially pricing," Malinin said. "Such cooperation can also provide guarantees of the origin of diamonds to jewelry customers and strengthen their confidence in the diamond market."

Additionally, the parties will aim to maintain separate sales of natural and synthetic diamonds and diamond jewelry, as well as fight against the unethical practice of mixing synthetics with natural diamonds.

Rapaport Weekly Market Comment June 6, 2014

JCK Vegas show meets expectations despite slower traffic from small independent jewelers. Steady U.S. demand for affordable VS-SI commercial goods but trading weak for larger better-quality stones. Couture did well with strong demand for branded fine jewelry up to $8K. RapNet Diamond Index (RAPI) for 1ct. -0.5% in May. U.S. April jewelry and watch sales +2.4% to $5.7B. U.S. April polished imports +19% to $2B, exports flat at $1.6B. Rough market stable with expectations for small De Beers sight next week. Dominion Diamond Corp. plans shift to contract sales in July. Christie’s London sells $14M (73% by lot) with 18.27ct., fancy brown-yellow, VVS1 diamond selling for $635,842 ($34,802/ct.).

RapNet Data: June 5

Diamonds 1,099,453
Value $7,041,445,050
Carats 1,217,971
Average Discount -26.8%

www.rapnet.com

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RAPAPORT ANNOUNCEMENTS

June 2-11 Mon-Wed

Rapaport Single Stone Auction

New York & Israel

View Details.
June 9-12 Mon-Thu
Rapaport Melee Auction

New York

www.rapaportauctions.com

QUOTE OF THE WEEK
Having now closed the acquisition of Zale, we have entered a new era of growth and transformation for our company and our people. I am truly excited to have the Zale team joining the Signet family and I, and our leadership team, look forward to building upon the strengths of the entire organization.

Mike Barnes | Signet

Careers@Rapaport

The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp and Mumbai. View jobs now.

RETAIL & WHOLESALE

Vegas Week Meets Expectations

Diamond suppliers were satisfied with the level of sales at the JCK Vegas show, even though trading activity was slower than previous years. Exhibitors noted that buyers bought goods to fill orders but they avoided larger scale purchases to fill inventory. Similarly, inter-dealer trading was stable but slightly subdued.

Meanwhile, demand for designer and branded fine jewelry was the strongest in years at the Couture show. Retail buyers sought to increase their inventory of mid-level price points, noting that aspirational consumers signal a readiness to spend on designer pieces and new collections. Mid-market and upscale brands observed improving demand for jewelry under the $8,000 price point as U.S. consumers in higher income brackets are loosening their wallet following a prolonged recessionary mindset.

Diamond trading trends from the Vegas shows: • Good demand for 0.30-carat to 0.70-carat, G-J, VS-SI • Strong demand for non-certified pointer sizes in parcels • Demand on the weak side for certified 1-carat to 2.99-carat diamonds • The market has slowed for large, special stones • Commercial-quality, fancy color diamonds remain strong • Steady demand for fancy shapes with pears and ovals being most popular.

U.S. Jewelry & Watch Sales +2%

U.S. jewelry and watch sales improved by low single-digits in April, according to preliminary statistics, while the rate of growth for March was revised two percentage points higher to 4.1%. Sales of jewelry and watches combined increased 2.4% year on year in April as measured across all retail segments. However, the rate of growth one year ago was very robust at 11.1%.

Jewelry sales in April increased 2.3% year on year to $5.056 billion, while watch sales rose 2.7% to $676 million, according to Rapaport News estimates. Sales totals were unchanged from March, indicating stable consumer interest for jewelry and watches at the nations retailers. By comparison, advanced estimates for all retail sales at U.S. department stores in April revealed an increase of 3.4% year on year to $13.01 billion.

U.S. Chain-Store Sales +5%

U.S. chain-store sales rose 4.8% year on year in May, according to the International Council of Shopping Centers (ICSC). The pace of growth rose above the rolling 12-month average as consumer spending was given a boost from pent-up demand, ICSC concluded. The growth rate for June, on a comparable-store sales basis, is also expected to be healthy; however, same-store sales will have a tough year-on-year comparison given solid retail sales one year ago. ICSC research forecasts that Junes same-store sales will increase 3.5%.

Gitanjalis Profit -94%

Gitanjali Gems Ltd. reported that its revenue fell 24% to $2.1 billion (INR 124.36 billion) in the fiscal year the ended on March 31. Profit dropped 94% to $6.1 million. By segment, diamond sales rose 4% to $1.22 billion, while jewelry sales dropped 36% to $1.1 billion. For three quarters of the financial year, the industry experienced numerous challenges due to regulatory changes in India and, especially, restrictions on gold, forcing Gitanjali to place a permanent focus on marketing diamond and studded jewelry.

The company noted that although a change in focus will take around 12 to 18 months to implement and will require a major restructuring of its operations and financing, it is well positioned to undergo transformation with its strong portfolio and manufacturing capabilities.

TBZs Profit -35%

Tribhovandas Bhimji Zaveri (TBZ) Ltd. reported that revenue rose 10% year on year to $308.1 million (INR 18.24 billion) for the fiscal year that ended on March 31. Expenses rose 12% to $287.3 million, while profit fell 35% to $9.3 million. TBZ said that its operating performance had been stable during the year despite a business environment marked by an economic slowdown, high inflation, weak consumer sentiment and an unfavorable regulatory environment. To deal with the challenging macro-environment, the company explained that it slowed its expansion plans and focused on improving same-store sales.

Tara Jewels Profit -32%

Tara Jewels Ltd. reported that company revenue rose 3.4% year on year to $286 million (INR 16.954 billion), excluding bullion sales, in the fiscal year that ended on March 31. Expenses grew 4.3% to $263 million. Profit fell 31.6% to $8.5 million. During the fiscal year, the company observed that its international business grew about 9% year on year with strong demand for jewelry coming from the U.S., China and Australia. In India, however, Tara Jewels realigned its expansion plans given the nations tighter macro-economic environment, opting to create an "asset light" franchise model and shop-in-shop format for new stores.

Christies London Sale Nears $14M

Christies important jewels auction in London garnered $13.6 million (GBP 8.1 million) and was 73% sold by lot. The top lot was a rare enamel and diamond snake wristwatch by Bulgari, circa 1965, which fetched $1.1 million, setting a world record price for a Bulgari snake watch at auction. Other prominent lots included an 18.27-carat, VVS1, fancy brown-yellow diamond set in a diamond bracelet, which sold for $635,842 and a pear-shaped, 5.01-carat, D, IF diamond ring that garnered $364,114 or $73,000 per carat.

Dominion to Begin Contract Sales Program

Dominion Diamond Corporation will soon sell its diamonds via long term contracts as manufacturers seek consistent supplies of rough goods. James Pounds, the president of Dominion Diamond marketing, said that contract sales should supply approximately 30 companies and it expects to conduct 10 contract sales per year.

While Pounds explained that some goods will still be sold via tender in order to assure customers and shareholders that they’re selling at fair market price, about 90% of Dominion’s production will be sold to global contract customers. The remaining 10% will be supplied to manufacturers based in Canada’s Northwest Territories, according to the guidelines provided by the local provincial government.

ALROSA, DDC to Facilitate Trade

ALROSA signed an agreement with the Diamond Dealers Club (DDC) of New York to promote the development of the diamond industry in both Russia and the U.S. The agreement will see the parties exchange information to facilitate cooperation between the U.S. and Russian diamond sectors in such areas as polished diamond certification, new cutting and polishing technologies and initiatives to identify synthetic and treated diamonds. The memorandums terms also included cooperation on World Diamond Council (WDC) issues.

GJEPC Boosts Business With Americas

The Gem & Jewellery Export Promotion Council (GJEPC) is planning a new business development initiative in an effort to foster trusted relationships between India’s key jewelry industry companies and their counterparts in the Americas. The GJECP will host a series of business development conferences in the Americas as well as develop “best practices” directed at meeting today’s rapidly changing business landscape. The third step will be to foster an atmosphere that reinvigorates relationships among other tasks.

GJEPC will hold several face-to-face business development meetings in the first phase of a three-year-long campaign beginning with the “2014 Indo/U.S. Business Development Conference” in Chicago from September 5 to 8.

Signet Begins Zale Integration 

Signet Jewelers Limited became the largest specialty retail jeweler in the U.S. and U.K. through the acquisition of Zale in May, representing $6.2 billion in pro-forma revenue and operating more than 3,600 locations along with a number of kiosks. Now the company is working toward $100 million in expense synergies by the close of its fiscal year 2018. The retailer anticipates $50 million in savings from streamlined product sourcing and purchasing, $30 million in savings from repair services sales and brand cross-selling and $20 million of selling general and administrative cost reduction.

Mark Light was promoted to a newly created position of president and chief operating officer of Signet Jewelers, but he will retain the title of CEO of Sterling Jewelers. Theo Killion will retain the CEO title for Zale but he was also named president of the Zale division. George Murray was named Signets chief integration management officer. Steve Becker was promoted to chief human resource officer of the entire company. Signet is also seeking two new executive posts, a chief marketing and strategy officer as well as a chief information officer.

Tissot Watch for FIFA

Tissot is tapping into football fever ahead of the FIFA World Cup with a new Tissot Quickster Football watch. Tissot has been the official timekeeper for many sports events for more than a decade. This year, the brand offered its customers and fans a chance to serve as an official timekeeper themselves by creating a movement in the Quickster Football that is designed to time football matches, with half time and overtime chronograph functions.

Hermes to LMVH: Sell, Go Away

Hermes voiced an executive opinion during its annual shareholder meeting this week, telling its largest external shareholder, LVMH, to sell. Hermes expressed its need to operate fully independent and without intervention or threat and it takes great exception to ardent rival LVMH holding a 23% share. LVMH was fined in 2013 for improperly disclosing its share in Hermes, but provided no indication of selling its stake. Luxury group Hermes market capitalization is about $37 billion, or the third largest luxury brand behind LVMH and Richemont.

MINING

DiamondCorp Narrows Loss

DiamondCorp reported a loss of $4.4 million (GBP 2.6 million) for the fiscal year that ended December 31, 2013, which was down from a loss of $5.9 million in 2012. The company attributed the savings to reduced overhead costs and lower general and administrative expenses. The company noted that during 2013, it finalized funding to develop its Lace mine project in South Africa, installed surface facilities at the site and commenced underground mining and performed operating costs at the site under budget, reaching 95% of plan.

Brazil Minerals Increases Stake

Brazil Minerals Inc. paid $500,000 in cash and issued 675,000 shares to acquire an additional 18.75% of Mineração Duas Barras Ltda. (Duas Barras) in Brazil, increasing its current ownership to 73.75%. Through its stake in Duas Barras, the mining company posted revenue of $791,780 in 2013 and of this amount, 69% was derived from rough diamond sales, while 31% was collected from the sale of gold. In 2014, the company added polished diamonds to its raw mineral offerings.

Observers Note Diamond Looting in Marange

The executive director of the Center for Natural Resource Governance, Farai Muguwu, told SW Radio Africa that miners in Zimbabwes Marange are operating around the clock out of fear that operations will be shut, following reports that the government will consolidate the sector. Seven mining companies operate in the area, but the government has indicated that no more than two firms will be permitted.

In addition, panic has swept across the diamond-mining industry, allegedly giving rise to diamond looting by mineworkers, security and army chiefs. Zimbabwes Mines Minister Walter Chidakwa recently announced plans to consolidate mining companies as a way to minimize corruption. Apart from Marange Resources, which is owned by the government and is under U.S. sanctions, other firms include Anjin Investments, Diamond Mining Company and Mbada Diamonds, which is also under U.S. sanctions. Muguwu said it was a mistake for the government to publicly announce consolidation plans, adding that the minister has the power to simply terminate contracts on the spot, which would have avoided the looting spree underway now.

BT to Upgrade De Beers IT Services

The De Beers Group selected BT for a range of IT and networking services with a six year contract and at a cost of $37 million. BT will orchestrate IT services across 70 De Beers locations, including exploration and mining sites, drawing on capabilities of the BT Connect portfolio that provides fiber optic, microwave and satellite linkages, as well as BT Web -- a virtual private network for Internet access and backup. BT will also manage video and audio-conferencing services for De Beers through BT One Voice telephony. BT will also help De Beers customize its network to meeting changing business needs and prioritize critical business applications that are accessed across global operations.

STATS 	  

USA

Apr. $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $2,032 19% $7,488 10%
Polished exports $1,606 0% $6,579 8%
Net imports $426 322% $909 19%

Rough imports $60 82% $269 94%
Rough exports $46 77% $188 98%
Net imports $15 100% $80 86%

Net diamond account $441 308% $989 22%

ECONWATCH 	  

Diamond Industry Stock Report

U.S. and Hong Kong shares all higher except for Blue Nile (-1%) and JCP (-1%). Europe shares lower except for Damiani (+3%). India shares mainly higher but large differences remain with Classic (+39%) on the up and C. Mahendra (-8%) on the downside. Mining shares mixed with Rockwell (-10%) and Shore Gold (+19%) defining the spread. View the extended stock report.
June 6 (12 p.m. EDT) May 28 Chng.
$1 = Euro 0.730 0.736 -0.006
$1 = Rupee 58.97 58.93 0.0
$1 = Israel Shekel 3.46 3.48 -0.02
$1 = Rand 10.59 10.46 0.13
$1 = Canadian Dollar 1.09 1.09 0.00

Precious Metals
Gold $1,252.10 $1,258.70 -$6.60
Platinum $1,446.00 $1,447.00 -$1.00

Stock Indexes Chng.
BSE 25,396.46 24,566.09 830.37 3.4%
Dow Jones 16,902.99 16,633.18 269.81 1.6%
FTSE 6,858.21 6,851.22 6.99 0.1%
Hang Seng 22,951.00 23,080.03 -129.03 -0.6%
S&P 500 1,947.88 1,909.78 38.10 2.0%
Yahoo! Jewelry 1,108.60 1,106.24 2.36 0.2%

Trochu vzrúša pre darebákov.

Belgium Discovers Possible Shipment of Rough Diamonds From CAR

Jun 6, 2014 5:04 PM By AWDC

Press Release: The Antwerp diamond industry, represented by the Antwerp World Diamond Centre (AWDC), is stepping up its efforts to combat conflict diamonds. The city of Antwerp, largely owing its reputation as the most transparent and strictly controlled diamond trade center in the world that rigorously controls diamond imports and exports at the Antwerp Diamond Office, is determined to continue its strong commitment toward the Kimberley Process. According to the AWDC, the increased vigilance and intensified controls have already resulted in the detection of a shipment likely containing conflict diamonds from the Central African Republic (CAR).

In June 2013, the Kimberley Process Certification Scheme banned rough diamonds originating from CAR. Because of the ban, any import of rough diamonds coming from CAR, even accompanied by a Kimberley Process certificate from CAR would not be allowed to enter the Antwerp market and would be confiscated.

Apart from the strict controls that are applied in Antwerp and the 100 percent physical control of each and every shipment that enters or leaves Antwerp, the Diamond Office procedures go even further. Each suspicious shipment is verified, comparing the contents of the parcels with the so-called production footprints of mining operations in conflict areas. Rough diamonds that are imported legally in Antwerp via other diamond trade hubs will be cross-checked on typical characteristics such as color, assortment and size using visual material from a typical rough production of a certain area, such as the CAR. Thus the Diamond Office experts can assess whether or not diamonds are likely originating from a specific conflict area.

By implementing these strict controls, Antwerp, the industry’s leading trade hub in terms of compliance and transparency, aims to give a strong signal and to prohibit conflict diamonds from entering Antwerp. According to a recent report from the Enough Project, today diamonds from CAR are still illegally entering the market in certain countries. These conflict diamonds enter the legal circuit, mostly through forged Kimberley Process certificates that are insufficiently controlled via other diamond hubs.

The recent discovery of a suspicious shipment of rough diamonds and the strong indications these diamonds originated from CAR, led the AWDC to raise the alarm. The AWDC calls upon all diamond centers to implement the same strict controls on import and export procedures and Kimberley Process requirements. It is clear that the Kimberley Process can only be a powerful tool if all participants take responsibility in the fight against conflict diamonds.

In the Antwerp Diamond Office, the FPS Economy discovered a suspicious shipment of rough diamonds that could potentially originate from CAR, where a civil war is raging. Two weeks ago, during the physical inspection of imports and exports by the experts of the FPS Economy, a suspicious shipment of rough diamonds was discovered. Upon request of the Belgian Kimberley Process authority, the FPS Economy and the working group of diamond experts were immediately asked to advise, comparing digital images of the shipment and images of the CAR footprint, concluding there is a high probability that the shipment of rough diamonds originated from CAR. The FPS Economy immediately notified the judicial authorities.

The European Commission appointed the FPS Economy as the official authority charged with controlling the international Kimberley Process Certification Scheme requirements on rough diamonds. One of those requirements states that each shipment of rough diamonds that is exported or imported worldwide needs to be accompanied by a valid Kimberley Process certificate, issued by an officially authorized body in one of the participating countries.

View the press release issued by the Belgian Federal Public Service Economy
http://economie.fgov.be/en/

Rapaport Weekly Market Comment June 13, 2014

Diamond trading stable with mixed expectations for the June HK show. De Beers estimates 2013 global diamond demand +3% and expects +4.5% in 2014 from growth in China and the U.S. Indian retail sentiment improves on stronger rupee and lower gold prices. Rough markets stable during De Beers sight. Dominion 1Q revenue +61% to $176M, profit -98% to $11M after previous year’s Harry Winston sale. Suashish 4Q sales -25% to $31M, profit +67% to $3M. Christies NY sells $28M (83% by lot) with oval, 5.50ct., fancy vivid pink, VVS1 diamond for $9.6M ($1.7M/ct.). Waldman Diamond Co. files Chapter 11 to fend off Bank Leumi. India’s April polished exports +8% to $1.6B., rough imports +3% to $2B.

RapNet Data: June 12

Diamonds 1,103,771
Value $7,133,368,018
Carats 1,230,801
Average Discount -26.78%

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Martin Rapaports "The last 18 inches - interacting with the jewelry trade" presentation.

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July 1-9 Tue-Wed
Rapaport Single Stone Auction

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QUOTE OF THE WEEK
If the business is able to see unarticulated or latent needs that customers dont yet recognize, it has a responsibility to educate them about the potential value they are not yet seeing. We have to satisfy those customers in terms of what they want in the moment, while steering them toward better choices over time.

John Mackey | Whole Foods
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INDUSTRY 	  

Polished Prices Steady

Diamond prices were stable in May as the trade focused on the U.S. trade show week in Las Vegas. Polished diamond trading at the show was in line with expectations with steady U.S. demand for affordable VS-SI commercial-quality diamonds. Demand for better-quality large stones was relatively weak. Far East demand was quiet despite robust jewelry sales during the May Day holiday.

The RapNet Diamond Index (RAPI™) for 1-carat diamonds fell 0.4% in May, while RAPI for 0.30-carat diamonds was flat, and RAPI for 0.50-carat diamonds rose 0.8%. RAPI for 3-carat diamonds increased 0.4% during the month. Sentiment remained positive, India’s polished trade held a cautious tone amid weak domestic demand and tight liquidity; however, Indian market optimism improved after the election of Narendra Modi as Prime Minister.

Rough trading was firm in the secondary market despite tight liquidity and the backlog of goods in the polished pipeline. Manufacturing levels increased slightly as Indian cutters returned from their summer vacations but manufacturers’ profit margins remain tight. Expect steady but slightly subdued trading moving forward as inventory levels are met and retailers anticipate filling orders rather than buying diamonds to stockpile.

Swiss Watch Exports +2%

Swiss watch exports rose 1.7% year on year to $2 billion (CHF 1.834 billion) in April, spurred by steel watch sales and strong demand from Hong Kong, the U.S. and Japan. Wristwatch exports rose 2% to $1.9 billion, while the number of units shipped decreased by 0.3% to 2.1 million. The value of other products declined by 1.3% to $107.3 million. Exports to Hong Kong rose 9.3% to $412.1 million, while exports to the U.S. increased 2% to $204.3 million. Japan recorded the highest increase and rose 34% to $139.5 million. During the first four months of 2014, total Swiss watch exports rose by 3.8% to $7.55 billion as the number of wristwatches sold rose 1.1% to 8.5 million units.

RETAIL & WHOLESALE 	  

U.S. Jewelry Store Sales +2%

U.S. jewelry store sales rose 2.4% year on year to $2.492 billion in April. The rate of growth was exactly that for overall sales of jewelry and watches during the month, which improved 2.4% to $5.732 billion as reported earlier by Rapaport News. Jewelry store sales for the first four months of 2014 have improved 4% year on year to $9.814 billion. Overall jewelry and watch sales have increased 3.5% to $22.781 billion, according to Rapaport News calculations. Meanwhile, advanced estimates for sales at department stores disappointed analysts by declining 1.5% in May to $13.838 billion.

Suashishs Profit +67%

Suashish Diamonds Ltd. reported that its standalone sales declined 25% year on year to $31 million (INR 1.83 billion), during the fourth quarter that ended March 31. Profit jumped 67% to $2.5 million as expenses decreased 14% to $27.5 million.

During the fiscal year, sales decreased 26% to $120.8 million, while profit grew 11% to $11.7 million as expenses declined 26% to $113.1 million.

Tiancheng Jewel Auction Nears $40M

Tiancheng Internationals spring auction of jewelry and jadeite in Hong Kong totaled $39,607,456 (HKD 308,938,160) and was 70.6% sold by lot. Two individual lots tied for the highest prices achieved during the sale, with an important natural jadeite and diamond ring along with a magnificent natural jadeite and diamond pendant "Laughing Buddha" both selling for $2,798,718. Other top lots included a natural jadeite and diamond demi-parure that sold for $2,723,077, a jadeite and mother-of-pearl and diamond ring that sold for $1,815,385 and a 15.07-carat, Burmese unheated ruby and diamond ring that sold for $1,664,103.

Christies NY Sale Tops $27.5M

Christies New York sale of important jewels achieved a total of $27,534,750 and was 83% sold by lot. The top lot of the auction was a 5.50-carat, VVS1 oval-cut fancy vivid pink diamond that sold to the New York trade for $9,573,000 or $1,740,545 per carat against a presale estimate of $6.5 million to $7.5 million. pink diamond Two additional lots achieved prices in excess of $1 million, including a 20.08-carat, D, VVS1 rectangular-cut diamond that sold for $3,077,000 and a 5.91-carat, VS1, rectangular-cut fancy light pink diamond selling for $1,835,000.

Waldman Moves to Fend Off Bank Leumi

The Waldman Diamond Company in New York filed for Chapter 11 bankruptcy protection in what the company called direct response to legal action by Bank Leumi that demanded immediate repayment of a long-standing rolling credit facility. Waldman Diamond sought court protection to preserve normal operations and restructure financial obligations. The firm listed the top 20 of its largest unsecured claims as part of the proceedings, totaling about $630,000.

The company explained that it has realized annual revenue of between $25 million and $30 million during the past several years and is currently profitable. But a series of business issues with Waldman Diamonds Complete LLC (Complete) allegedly exacerbated by Bank Leumis unwillingness to work with the firm, led to the demise of that division. Complete is now closed but Waldman Diamond is jointly liable for existing credit with Bank Leumi, which "reneged on its promises" to work with the firm and allow it to seek new funding, according to the filing. Waldman Diamond told the court that its goal is to remain profitable, ensure an orderly liquidation of Complete and propose a restructuring that is in the best interest of all creditors.

Leibish & Co. Partners With Kela

Leibish & Co. partnered with Kela.cn to provide fancy color diamonds to consumers across Asia online. Kela is reportedly accounting for 12% of global jewelry sales, which is expected to increase to 18% in the next three years, the partners stated. Leibish Polnauer, the president of Leibish & Co. stated that this partnership would create a bounty of opportunities for the average consumer in Asia to access high-end natural, fancy colors. Polnauer said, “We are mutually confident that this partnership will benefit first and foremost the clients, but also solidify Kela as the principal provider of diamonds and diamond jewelry in Asia, with Leibish & Co. as its top source for color diamonds.”

Alibaba Prepares U.S. Launch

Online retail powerhouse The Alibaba Group unveiled 11 Main (www.11main.com), a new shopping destination for U.S. consumers that is inspired by a traditional "Main Street" experience to sell jewelry, watches, fashion goods, art, toys and other items. Operating as an invitation-only marketplace, 11 Main will host specialty shops and boutiques that feature a wide range of products, including one-of-a-kind items, not available at mass merchants and other large ecommerce sites.

Alibaba is the largest online and mobile commerce company in the world in terms of gross merchandise volume. The company stated that 11 Main’s vision and its commitment to helping small businesses grow will offer U.S. shoppers something not currently in practiced online.

Budget Increases for Engagement Rings

XO Group, owner of TheKnot and the WeddingChannel, surveyed 13,000 brides and grooms who had hired professional vendors for their wedding and noted that average amount budgeted and spent on an engagement ring by these wealthy consumers rose 3% year on year to $5,598 in 2013. The most popular time to present the engagement ring was Christmastime, according to respondents.

Overall, the average amount spent on a wedding in 2013, excluding the honeymoon, rose 5% to a record high of $29,858, but the amount varied widely by U.S. location. The cost of wedding in New York City averaged $86,916, the most expensive in the U.S., while the average was only $16,159 in Idaho. By far, the most expensive budget item for a typical wedding was the venue, which accounted for 45% of the total. The average age of the bride and groom in the survey was 29 and 31, respectively. While June and September were slightly more popular months to hold a wedding, the springtime and summer months are gaining in popularity for tying the knot, according to the survey.

GENERAL 	  

AWDC Commits to Seize CAR Stones

The Antwerp World Diamond Centre (AWDC) reiterated its commitment to seize rough diamond shipments from non-Kimberley Process (KP) compliant areas following the discovery of a suspicious shipment of diamonds that may have originated in the Central African Republic (CAR). The KP banned diamonds from CAR in 2013. The AWDC called upon all diamond centers to implement the same strict controls on import and export procedures, concluding that the KP can only be a powerful tool if all participants take responsibility in the fight against conflict diamonds.

India Forms Monitoring Committee

The Gems & Jewellery Export Promotion Council (GJEPC) and other important trade bodies created the Natural Diamond Monitoring Committee to help safeguard against accidental or intentional mixing of man-made stones with naturals. The group will lead on four key solution areas:

Regulatory measures will enhance traceability of goods and penalize undisclosed mixing, it will also propose changes to the consumer protection act to better protect purchasers.

Commercial solutions will be designed to ensure greater accountability and trust within trade through the standards set by the World Federation of Diamond Bourses (WFDB).

Processes will be implemented to minimize the potential for undisclosed mixing by implementing rigorous testing protocols, tracking and storing transaction data and creating test logs and declaring findings on invoices.

Technology will be made available for identifying diamonds through a centralized testing laboratory within the Bharat Diamond Bourse. In addition, the committee will hold technology symposiums and seminars to rapidly drive scalable and affordable solutions for the industry.

MINING 	  

Dominions Sales Rise 

Dominion Diamond Corporation reported that revenue improved 61% year on year to $175.5 million in the first quarter that ended on April 30. Cost of sales jumped 69% to $137.7 million and gross margin slipped to 21.6% compared with 25.1% one year earlier. During the quarter, the company sold 259,000 carats of rough diamonds from the Ekati diamond mine for $92.8 million, while it sold 582,000 carats from the Diavik mine for $82.7 million.

The company reported profit of $10.7 million during the quarter, compared with $505.8 million one year earlier, which was higher due to the sale of Harry Winston Inc. Demand for rough diamonds during the period maintained strong momentum and rough diamond prices held steady, according to the company. The diamond market has also overcome earlier concerns about liquidity in the Indian diamond manufacturing industry and it has become increasingly evident that tighter credit will lead to more sustainable growth in both market demand and diamond pricing, the company noted.

New Targets for PL-117

Botswana Diamonds and joint-venture partner ALROSA identified two targets for drilling at its PL-117 license area in Botswanas Orapa region. The first target, AN117/2, will be drilled in September, at the same time, the partners will carry out further work to identify the exact drill site for the second target, AN117/1. Botswana Diamonds and ALROSA each own a 50% stake in Sunland Minerals, the company carrying out the exploration work.

New Deal Signed for Namaqualand 

Trans Hexs 40% owned subsidiary, Emerald Panther Investments (EPI) 78 Ltd., signed a sale agreement amendment with De Beers Consolidated Mines (DBCM) to acquire the Namaqualand mines. DBCM initially agreed to sell Namaqualand to Trans Hex for $21.2 million in May 2011 but the deal has been delayed subject to the fulfillment of a number of conditions. The amendment provides for the creation of a special purpose vehicle, which will house the states 20% interest in the project and in EPI.

Once the sale agreement is completed, Trans Hex will own a combined 60% stake in the project with the state. Asset management companies, RECM and Calibre Limited, will own a 27.2%, Dinoka Investment Holdings will own 8.8%, while the Namaqualand Diamond Fund Trust (NDFT), which represents the interests of various communities in Namaqualand region, will hold a 4%.

STATS 	  	India 

Apr. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,634 8% $7,020 -9%
Polished imports $417 4% $2,282 -12%
Net exports $1,217 -15% $4,738 -4%

Rough imports $1,985 3% $6,147 9%
Rough exports $106 -35% $527 33%
Net imports $1,879 12% $5,620 16%

Net diamond account ($662) ($882)

Synthetic gem imports $5 -7%
Synthetic rough exports $7 106%

ECONWATCH 	  

Diamond Industry Stock Report

Clearly a moody market this week as every U.S. industry stock dropped, led by Blue Nile (-6%). And yet, European shares were higher, led by Kering (+3%) and Indian shares continued to ride a wave of optimism as Classic Diamond (+21%), C.Mahendra (+13%), and Ren. Jewellery (+26%) led the way with double-digit increases. Mining shares mixed as Gemfields (+14%) led gainers and Peregrine (-9%) capped declines. View the extended stock report.
June 12 June 6 Chng.
$1 = Euro 0.737 0.730 0.007
$1 = Rupee 59.29 58.97 0.3
$1 = Israel Shekel 3.47 3.46 0.01
$1 = Rand 10.67 10.59 0.08
$1 = Canadian Dollar 1.09 1.09 0.00

Precious Metals
Gold $1,273.70 $1,252.10 $21.60
Platinum $1,438.00 $1,446.00 -$8.00

Stock Indexes Chng.
BSE 25,576.21 25,396.46 179.75 0.7%
Dow Jones 16,739.75 16,902.99 -163.24 -1.0%
FTSE 6,843.11 6,858.21 -15.10 -0.2%
Hang Seng 23,175.02 22,951.00 224.02 1.0%
S&P 500 1,930.37 1,947.88 -17.51 -0.9%
Yahoo! Jewelry 1,109.80 1,108.60 1.20 0.1%

Rapaport Weekly Market Comment June 20, 2014

Polished diamond markets quiet ahead of U.S. summer vacation. Hong Kong fair begins with reduced expectations for polished trading following relatively weak JCK Las Vegas show. Rough market firm and prices stable after $640M De Beers sight. Cutters fighting for survival with low profit margins and tight liquidity. Petra Diamonds recovers 122.52ct. blue diamond at Cullinan mine. Chow Tai Fook to buy Hearts On Fire for $150M, reports FY revenue +35% to $10B, profit +31% to $970M. India’s May polished exports +8% to $1.6B, rough imports -6% to $1.6B. World Diamond Congress ends, WFDB adds Canada, South Korea bourses to membership.

RapNet Data: June 19

Diamonds 1,104,060
Value $7,048,921,769
Carats 1,223,183
Average Discount -26.7%

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June 13-24 Fri-Tue
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QUOTE OF THE WEEK
Hearts On Fire is a best-selling luxury diamond brand with strong consumer awareness and its product offerings are ideal additions to our existing portfolio. The acquisition is in line with the group’s strategy to optimize product mix and promote higher value products to match the spending profiles of consumers. Given its proven track record not only in the western markets but also in Taiwan, the group is confident that the Hearts On Fire products will be well received in our major markets, including Hong Kong, Macau and Mainland China, where diamond jewelry is increasingly popular.

Kent Wong | Chow Tai Fook

Careers@Rapaport 	  	 

The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp and Mumbai. View jobs now.

INDUSTRY

De Beers Sight Estimate at $640M

The De Beers June sight closed with an estimated value of $640 million as demand for rough diamonds remained firm. Prices and assortments were largely unchanged from the previous sight, although sightholders reported minor price adjustments on select boxes. There were ex-plan goods – rough diamonds in excess of sightholders’ initial application for goods – offered as demand rose during sight week.

While rough demand was healthy, sightholders expressed continued concerns over tight manufacturing profit margins due to persistent high rough prices relative to polished diamonds. Rapaport News estimates that rough prices have increased by between 7% and 10% since the beginning of the year. Dealers reported that boxes were trading on the secondary market at about a 5% premium with approximately half the goods sold for cash and half on credit.

WGC Seeks to Reform London Fix

The World Gold Council (WGC) will host a forum on July 7 in London to explore ways to reform and update the London Gold Fix, or the global reference price for the metal. The Financial Conduct Authority will be in attendance as an observer. The WGC stated that it intends to invite representatives of the bullion banks, refiners, exchange-traded-funds, gold investment product sponsors, exchanges, industry bodies, central banks and mining companies.

The objective of the forum will be to ensure that the full range of analysis and market perspectives are debated, understood and brought to bear on any potential changes. Any reform or replacement of the fix, must serve the needs of all market participants and meet today’s requirements for transparency, liquidity and independent oversight, according to the group.

U.S. Jewelry CPI -4%

The U.S. consumer price index (CPI) for jewelry declined 4.3% year on year to 169.36 points in May, which was the lowest reading since December 2010. The CPI in May was just a touch lower than the reading in April. The CPI for watches, meanwhile, was down 0.9% year on year to 120.37 points. Lower prices for some of the jewelry industrys commodities have contributed to a lower CPI in the past few months.

The average price of gold in May was about 10% lower, while platinum was about 2% higher compared with May 2013. The RapNet Diamond Index (RAPI), the global benchmark for polished diamond prices, fell 3.3% year on year for 1-carat diamonds, while RAPI for 3-carat diamonds dropped 2.6% in May. However, RAPI for 0.30-carat diamonds jumped 8.5% and the index increased 5.1% for 0.50-carat stones.

RETAIL & WHOLESALE 	  

Chow Tai Fook Buys Hearts On Fire

Chow Tai Fook agreed to buy diamond brand Hearts On Fire Company in a $150 million cash deal, subject to regulatory approval. Chow Tai Fook will operate Hearts On Fire as a separate division and within six months be selling Hearts On Fires products through its existing distribution network in tier I and tier II cities in Mainland China, Hong Kong, Macau and other Asian markets.

Hearts On Fire was founded in 1996 by Glenn and Susan Rothman and offers premium bridal and fashion jewelry products at 500 locations in 31 countries. The company reported that sales increased 6% year on year to $104.8 million in 2013. Chow Tai Fooks chairman, Henry Cheng, noted that the acquisition was a strategic move to complement its product portfolio with an exclusive premium diamond jewelry line and to raise its profile in the industry.

Chow Tai Fooks Profit +31%

Chow Tai Fooks revenue jumped 34.8% year on year to $10 billion (HKD 77.4 billion), while cost of goods sold soared 36.7% to $7.3 billion for the fiscal year the ended on March 31. Same-store sales increased 18.6%, with the strongest improvement out of the Hong Kong, Macau and Taiwan business region where comparable-store sales jumped 20.1%, while comparable-store sales rose 17.2% for Mainland China. Ecommerce sales were up by 90.7%. Profit increased 31.2% to $970 million.

By operating segment, retail sales totaled $8.7 billion and wholesale revenue contributed $1.3 billion. The average unit selling price for gem-set jewelry in Mainland China fell 5.8% to $870, while gold unit prices dropped 16.5% to $452. Similar declines were reported for Hong Kong, Macau and Taiwan with the average gem-set jewelry unit sale down 8.4% to $1,814 and gold product units down 16% to $699. Chow Tai Fooks inventory level rose 55.8% to $5.5 billion at the close of its financial year. The company cut and polished 198,000 carats of diamonds during the period, which was up from 189,000 carats in the previous year.

MDL Introduces Arcticmark

MDL Diamond merchants, a loose diamond supplier in Canada, debuted its new brand of diamonds called Arcticmark. The diamonds are mined in Canada’s Northwest Territories, which abide by rigorous environmental laws. “Arcticmark raises the bar in the Canadian diamond industry. Consumers are becoming more conscious about where their diamonds are coming from; we have responded by introducing our most innovative brand of diamonds to date. We are redefining today’s diamond market,” said George Mimar, MDL Diamonds president and CEO.

Tiffany & Co. Opens on the Champs-Elysees

Tiffany & Co. celebrated the opening of its new store at 62 Avenue des Champs-Elysées in Paris on June 10. The new store was designed to reflect the company’s global reputation as a luxury brand and its 177 year history that includes Paris, where Tiffany first opened a store in 1868. The new store, which spans approximately 10,000 square feet, combines the energy of New York with the elegance of Paris and is constructed on three levels. It includes luxurious private salons and a bridal salon with large windows that afford maximum natural light for viewing diamonds.

Video: Botswana Broadens Role in the Industry

WATCH NOW: Botswana’s Minister of Minerals, Energy and Water Resources, Onkokame Kitso Mokaila, expressed the countrys goal to diversify and lure jewelers to invest in the diamond-producing country. Mokaila sees the next step in securing long term growth as establishing jewelry company production facilities, which add value to the rough trade. While he was in the U.S. recently, he visited Tiffany & Co. to understand what is required to be involved in the retail side of the business.

Watch Repair Jobs Face Decline

An Oxford study, "The Future of Employment: How Susceptible Are Jobs To Computerisation," found that 47% of U.S. jobs face extinction due to technological advancements in the coming decade and the study listed watch repairer in the top 10 at No. 6. Even though watch repair is a time-honored tradition, consumers are relying more on other devices for checking time.

"Its become increasingly common for people to check their phones for the time," said Eric Miranda, a career counselor with CollegeAdmissionsReview.com. "People will still buy and wear watches - but more so now as jewelry. If someone is interested in working in watch repair, theyd be wise to combine that skill with jewelry making or jewelry repair." The top five jobs that are slipping away include postal service clerks, motion picture projectionists, embalmers, locomotive engineers and printing press operators.

Shoppers Seek Simple, Integrated Ecommerce

U.S. retailers must develop ecommerce platforms that make the purchasing process simple, while seamlessly integrating with physical store and offering free shipping and returns, according to the third annual UPS Pulse of the Online Shopper Survey by comScore Inc. and UPS.

Earlier this year, comScore asked 5,800 consumers about their online shopping experiences and respondents said they wanted more options in searching for items, checking out, enhanced security and alternate delivery locations. The study also revealed that, at least for now, U.S. consumers do prefer to evaluate and purchase products through a desktop or laptop rather than a mobile device. It is also imperative that retailers develop their omnichannel platform to drive customer loyalty, as the savvy shopper is demanding cross-channel convenience.

The study found that 40% of retail purchases were made crossing channels, whether shoppers searched in store and purchasing online or vice versa. As free shipping continues to drive purchasing decisions, comScore noted that 58% of shoppers actually added items to their shopping carts just to qualify for free shipping and 83% of shoppers were willing to wait an additional two days for delivery as long as the fees were waived. Shoppers expect greater ease with returns as 82% said that they would complete an online purchase if they could return the item to a store or ship the item back to the retailer for free.

Trade Groups Lobby for Made in the U.S.A.

The Jewelers Vigilance Committee (JVC), the Manufacturing Jewelers and Suppliers of America (MJSA), Jewelers of America (JA), the American Gem Trade Association (AGTA) and the Richline Group, suggested to the Federal Trade Commission (FTC) that jewelry comprised of metals recycled in the U.S. could be advertised as “Made in the USA.”

The FTC’s standard for “Made in the USA” is that the product must be “all or virtually all” made in the U.S. and marketers must be able to substantiate the claim. For products made of metal this can be very difficult because metal used in jewelry manufacturing was originally mined in foreign countries and it is generally impossible to determine the original source of a metal after it has been refined or smelted. The trade representatives asked the FTC to focus on products made from metal recycled in this country and to allow those products to be advertised as “Made in the USA.” If the request is granted by the FTC, sellers would be able to make the claim – as long as they could substantiate that the metal was recycled at a domestic refinery.

U.S., India Issue Trademarks

The U.S. Patent & Trademark Office (USPTO) issued the trademark "Bouquet by Leo Schachter" to Leo Schachter Diamonds LLC of New York with the registration number 4548084 and the trademark "The Beauty is in the Brilliance" to A. Link Partners Inc. of New York with the registration number 4547926. Additionally, the USPTO renewed the trademark "Le Vian Couture" for the Le Vian Corporation of Great Neck, New York with the registration number 4546853 and assigned the trademark "Intersecting Hearts" to Michael Nashef, the owner of Nashef Designs of Portage, Michigan, with the registration number 4546905.

In India, the Office of The Trade Marks Registry approved the trademark "Emporieo De Jewel" to B B Zaveri Pvt. Ltd. of Mumbai with the registration number 2361367 and it approved the trademark "Mahaveer Jewellery Mart" for the company bearing that name with the registration number 1864508.

GENERAL 	  

BMI Secures Polishing Facility 

Brazil Minerals Inc. (BMI) secured a proprietary facility in Brazil for cutting and polishing diamonds that are mined from its subsidiary, Mineração Duas Barras Ltd. (Duas Barras). The mining company ramped up its polished diamond production this year in an effort to generate higher revenue growth through polished sales.

It is expected that the facility will be staffed by a master diamond cutter and polisher who has more than 20 years of experience, according to Brazil Minerals. The cutter will be supported by an assistant and office support personnel. Brazil Minerals received licenses from the federal government to export either polished or rough diamonds that originated from Duas Barras. So far this year, the company stated it had sold polished diamonds to a multi-store jewelry chain in Brazil.

Antwerp Hosts World Diamond Congress

The World Federation of Diamond Bourses (WFDB) reelected Ernie Blom as president for another two-year term during this weeks World Diamond Congress in Antwerp. Members also elected Julien Drybooms as vice president, Rony Unterman as secretary-general with Michel Schonfeld as deputy and Dieter Hahn as treasurer with Harry Levy as deputy.

WFDBs executive members committee includes Rami Baron, Reuven Kaufman, Harry Levy, Nikhil Jhaveri, Anoop Metha, Peter Meeus, Sergey Oulin, Alex Popov, Lin Qiang and Shmuel Schnitzer. During working sessions, WFDB committees finalized an agreement with the Borsa Istanbul to work together in developing the diamond market in Turkey and to launch the World Diamond Mark. The WFDB also formally welcomed the Diamond Bourse of Canada, represented by its president, David Gavin, and the Korea Diamond Bourse, represented by its president, Chang Soo Nam. Indias Gem & Jewellery Export Promotion Council (GJEPC), represented by Suresh Shah, was also confirmed as an associate member.

Additionally this week, the WFDB, CIBJO, the International Diamond Manufacturers Association (IDMA) and the World Diamond Council (WDC) established a presidents forum to collaborate, discuss and formulate strategies and policies for the industry on important issues of common interest. The first order of business will be to engage with the precious stones multi-stakeholder working group to discuss the creation of acceptable due diligence guidelines to defend the integrity of the supply chain.
Namibia to Develop Rough Sales Channel

Namibia is considering establishing a company to sell diamonds outside of the De Beers framework that is currently in place. Isak Katali, Namibia’s Minister of Mines and Energy, said the government is negotiating a way in which diamond dealers and manufacturers may buy diamonds direct. Namibia is hoping to develop its diamond industry beyond mining to enable job creation for cutting and polishing and diamond trading. The new state-run trading company would mirror the the Okavango Diamond Company in Botswana, which began selling a portion of Botswana’s production independently of De Beers in 2013

MINING 	  

Gemfields Ruby Auction Nears $34M

Gemfields Plc reported that its inaugural auction of ruby and corundum from its 75% owned Montepuez ruby deposit in Mozambique achieved $33.5 million or an average $18.43 per carat. The auction took place in Singapore on June 12 to 17 and was 92% sold by lot. The company added that following the auction, aggregate consolidated revenue from rough gemstone sales for the financial year ending on June 30 will exceed $143 million.

Petra Recovers Large Blue Diamond

Petra Diamonds Ltd. recovered an exceptional 122.52-carat blue diamond at the companys Cullinan mine in South Africa. The rough stone will require further analysis in order to assess its potential value and upon completion of that process, Petra Diamonds stated that it will evaluate an optimal route to market. Petra Diamonds acquired the Cullinan mine in 2008 and has continued to produce a number of exceptional blue diamonds.

KDL Rough Auction Achieves $5M

Kimberley Diamonds Ltd. raised $5.1 million from a diamond auction of 24,546.69 carats for an average $209.21 per carat, the highest price per carat attained since the company acquired Ellendale in February 2013. Rough diamond demand has remained strong, with the overall price per carat continuing to increase, according to the company. The auction took place through the companys Antwerp office online auction platform, eDiamond.

Mbada Reduces Employee Pay

Mbada Diamonds reportedly lowered worker wages by 50% due to weaker than expected production, according to the New Zimbabwe newspaper. Rival mining company Anjin Resources reportedly laid off many on its staff for the same reason in May. But Mbada, which is a joint venture between South African investment groups and the Zimbabwe Mining Development Corporation (ZMDC), employs about 1,700 and is under U.S. sanctions. Mbada allegedly owes $22.4 million in corporate tax to Zimbabwe and, along with all the miners in the Marange region, faces an uncertain future as the country seeks to consolidate diamond operations in the region.

MPDI Increases Private Placement

Mountain Province Diamonds Inc. (MPDI) increased the size of its previously announced non-brokered private placement from $35 million to approximately $45 million. The first tranche under the private placement closed on June 12 and the second tranche is expected to close on or before June 20. Common shares issued under the private placement have been priced at $5 per share and are subject to a four month hold period.

STATS 	  

India

May $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,636 -8% $8,656 -9%
Polished imports $422 -21% $2,704 -14%
Net exports $1,214 -2% $5,952 -6%

Rough imports $1,550 -6% $7,697 6%
Rough exports $143 6% $670 -27%
Net imports $1,407 -7% $7,027 10%

Net diamond account ($193) ($1,075)

Synthetic stone exports $9 -32%
Synthetic stone imports $9 33%

ECONWATCH

Diamond Industry Stock Report

Gold changed direction on safe-haven buying and more Middle East turmoil, ending the week flat year on year but up 2% for the month. U.S. industry shares improved after two weeks of losses with JCP (+7%) leading the way. European shares higher and Indian shares mostly lower for the first time since the election with 10% declines for Goldiam, Ren. Jewellery and Winsome. Mining shares mostly higher except for Gem Diamonds (-10%). View the extended stock report.
June 19 June 12 Chng.
$1 = Euro 0.735 0.737 -0.002
$1 = Rupee 60.16 59.29 0.9
$1 = Israel Shekel 3.44 3.47 -0.03
$1 = Rand 10.75 10.67 0.08
$1 = Canadian Dollar 1.07 1.09 -0.02

Precious Metals
Gold $1,318.60 $1,273.70 $44.90
Platinum $1,469.00 $1,438.00 $31.00

Stock Indexes Chng.
BSE 25,201.80 25,576.21 -374.41 -1.5%
Dow Jones 16,913.34 16,739.75 173.59 1.0%
FTSE 6,808.11 6,843.11 -35.00 -0.5%
Hang Seng 23,167.73 23,175.02 -7.29 0.0%
S&P 500 1,958.50 1,930.37 28.13 1.5%
Yahoo! Jewelry 1,105.57 1,109.80 -4.23 -0.4%

Príprava na možné ekonomické sankcie.😃

ALROSA and GJEPC agreed to expand exchange of information

Last Thursday, Russian diamond miner ALROSA and the Gem & Jewellery Export Promotion Council of India (GJEPC) signed a Memorandum of Understanding, which aims at expanding cooperation between the diamond industries of the two countries. The document was signed by Fyodor Andreev, President of ALROSA and Vipul Shah, Chairman of GJEPC after they exchanged speeches and the Russian and Indian delegations discussed areas of possible cooperation.

Under this Memorandum, ALROSA and GJEPC agreed to exchange information concerning the development of cooperation between the diamond industries in Russia and India, including overviews of the diamond market and diamond market forecasts, diamond import and export statistics, as well as market research reports. Both parties will also cooperate on the Kimberley Process issues and jointly work to ensure separate sales of natural and synthetic diamonds.

During a press conference after the signing ceremony, Vipul Shah, having stressed the importance of the Memorandum of Understanding, said that it would be a huge opportunity for the GJEPC members to establish closer relations with ALROSA. They will be able to get a lot of information that will help them to understand the Russian market. On the other hand, ALROSA will also be able to understand the Indian market better. According to Vipul Shah, having signed this document, GJEPC will share statistics related to the Indian retail market and diamond manufacturing industry in return for information on the Russian retail market. “We will be exchanging information, which we will be sharing with our members, so they can start thinking how to increase trade relations and business between the two countries,” he said.

Mr. Siddharth, Joint Secretary of the Ministry of Commerce and Industry of India, commenting on the signing of MoU said the document institutionalized the exchange of information between GJEPC and ALROSA, which previously was sporadic. "Basically, the idea is that both our countries complement each other. You have the biggest producer of rough diamonds on the one hand, and we have the biggest cutting and polishing industry on the other hand. So, this Memorandum brings in more understanding of each other’s points of view," he said, expressing the hope that this will lead to more business opportunities in the future.

Talking about the problem of market regulation with regard to natural and synthetic diamonds, the members of the Indian delegation confirmed that this was one of the main challenges facing the GJEPC, and said they had ordered a report on this issue from A.T. Kearney, a marketing consultancy, which would be released soon. It was stressed that the GJEPC calls on companies dealing with natural diamonds and companies dealing with synthetic diamonds to do their business transparently disclosing information about their goods to consumers.

The importance of this problem was also highlighted by Vladlen Nogovitsyn, Head of Marketing Department, ALROSA, who pointed to the need for timely action on the issue of synthetics.

Speaking about long-term contracts under which Indian companies are working with ALROSA, Vipul Shah said that it was very much desired for the Indian diamond industry to have long-term contracts, because once you have a long-term contract you can plan your business in a very proper manner, you can assure your retailers about supplies and about demand. “So it is a very good business model. At the Council, we prefer more of long-term contracts coming to India for the members so that they can ever have a consistent supply," said the head of GJEPC.

The Indian delegation also noted that the diamond manufacturing industry in India employs a huge workforce and consistent supply is absolutely necessary, otherwise if it is not there, then the problem is higher speculation, which cannot be permitted at this rough time. And it is good for rough diamond producers as well to have such a commitment even before mining, when such a contract is there.

Describing the situation with the current supply of rough diamonds to India Vipul Shah said it was much better compared to last year and supply was consistent across all the sources. “So, we see a good year ahead of us with demand always exceeding supply. It will be more challenging after 4-5 years because no new mines are coming. That would be challenging in terms of how we are going to tackle it. And this is to be discussed among the producing countries and manufacturers in a forum to understand the future prospects of the market,” he said.

Vladimir Malakhov, Rough&Polished, Moscow

Rapaport Weekly Market Comment June 27, 2014

Diamond markets seasonally slow as U.S. vacation period approaches. Hong Kong show fails to meet expectations with some price softening. Far East market slow with selective Chinese buying. U.S. demand for inexpensive piqué diamonds very strong with prices firming. ALROSA 1Q revenue +43% to $1.7B, profit -3% to $180M, rough prices +3%. Russia’s 1Q rough exports +21% to $1.4B, volume +22% to 12M cts. Angola reportedly okays Leviev rough sales on open market. Luk Fook 2014 revenue +43% to $2.5B, profit +50% to $241M. U.S. May jewelry sales +5% to $6B, watch sales +7% to $871M. Union Bank of India opens Antwerp branch. Gemesis appoints Lisa Bissell as CEO.

RapNet Data: June 26

Diamonds 1,121,500
Value $7,197,500,645
Carats 1,238,735
Average Discount -26.69%

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QUOTE OF THE WEEK
We’re very keen to see the sightholder brand become more robust. Through our best practice principles and financial governance we’re looking for more transparency and to make sure that sightholders are in a financially strong position to take the industry forward with us.

Paul Rowley | De Beers Group

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INDUSTRY 	  

ALROSAs Profit -3%

ALROSAs revenue rose 43% year on year to $1.66 billion (RUB 56.3 billion) in the first quarter of 2014. Growth was driven by an increase in sales volume, coupled with a weakening of the Russian ruble against the U.S. dollar. ALROSAs profit declined 3% to $179.5 million due to higher costs. The groups cost of sales rose 40% to $820.6 million.

The average increase for rough diamond prices was 3% during the period, but the average price of its gem-quality diamonds that sold fell 2% year on year to $155 per carat due to changes in product mix. The company reported that diamond sales rose 42% to $1.51 billion and the volume of diamond sales increased 23% to 12.7 million carats. ALROSA also receives revenue from other product subsidiaries, including energy and gas. During the quarter, group diamond ‎production rose 5% to 7.9 million carats.

Meanwhile, Russias rough diamond exports jumped 21.5% to 12.01 million carats in the first quarter, while the value rose 20.6% to $1.41 billion.

De Beers Alters Sightholder Requirements

De Beers will unveil requirements for sightholder applications for the next three-year contract period in July. De Beers seeks greater transparency and financial governance among its sightholders. The new contract period begins in April 2015 and will run through March 2018. De Beers is currently finalizing its requirements before presenting them to sightholders at the next sight, which is scheduled to take place from July 14 to 18.

De Beers has scrapped the contract proposal questionnaire (CPQ) and will require sightholders to adhere to international financial reporting standards (IFRS). De Beers currently has 84 sightholders receiving goods primarily through its global sightholder sales unit, but also through the company’s Botswana, Namibia, South Africa and Canada sights. In addition, the company sells 10% of its production via its auctions sales.

Trading at HK Show Disappoints

Trading at the June Hong Kong Jewellery & Gem Fair, which took place between June 19 and 22, came in below expectations as the event failed to boost sales during the traditionally slow period of the year. Exhibitors noted that buyers were looking for specific items to fill immediate orders but they avoided inventory purchases.

Suppliers reported that they faced price resistance from buyers, who were generally looking for bargains and displayed no real urgency to buy. Sellers were unwilling to lower prices as their profit margins from polished diamond sales have been squeezed by higher rough prices. Exhibitors that focused on selling fine diamond jewelry reported similarly slow activity, claiming visitor traffic was lower than one year ago. Nonetheless, there as good demand for diamonds above 3 carats and firm demand for fancy color diamonds and fancy shapes with ovals being particularly strong.

RETAIL & WHOLESALE 	  

U.S. Jewelry, Watch Sales +6%

U.S. combined jewelry and watch sales in May rose 5.6% year on year to $7.192 billion, according to preliminary government estimates. Sales data for April was unchanged, however, the figures were revised slightly lower for March.

Preliminary jewelry and watch sales for the first five months of the year rose 3.4% to $29.95 billion. Jewelry sales across all retail establishments in May increased 5.4% year on year to $6.321 billion, according to Rapaport News estimates. The U.S. consumer price index (CPI) for jewelry in May declined 4.3% as price pressures eased for supplies. Watch sales increased 6.8% in May to $871 million as the CPI fell 0.9%. Jewelry sales in the U.S. for the first five months of 2014 have risen 3.1% to $26.394 billion, while watch sales increased 3.9% to $3.556 billion.

Luk Fooks Profit +50%

Luk Fook Holdings reported that revenue rose 43% year on year ‎to $2.478 billion (HKD 19.214 billion) in the fiscal year that ended on March 31. Group profit ‎grew 49.8% to $240.8 million. ‎ Growth was given a boost from tourist purchases in Hong Kong and a surge in gold product sales. Luk Fook’s retail business continued to be the main sales driver for the group as sales jumped 48% to $2.085 billion, while wholesale revenue rose 20% to $313.7 million.

By product category, gold and platinum products remained the favorite items among customers as sales rose 53.6% and sales of gem-set jewelry products increased 26%. Same-store sales growth for gold and platinum during the year was 36%, while comparable-store sales growth for gem-set jewelry was 4.8. During the year, the group opened 186 new doors, of which 181 were licensee shops. At the close of its fiscal year, Luk Fook had a total of 1,268 stores globally across Mainland China, Hong Kong, Macau, Singapore, the U.S., Canada and Australia.

Sellers Own the Authenticity of Diamonds

WATCH NOW: The annual Rapaport Certification Conference highlighted how jewelers are responsible for the authenticity of the diamonds they’re selling. Everyone in the pipeline has a responsibility to the purchaser and no one can pass responsibility on to a grading report. The Jewelers Vigilance Committee said the U.S. law considers a "diamond" to be natural, so additional language is required to describe other features, especially man-made.

India is the Industrys Future

WATCH NOW: Vipul Shah, the chairman of Indias Gem & Jewellery Export Promotion Council (GJEPC), discusses how business conditions and policies in India are changing. Additionally, he urges U.S. retailers to build direct partnerships with Indian firms to reduce reliance on the middle man and reduce operating costs.

Dhamani 1969 Opens at Dubai Mall

Dhamani opened its signature boutique, Dhamani 1969, at The Dubai Mall. The jeweler stated that it has a deep understanding of the intrinsic value and cultural importance of jewelry in todays world. Dhamani 1969 sells rare gems and diamond encrusted jewelry and the opening of this location marks its first step toward positioning a home-grown brand on the global marketplace. Plans are in place to expand across Oman, Qatar, Singapore and the U.K.

Prepare Now for Profitable 4Q

Prepare now for making the online Christmas-shopping season profitable, according to a joint ecommerce presentation this week by Forrester Research Inc. and IBM. Retailers must find ways to capture a diminishing attention span of the U.S. consumer, reduce cart abandonment rates (which are about 70%) and increase session time with compelling page content. These issues are closely tied to marketing, merchandising and the retailers omnichannel strategy.

The consultants found that online shopping behavior is largely centered on self-purchases as the holiday season ramps up in November. Roughly half of consumers made a self-gift purchase from just before Thanksgiving and well into Cyber Week, or the days following CyberMonday. Gift spending for others began in earnest over Thanksgiving weekend and stretched into the middle of December. Retailers should design their marketing strategy to capture the self-purchasing shopper, especially through a personalization strategy.

IBM noted that 80% of consumers prefer shopping online simply to avoid chaos and crowded stores over the Thanksgiving weekend and retailers should pounce on this opportunity to attract electronic sales. Email outreach is an extremely important driver for consumers to discover special deals and product announcements, as 40% said they made a purchase due to an email from their favorite retailers. On the other hand, a retailers social media presence only resulted in 4% of consumers making a purchase.

Forrester concluded that shipping clubs, such as Amazon Prime and Shoprunner, are experiencing tremendous growth, with 21% of consumers saying they will shop more with retailers who belong to those clubs. Great attention is also directed toward mobile shopping. IBM anticipates that during Christmastime 2014, mobile devices will account for 43% of all retail traffic and 20% of all ecommerce sales. Forrester found that smartphone usage is cannibalizing tablets and PCs as consumers spend more time with their phones. This means that retailers must imagine, design and test all apps, websites and email outreach across the various mobile devices. Poor user experience will result in lost sales.

Shopping begins on search engines, according to Forrester, so the most important touch point for retailers this year is to think about how they market and show content that is communicated at the right place and right time. Understand the consumer mindset and compel them, optimize the experience for public access and on an individual, personalize basis, engage in dialog and coordinate the same retail experience across all channels.

GENERAL 	  

Bissell Joins Gemesis

Gemesis Inc. appointed Lisa Bissell as the companys new president and CEO. The company defined Bissell as a highly-regarded name in the industry with 26 years of experience. Bissell was with M. Fabrikant & Sons for 19 years, where she developed proprietary brands and worked with jewelry designers to create new products. Bissell said the industry must work to empower harmonious co-existence, with an aim to benefit the consumer, along with the people and communities who are such an important part of this industry.

IMF Notes Zimbabwes Progress

The International Monetary Fund (IMF) stated that Zimbabwe remains committed to implementing the policies and reforms that were agreed to with an IMF-monitored program and to stay engaged with international financial institutions. The program marked its first anniversary this month and while the IMF suggested a number of guidelines to stabilize Zimbabwes economy, the organization also concluded that the government must fully implement controls to boost transparency in the diamond sector and to modernize mining legislation.

One measure the country implemented following general elections in July 2013, was to drive sustainable development and social equity through a new five-year development plan, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIM ASSET). Nonetheless, the IMF found that progress on its monitored program has been mixed, reflecting a long electoral process coupled with a protracted post-election transition. But the monitors progress report indicated that Zimbabwe is interested in a successor monitor to build on achievements this past year and to support a stronger policy framework moving forward.

Union Bank Opens in Antwerp

Union Bank of India opened a branch in Antwerp, marking the fifth Indian lender operating in Belgium. The bank has been supporting diamond firms with credit and loans for many decades. Arun Tiwari, the chairman of the bank told Bloomberg News that the new Antwerp office will offer one fifth of its $200 million loan book to the diamond sector during its first year of operation. The bank will also lend to companies in other industries and provide trade finance, remittances and syndicated loans. Currently, State Bank of India (SBIN), ABN Amro, Antwerp Diamond Bank and Standard Chartered are among the top lenders to the diamond industry.

GJEPC Seeks Special Trading Zones

The Gem & Jewellery Export Promotion Council (GJEPC) lobbied the newly elected government for Special Notified Zones (SNZ), where global diamond-mining companies could set up rough trading offices. These zones would allow local traders to buy direct without having to travel abroad for auctions. GJEPC in partnership with Bharat Diamond Bourse (BDB) proposed a rough diamond viewing facility in Mumbai. GJEPC also called for a new gold policy to improve imports and supplies, especially for smaller jewelers.

MINING 	  

Rockwells Revenue +15%

Rockwell Diamonds reported that rough sales rose 15% year on year to $8.76 million for the first quarter that ended on May 31. The company sold 6,677 carats, an increase of 34% from one year ago, while the average price was $1,312 per carat, down 14% from 2013. Production jumped 90% to 9,162 carats, with 4,800 carats derived from the companys royalty mining contractors. The company began its second quarter with 2,966 carats of high-quality rough diamonds in inventory. Rockwell recorded improved performance at its Niewejaarskraal operations, where rough prices achieved $2,408 per carat.

Leviev Group, Angola Reach a Deal

The Leviev Group reportedly reached a deal with Angola that allows the diamond company to sell rough diamonds from the Luminas mine directly on the open market rather than to specific traders in China and Dubai, according to insiders who were quoted by Bloomberg News. The report noted that the Leviev Group would benefit from selling rough diamonds at free market prices, whereas the current arrangement results in selling at a discount. Insiders suggested that the deal would result in rough prices that are 50% higher for the Leviev Group.

Firestone Begins Excavation

Firestone Diamonds began excavating at its Liqhobong diamond mine in Lesotho in preparation for the development and commissioning of the main treatment plant. The company expects construction to span two years, with production anticipated to come online in the first half of 2016. To date, the decommissioning and removal of the existing pilot plant is 30% complete. Firestone also needs to widen and reroute the site access road, build residue slimes retaining walls and other engineering support.

Lucara Prepares Large Stone Tender

Lucara Diamond Corporation will offer 16 lots at its second exceptional stone tender that is planned for July 16. The tender includes large diamonds that were recovered from the companys Karowe mine in Botswana this year. Of the lots on offer, the largest diamond is a 258.69-carat stone (lot 501), with the smallest lot weighing 34.88 carats (lot 516), according to the tender brochure. Additionally, five lots are larger than 109 carats. Diamond viewing will take place in Antwerp from July 3 to 10 and in Gaborone from July 14 to 16.

Brazil Minerals Adds Licenses

Brazil Minerals Inc. added two mineral rights for diamonds and gold to its portfolio, adding 2,371 acres for total exploration program coverage of 3,775 acres. There was no stock issuance related to these transactions, according to the company. The rights are located in the Jequitinhonha River valley, near the mining concession and plant for Brazil Minerals subsidiary, Mineração Duas Barras Ltda. (Duas Barras). The company stated that it intends to continue selectively obtaining mineral rights for diamonds and gold near Duas Barras, where production is ongoing.

ECONWATCH 	  

Diamond Industry Stock Report

U.S. stocks all lower except for Movado (+4%), Hong Kong shares higher led by Luk Fook (+10%). European shares fell except for Swatch (+1%) and Indian shares mixed with Rajesh Exports (+25%) and Winsome (-14%) defining a wide trading range. Mining shares mixed but Rockwell (+22%) pulled way ahead. View the extended stock report.
June 26 June 19 Chng.
$1 = Euro 0.734 0.735 -0.001
$1 = Rupee 60.18 60.16 0.0
$1 = Israel Shekel 3.42 3.44 -0.02
$1 = Rand 10.64 10.75 -0.11
$1 = Canadian Dollar 1.07 1.07 0.00

Precious Metals
Gold $1,316.50 $1,318.60 -$2.10
Platinum $1,463.00 $1,469.00 -$6.00

Stock Indexes Chng.
BSE 25,062.67 25,201.80 -139.13 -0.6%
Dow Jones 16,846.13 16,913.34 -67.21 -0.4%
FTSE 6,735.12 6,808.11 -72.99 -1.1%
Hang Seng 23,197.83 23,167.73 30.10 0.1%
S&P 500 1,957.22 1,958.50 -1.28 -0.1%
Yahoo! Jewelry 1,004.09 1,105.57 -101.48 -9.2%

Rapaport Weekly Market Comment July 4, 2014

Rounds: Diamond markets seasonally slow with limited demand for top quality carat and larger stones. Polished prices soften with RAPI for 1ct -0.5% in June, -1.4% in 2Q as weak trading pressures prices. The GIA backlog has reduced supply which is preventing lower prices. Belgium’s May polished exports -1% to $1.3B, rough imports +12% to $1.2B. ALROSA launches Udachny underground mine with eventual 5M ct. annual capacity. Zale CEO Theo Killion and other top executives resign in Signet management shakeup. Responsible Jewellery Council appoints Ashish Deo as CEO. AWDC reelects Stéphane Fischler as president.

RapNet Data: July 4

Diamonds $1,145,853
Value $7,301,709,093
Carats 1,277,257
Average Discount -26.75%

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QUOTE OF THE WEEK
I sincerely congratulate Mr. Fischler on his reelection as AWDC president. Over the past two years Stéphane Fischler has proven to be a skillful leader of our board of directors. He is highly respected and well known for his dedication toward the Antwerp diamond community and beyond. As CEO of our organization, I look forward to continuing the excellent cooperation with both Mr. Fischler and our board of directors.

Ari Epstein | AWDC

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INDUSTRY 	  

Polished Prices Soften in June

Diamond markets were seasonally quiet in June and polished prices softened slightly. The JCK Las Vegas show signaled steady U.S. demand for commercial-quality diamonds, strong demand for inexpensive piqué diamonds and relatively weak demand for fine-quality and larger size stones. The June Hong Kong show disappointed diamond dealers and reflected a cautious Far East market.

The RapNet Diamond Index (RAPI™) for 1-carat certified polished diamonds fell 0.5 percent during June. RAPI for 0.30-carat diamonds rose 0.5 percent and RAPI for 0.5-carat diamonds increased 0.3 percent. RAPI for 3-carat diamonds declined 0.7 percent during the month.

Polished prices softened throughout the second quarter of 2014, as noted in the Rapaport Monthly Report – “2Q Slowdown.” Profit margins remain tight for diamond manufacturers. Rough prices were stable in June and trading on the secondary market was steady. Despite liquidity concerns, rough demand is firm as manufacturers maintain steady operating levels at their factories.

WDC Issues Warning on Roughs from CAR

The World Diamond Council has issued a warning that, despite the Administrative Decision of the Kimberley Process of May 23, 2013, which ordered the temporary suspension of trading in diamonds from the Central African Republic (CAR), production of diamonds in that country is continuing and there is evidence of diamonds from the CAR reaching the markets.

The WDC seeks to reiterate that, until such date that the temporary suspension is lifted, trade in rough diamonds from the CAR is considered illicit, and members of the industry who are found to be involved in such activities will be subject to sanctions agreed to by the World Diamond Council and the diamond exchanges affiliated to the World Federation of Diamond Bourses.

The WDC urges any member of the diamond industry of who is aware of such activity taking place to report it immediately to the Kimberley Process Authorities in the country in which he or she is operating.

AGS Launches GoTo Guilds 

The American Gem Society (AGS) recently launched a virtual Guild, open not just to AGS members, but to any members of the trade interested in coming together—virtually. Peter Yantzer, executive director of AGS Laboratories, will kick-off the first GoTo Guilds meeting with his presentation, “Light Performance 101,” an in-depth primer on the American Gem Society’s ground breaking Light Performance Cut Grade.

The first GoTo Guilds meeting will be held on July 8 at 9:00 am PST.

Strong Rough Trading Continues in Antwerp

The month of May continued the positive streak of this year in rough trading, that is, an improved performance as compared to 2013. There was a slight decline in imports of polished goods this month, largely due to the decrease of stones coming in from the USA, Israel and Switzerland.

The rough trade continues to do well in May and therefore is in line with the first four months of the year. As compared to May 2013, this year’s figures show increases in volume and value for both import and export of rough diamonds. In terms of the former, there was an 11% rise in volume to 7,38 million carats and a 12% increase in value to 1,18 billion USD. Exports increased by 8,72% to 8,94 million carats and amounted to 1,29 billion USD.

Finances Discussed at Indian Summit

The Diamond, Gem and Jewellery Banking Summit 2014 was hosted by the Gems and Jewellery Export Promotion Council (GJEPC) recently in Mumbai. Present at the summit were members from the ministry of finance, leading banks, the council itself, members from the industry and a strong presence of the media.

Citing the aim of the summit, Vipul Shah, chairman – GJEPC shared that through the summit the council wanted to bring together all the parties concerned to discuss aspects and current issues on financing being faced by the sector (gems and jewelry).

Gold Grief for India

A recent report released by PricewaterhouseCoopers (PWC) conveys a startling revelation: that the Indian Government is losing billions due to its current regime on gold doré imports. As the report highlights, under the current tax regime, the Indian government is losing approximately $94 million (INR 5.6 billion) in duty revenue for every 100 tons of doré gold refined in the country.

RETAIL & WHOLESALE
NJ Investigates Cash for Gold

The state of New Jerseys Division of Consumer Affairs and its Office of Weights & Measures recorded 936 violations in “cash for gold” schemes, following a recent investigation of 21 jewelers across the state.

“New Jersey’s cash-for-gold laws serve two important functions. On one hand, they require jewelers to be transparent about their pricing and the evaluation of precious metals when buying from consumers. On the other hand, they help fight the sale of stolen jewelry, by requiring the buyers to maintain a fully detailed record that can be provided to police,” said the states acting attorney general, John J. Hoffman.

The state also issued a special notice to consumers, calling upon them to "know with whom you are doing business" and they offered public brochures on "Selling Your Precious Metals and Jewelry," "Consumer Brief: Precious Metals and Jewelry" and "Precious Metals: A Guide for Law Enforcement."

The Last 18 Inches Vital to Retailers

WATCH NOW: Martin Rapaports annual "State of the Diamond Industry" presentation provides strategic insights that jewelers need to understand the outlook for demand and supply, as well as a forecast of diamond prices going into the Christmas season. Rapaport focuses on “The Last 18 Inches,” highlighting the vital importance of retail jewelers who move diamonds across the 18-inch jewelry counter to the consumer. He highlights strategic challenges and opportunities facing jewelers, while providing practical suggestions of what jewelers can and should do to improve their business.

Gemesis Renames to Pure Grown Diamonds

Gemesis Inc. rebranded the company as Pure Grown Diamonds Inc. effective June 27. Pure Grown Diamonds will continue to provide man-made diamonds to the retail and wholesale trade. The newly appointed CEO, Lisa Bissell, is leading the new campaign. 

Bissell said, “Each of us in the diamond industry is proud of our values, especially of honesty and disclosure. Lab-grown diamonds are truly innovative and represent an incredible category. The new name reinforces our commitment to disclosure and transparency.” Pure Grown Diamonds operates as a privately held company based in New York and manufactures type IIa, gem-quality laboratory grown diamonds and manufactures jewelry.

Raja Owner Arrested

U.S. attorney Paul J. Fishman announced that Vijay Verma, 46, an Iselin resident, who used his Jersey City jewelry store in one of the major credit card fraud schemes that the Department of Justice has ever charged, has been found guilty to the role he played in the scheme.

Verma was the eighteenth person to plead guilty in the $200 million scheme and owns Raja Jewelers on Newark Avenue. He and was summoned by the U.S. District Judge Anne E. Thompson in Trenton federal court.

RJC Publishes Impacts Report

The Responsible Jewellery Council (RJC) today publishes its first Impacts Report, ‘Building Responsible Jewellery Supply Chains’, which reviews the first four years of RJC Certification programs during 2010-2013.

As the first report on RJC’s Certification programs, this report sets out a baseline for future evaluations. Drawing on audit data, collaboration reports and independent studies, the RJC Impacts Report provides a snapshot of RJC’s mine to retail activities in the jewelry supply chain. It examines progress to date and also reviews the challenges still ahead.

Signet Announces Management Changes

Signet Jewelers Limited, the largest specialty jewelry retailer in the US, UK and Canada, announced Tuesday that Ronald Ristau resigned from his position as Chief Financial Officer (CFO), effective July 31, 2014, and Michele Santana, currently Signets Senior Vice President and Controller, has been promoted to CFO Designate, effective immediately. Ms. Santana will succeed Mr. Ristau as CFO of Signet following his departure.

Signet also announced today that Theo Killion, the President and CEO of the Zale division, has resigned from his position, effective July 31, 2014. George Murray, Signets current Chief Integration Management Officer, has been promoted to President of the Zale Division and will succeed Mr. Killion upon his departure.

Swiss Watch Exports Up

Swiss watch exports rose 1.2 percent year on year to $2.1 billion (CHF 1.87 billion) in May, according to the Federation of the Swiss ‎Watch Industry.‎ Growth was spurred by precious metals watch sales.

GENERAL 	  

AWDC reelects Fischler

Board members of the Antwerp World Diamond Centre (AWDC) reelected Stéphane Fischler as its president and appointed Kaushik Mehta as the vice president to represent the trade and Freddy Inzlicht as the vice president to represent the bourses. 

The remaining six board of directors, Kaushik Mehta, Santosh Kedia, Shailesh Javeri, Samir Mehta and Jacques Weisz, elected as trade representatives through direct elections in 2012, remain in their positions for two more years. Fischler was born in Antwerp in 1958 and he is a third-generation diamantaire who started working at Fischler Diamonds in 1979, where he is now a partner. Fischler is currently the treasurer for the International Diamond Manufacturers Association (IDMA), vice president of SBD, and a board member of the WTOCD (a scientific diamond research center), the World Diamond Council, the Diamond & Jewellery Management Institute Antwerp and the Diamond Development Initiative.

CIBJO Congress Set for Brazil

CIBJO, the World Jewellery Confederation, will hold its 2015 annual congress in Salvador, Brazil, May 4 to 6, 2015, with pre-congress meetings on May 2 and May 3. Salvador is the capital of the north-eastern Brazilian state of Bahia.

Rapaport Outlines Core Set of Industry Values

WATCH NOW: The annual Rapaport Fair Trade Conference that took place in Las Vegas in June sought to develop a broad set of values that would promote greater corporate social responsibility (CSR) across the jewelry supply chain. The conference succeeded to reach a consensus of support for 10 to 12 points that would encompass what the industry aspires to in its CSR programs. The discussion purposefully avoided delving into specific actions or legislative measures that might become a burden to the trade.

RJC Appoints Deo as CEO

The Responsible Jewellery Council (RJC) appointed Ashish Deo as its chief executive officer (CEO). Deo will begin his new role on September 8 and will be based in the RJCs London office.

Deo has vast global experience working with leading international consumer and luxury brands. He most recently served as commercial director of the Fairtrade Foundation.

“The board of the RJC and I welcome the appointment of Ashish Deo who will bring a depth of experience in strategic and geographical skills,” said James Courage, RJC’s chairman. “He will strongly complement the current management team to support membership growth and support services in all markets.

Winsome Appoints New Managing Director

Winsome Diamonds & Jewellery Ltd. appointed Jaikumar Kapoor as the companys managing director with immediate effect.

The companys board of directors unanimously approved the appointment at a meeting held on June 23.

Kors Appoints Lafay to Newly Created Position

Michael Kors has appointed Stephane Lafay to the newly created role of president of Asia as the luxury lifestyle company looks to expand in the region. Lafay will assume his new role on July 28 and will report to the companys chairman and CEO, John D. Idol.

Lafay has 25 years of experience working in Asia and has spent nearly two decades building brands in the region. Idol noted that Lafays appointment points to the brand’s powerful momentum in the region and its sustained focus on growth, as the company continues to invest and work towards building a strategic roadmap for the Asia region. Michael Kors doubled its store count over the past two years to 100 locations in Asia.

Gubelin to Offer Off-Premise Testing

The Gubelin Gem Lab will be providing off-premise gem testing services in New York from July 14 through July 24 at 589 Fifth Avenue, Suite 1205. Gubelin asks that those interested in using its services contact the lab (Tel.+4141 429 1717 or Fax +4141 429 1734) in advance to make an appointment. The testing services will be available from 9am until 6pm.

U.S. Chain-Store Sales Up

U.S. chain-store sales rose 4.6 percent year on year for the week that ended on June 28, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. Chain-store sales rose 1 percent compared with the previous week.

MINING 	  

Angola Diamond Production Expected to Rise

Angola, Africas third largest diamond producer, is set to increase production by more than 20 percent this year, following the start of a massive maintenance project on the countrys largest diamond mine.

ALROSA Commissions Udachny

ALROSA commissioned its Udachny underground mine this past week and the mining giant anticipates that the operation will eventually become the largest underground diamond mine in Russia and one of the largest in the world. The underground mine is expected to reach its design capacity in 2019. ALROSA stated that once the design capacity has been reached, Udachny will be able to provide more than 5 million carats of diamonds per year.

ALROSA Shareholders Approve Dividend Increase

ALROSAs shareholders approved a 32 percent increase in dividends to RUB 1.47 per ordinary share for 2013. Shareholders voted to pay a total year-end dividend of $320.8 million (RUB 10.826 billion) at the companys annual general shareholders meeting held in Mirny on June 28.

Rapaport Weekly Market Comment July 11, 2014

Polished prices coming under increased pressure as some Indian cutters reduce 1ct. and larger prices due to weak demand, oversupply and cash flow requirements. Mumbai IIJS show will provide important indication of price movements. Rapaport Melee Index +1% in 2Q. India proposes to raise polished import duty to 2.5%, extends diamond import credit cycle from 90 to 180 days. Dominion buys Fipke Holdings 10% stake in Ekati for $67M. De Beers sells 26% of S. Africa sales unit to BEE partner. Chow Tai Fook 1Q revenue -32% as Chinese gold rush slows, gem-set jewelry sales +2%. U.S. May polished imports -3% to $3.1B, polished exports +33% to $2B. Israel’s 1H polished exports +6% to $3.6B.

RapNet Data: July 10

Diamonds 1,126,032
Value $7,194,160,004
Carats 1,252,284
Average Discount -26.82%

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QUOTE OF THE WEEK
Consistent with so many of our fellow U.S. retailers, we are experiencing a retail funk. We are confident that customer enthusiasm for our brand and employee morale are at all-time highs, yet we continue to experience slight traffic declines in this surprisingly tepid retail environment. While consumers are buying homes and automobiles and even high ticket furniture, most segments of retail are, like us, seeing more challenging sales than we had hoped early in 2014 – so we’re not alone in this.

Kip Tindell | Container Store

Careers@Rapaport 	  

The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp and Mumbai. View jobs now.

INDUSTRY 	  

Rap Melee Index +3%

The Rapaport Melee Index (RMI™) for small diamonds increased by 1% to 138.78 during the second quarter of 2014, while year on year the index is up 3.4%. Polished trading slowed during the second quarter following a strong start in the first quarter at which time retail jewelers replenished inventory after the Christmas and Chinese New Year seasons. Diamond buying subsequently focused on filling specific orders during the second quarter; however, despite the slowdown, market sentiment remained relatively positive in June.

The third quarter is projected to be a difficult period for the diamond trade, as it has been in the past few years. At best, polished prices are expected to remain stable, which will put additional pressure on manufacturers’ profit margins and should influence a decline in rough demand.

Indias Polished Import Duty May Rise

Indias Finance Minister Arun Jaitley proposed a 2.5% customs duty on semi-processed, half-cut or broken diamonds, cut and polished diamonds and colored gemstones to prevent misuse and avoidance of assessment disputes. During his speech to Parliament, he also proposed that pre-forms of precious and semi-precious stones would be fully exempted from basic customs duty in an effort to encourage exports.

In other news, the Reserve Bank of India (RBI) stated that the "Clean Credit" or credit given by a foreign supplier to India-based buyers, without any letter of credit (suppliers) or letter of undertaking (buyers) or fixed deposits from any Indian financial institution for importing rough, cut and polished diamonds, may be permitted for a period not exceeding 180 days from the date of shipment. The previous requirement permitted a period not exceeding 90 days from the date of shipment. RBI issued the new guideline following consultation with the Gems & Jewellery Export Promotion Council (GJEPC) and the Surat Diamond Association.

RETAIL & WHOLESALE 	  

Chow Tai Fook Sales Drop

Chow Tai Fook Jewellery Group Ltd. released unaudited operational data for the first fiscal quarter that ended on June 30 and estimated that group sales plunged 32% year on year. Same-store sales fell 40% group wide with a 28% decline for Mainland China and a 50% contraction for the Hong Kong, Macau and other Asian markets.

Retail sales fell during the quarter due to what the company defined as an "extraordinary high base effect" one year earlier that resulted from much higher gold product sales as gold prices declined in 2013. Nonetheless, gem-set jewelry sales performed well during the period by increasing 2%. Chow Tai Fook opened 46 points of sale in Mainland China during the first quarter; four were opened in Hong Kong, Macau and other Asian markets, increasing the retailers total number to 2,123 as of June 30.

Michael Hills FY Sales +10%

Michael Hill International estimated that its global sales rose 9.7% year on year to $454 million (AUD 483 million), while same-store revenue rose 5% to $408 million for the fiscal year that ended on June 30. Sales performance varied widely by region and in local currencies with Canadas sales growth up 30.3% to $65 million (CAD 69 million), while U.S. store sales declined 2.8% to $10 million. Jewelry store sales in New Zealand fell 1.5% to $97 million (NZD 110 million), but in Australia, the companys largest market, revenue increased 4.4% to $284 million.

Amazon Lands in Top 10

Online retailer Amazon.com broke into the Top 10 of STORES Medias annual list of the Top 100 U.S. retailers, which was published in the July issue of STORES Magazine. The top retailer, of course, was Walmart with annual sales of $334.3 billion in 2013. Fred Meyer Jewelers parent company, Kroger, came in second place with revenue of $93.6 billion and Costco was third with $74.7 billion. Target was in fourth place with sales of $71.3 billion, followed by non-jewelry retailers, The Home Depot, Walgreen, CVS and Lowes. Amazon.coms revenue jumped 27.2% in 2013 to almost $44 billion, pushing it to ninth place as grocer Safeway closed out the list at No. 10.

Breaking into the top 10 this day in age is an impressive feat that speaks to Amazon.com’s growth, according to the magazine. Kantar Group, which conducted the survey results, concluded that Amazon’s rise into the top 10 is symbolic of a shift in U.S. retail toward a genuinely multichannel future. Top 100 retailers of the future will have an in-depth knowledge of their shoppers across their physical and digital touchpoints, and theyll all have to fend off Amazon’s game changing economic and operating model.

Those retailers in the Top 100 list that sell jewelry included, Macys (No. 14), Sears (No. 16), Kohls (No. 22), BJs Wholesale (No. 29), Nordstrom (No. 33), JCPenney (No. 34), Bed Bath & Beyond (No. 36), Dillards (No. 67), QVC (No. 73), Neiman Marcus (No. 86), Belk (No. 93) and Signet Jewelers (No. 99).

BJs Pledges No Dirty Gold

BJs Wholesale Club endorsed Earthworks No Dirty Gold campaign in an effort to source metals used for its jewelry and electronic offerings through socially and environmentally responsible methods. BJs has 202 locations in 15 Eastern U.S states and is the first independent wholesale club company to commit to and endorse the campaigns Golden Rules. The company stated that it actively seeks ways to provide high-quality products that reduce the impact on the environment.

Tiffany & Co., Signet, Target Corp. and Helzberg Diamonds, among others have made the pledge. Earthworks stated that it hopes other jewelers and Costco and Macys will follow suit.

Sothebys to Sell Henry Graves Supercomplication

Sotheby’s Geneva will present The Henry Graves Supercomplication timepiece for auction on November 14, which the auction house estimated could sell for more than $16.8 million (CHF 15 million). The watch was made by Patek Philippe in 1933 and is described as a most complicated watch to be made completely by hand. Sotheby’s first sold the Henry Graves Supercomplication in New York in December 1999 for $11 million, well above the presale estimate of between $3 million and $5 million. Now, the watch returns to auction the same year Patek Philippe celebrates the brands 175th anniversary.

Tanishq Debuts Inara

Diamond jewelry brand Tanishq introduced Inara, an extension of a new line of diamond jewelry that it introduced in 2013. Inara was inspired from marine sea life with textured surfaces, fluid fineness and interwoven designs. Inara was unveiled in New Delhi this past week. The new line is crafted in white and yellow gold with white rhodium plating, which enhances the diamond look, according to Tanishq. The collection also incorporates colored gemstones such as ruby, emeralds, and blue, pink and yellow sapphires. The Inara line includes necklaces, bangles, earrings and finger rings.

GENERAL 	  

Mass Media Misidentifies Antwerp Suspect

The Antwerp Prosecutor’s office confirmed that Rosy Blues CEO, Dilip Mehta, was wrongfully identified in press reports as the "Dilip M." who had been arrested on their behalf in Dubai on June 18. Additionally, the Antwerp Prosecutor’s office never confirmed or posited that Mehta is involved in the ongoing diamond fraud case for which a suspect is now in custody. The officials called the case of mistaken identity "very regrettable." Rosy Blue demanded news agencies retract the "appalling" error from their reports and print retractions.

Singapore Gem Fair Opens in October

The Singapore Jewellery & Gem Fair, organized by UBM Media (Singapore), will take place for a second year from October 23 to 26, at the Sands Expo and Convention Centre. UBM stated that 283 exhibitors and 8,739 visitors attended the inaugural fair in 2013 and this year they expect to host 300 exhibitors from 30 countries and regions. UBM chose Singapore for this event given the large number of high-net-worth individuals (HNWIs) and a strong market for jewelry.

Antwerp Plans Fair for February

Organizers of the annual Antwerp Diamond Trade Fair (ADTF), an invitation-only loose diamond trade show, have scheduled to open for three days beginning February 1. The dates were coordinated with other industry events in the region, according to ADTF. Roughly 90 of Antwerps leading diamond firms will be on hand to display a large selection of polished goods. The fair is a joint initiative between the Antwerp Diamond Bourse, the Diamond Club of Antwerp and the Antwerp Diamond Kring exchanges and is held on the bourses diamond trading floors, which are converted into three exhibition spaces specifically for the event.

IsDMA Elects Koren

The Israel Diamond Manufacturers Association (IsDMA) elected Kobi Koren as its new president, succeeding Avraham (Bumi) Traub.

Koren also serves as chairman of the taxation committee and the consumer committee at the Israel Diamond Exchange (IDE) and is the acting president of IDE when its current president, Shmuel Schnitzer, is absent.

Schaffran Joins Worthy

Online marketplace Worthy.com named Ezzie Schaffran as its first vice president of operations to oversee the companys infrastructure and auction process from the New York office. Previously, Schaffran was the chief operating officer for Ice.com, where his career spanned 13 years beginning with an entry-level position and eventually working up into senior level roles. Worthy.com is an online platform that enables consumers to sell luxury goods, including diamonds, brand-named watches, jewelry, gemstones and precious metals by connecting them with pre-qualified buyers.

De Beers Rolls Out Melee Screening

De Beers International Institute of Diamond Grading & Research began distributing Automated Melee Screening (AMS) instruments to sightholders, with the first installation and training sessions having successfully taken place with Tasaki and Rosy Blue in Japan. Focus has now shifted to installing the AMS in sightholder facilities across key diamond trading hubs such as Antwerp, Mumbai, Hong Kong and Tel Aviv.

This is a phased roll out as technicians work in parallel to ensure timely yet comprehensive installation and training. The AMS instrument can be located in any type of environmentally controlled facility and operates as a single machine or multiple units; it screens near-colorless and colorless round brilliant diamonds from 0.20-carats down to 0.01 carat; is fully automated and will take up to 500 carats at any one time with a throughput of 360 stones per hour.

MINING 	  

Dominion Increases Share in Ekati

Dominion Diamond Corporation entered into an agreement with C. Fipke Holdings Ltd. to acquire its stake in the Ekati diamond mine for $67 million, subject to adjustments to reflect joint venture contributions and distributions since June 30, 2012 when BHP Billiton sold the project. The Ekati mine consists of the core zone, which includes the current operating mine and other permitted kimberlite pipes, as well as the buffer zone, an adjacent area hosting kimberlite pipes with both development and exploration potential.

Dominion Diamond initially held an 80% interest in the core zone, with Fipke and Dr. Stewart Blusson each holding a 10%. Dominion Diamond carries a 58.8% interest in the buffer zone, with Fipke holding a 10% share and Archon Minerals Limited holding a 31.2% interest. The agreement stated that Fipke will sell its share in the core zone for $50 million and its interest in the buffer zone for $17 million.

Lucapa Recovers Six Type IIa Stones

Lucapa Diamond Company recovered six type IIa stones along with six other gem-quality diamonds from preliminary surface sampling at its Lulo diamond concession in Angola. The company noted that the diamonds were recovered from four separate kimberlite pipes. Five of the type IIa diamonds recovered weighed a total of 2.30 carats and ranged in size from 1.05 carats to 0.15 carats.

De Beers Completes Empowerment Mandate

De Beers completed its black empowerment mandate under the South African Mining Charter for both its diamond mining and its diamond trading businesses. Black empowerment partner Ponahalo Holdings, which has held a 26% stake in the mining operations of De Beers Consolidated Mines since 2006, now also holds a 26% stake in De Beers sightholder sales division of South Africa, located in Kimberley, Northern Cape Province. All of De Beers South Africa diamond production, roughly 5 million carats per year, is sorted and valued in Kimberley, where the company holds 10 diamond sales a year supplying South Africa’s leading diamond cutting factories.

Stornoway Finances Renard

Stornoway Diamond Corporation closed its financing transactions with Orion Mine Finance, Diaquem Inc. and Ressources Quebec, which are wholly-owned subsidiaries of Investissement Quebec, and the Caisse de depot et placement du Quebec for all funds related to completing the Renard diamond project.

The financing package totals $886 million (CAD 946 million) through a combination of senior and subordinated debt facilities, equity issuances, an equipment financing facility with Caterpillar Financial and the forward sale of diamonds. Concurrent with the closing, approximately $435 million (CAD 464 million) in aggregate gross proceeds from the public and private offerings of subscription receipts and the private offering of convertible debentures has been released, which will allow Stornoway to immediately begin construction on the Renard project.

Diamcor Completes Upgrades

Diamcor Mining Inc. completed the construction, installation and commissioning work that was associated with expanding an in-field dry-screening plant at the Krone-Endora at Venetia diamond project in South Africa. Plant upgrades included the installation of a second Dabmar Bivitec screening unit as well as the design, construction and installation of significant additional conveyor belt and material handling structures to create a closed-loop automated system. Diamcor Mining has contended for some time that the plants expansion would enhance the efficient screening of fine material, reduce operating costs and effectively support increased processing capacity over the long term.

North Arrow Completes Till Sampling

North Arrow Minerals Inc. completed its planned till sampling at the Pikoo diamond project in central-eastern Saskatchewan, Canada. North Arrow collected 441 till samples in June, which was a follow up program to the discovery of diamond bearing kimberlite in 2013. The recent samples were sent to a processing laboratory for examination for which results will be used to evaluate selected potential kimberlite targets and provide more detailed regional coverage of the eastern portion of the property in defining individual kimberlite indicator mineral trains. Follow up exploration, including drilling, is tentatively planned for the fall 2014 and during the winter and spring of 2015.

STATS 	  

U.S.

May $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $3,105 -3% $10,593 6%
Polished exports $1,970 33% $8,549 13%
Net imports $1,135 -34% $2,044 -17%

Rough imports $61 15% $330 71%
Rough exports $47 213% $235 114%
Net imports $14 -57% $94 16%

Net diamond account $1,149 -34% $2,138 -16%

Israel

1H $Mil. %Chng.
Polished exports $3,552 6%
Polished imports $2,155 3%
Net exports $1,399 11%

Rough imports $2,053 1%
Rough exports $1,752 6%
Net imports $302 -22%

Net diamond account $1,097 25%

ECONWATCH 	  

Diamond Industry Stock Report

Summer trading doldrums have set in with retail stocks as industry shares were largely unchanged with the biggest movers being Chow Tai Fook, Richemont and Swatch, which were all down 3%. Indian shares were all lower except for Goldiam (+5%) and Goenka (+3%). Mining shares mainly higher, led by Gem Diamonds (+20%). View the extended stock report.
July 10 June 26 Chng.
$1 = Euro 0.734 0.734 0.000
$1 = Rupee 60.07 60.18 -0.1
$1 = Israel Shekel 3.43 3.42 0.01
$1 = Rand 10.69 10.64 0.05
$1 = Canadian Dollar 1.06 1.07 -0.01

Precious Metals
Gold $1,335.70 $1,316.50 $19.20
Platinum $1,510.00 $1,463.00 $47.00

Stock Indexes Chng.
BSE 25,372.75 25,062.67 310.08 1.2%
Dow Jones 16,915.77 16,846.13 69.64 0.4%
FTSE 6,672.37 6,735.12 -62.75 -0.9%
Hang Seng 23,238.99 23,197.83 41.16 0.2%
S&P 500 1,964.70 1,957.22 7.48 0.4%
Yahoo! Jewelry 992.65 1,004.09 -11.44 -1.1%