Rapaport Weekly Market Comment Jan. 9, 2015

Diamond markets dominated by uncertainty. Rapaport observes very strong holiday demand at Tiffany New York store while other luxury brands weak. Electronics looking better than diamonds as mining companies failed to invest profits in generic advertising. Rough prices expected to soften in January as cutters’ profits squeezed. Better to trade polished than manufacture rough. Signet Jewelers reports Nov./Dec. same store sales +3.6%, total sales of $1.9B. U.S. Nov./Dec. online retail sales +15% to $53.3B. U.S. Nov. polished imports flat at $1.9B, polished exports +2% to $1.6B. Israel’s 2014 polished exports +1% to $6.3B, rough imports +1% to $4B.
‎
RapNet Data: Jan. 8

Diamonds 1,559,750
Value $7,695,217,525
Carats 1,441,098
Average Discount -28.36%

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QUOTE OF THE WEEK
Millennials are spending more money than ever on tech and travel. A diamond may be forever, but in a generation that values impermanence, the one-time slogan of the century is looking more and more like an outdated mantra.

Beejoli Shah | Writer and Daughter of a Jeweler

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INDUSTRY 	  

RAPI Index -1% for Polished Diamonds

Diamond demand from China softened in December as economic growth slowed and retailers still held large inventory of 0.30-carat diamonds. Global diamond markets were unstable due to an imbalance between rough and polished prices. Rough prices remained relatively stable at the De Beers December sight, while sightholders rejected an estimated 20% of their allocated supply. Rough trading was slow and prices on the secondary market softened, even though most boxes were offered at a loss and on generous credit terms. Market conditions are expected to remain cautious in January as retailers assess their inventory levels following the Christmas shopping season.

In December, the RapNet Diamond Index (RAPI™) for 1-carat laboratory-graded diamonds fell 1.1%. RAPI for 0.30-carat diamonds dropped 3.5%, while RAPI for 0.50-carat diamonds declined 1.8%. RAPI for 3-carat diamonds fell 2% during the month.

For the year 2014, RAPI for 1-carat laboratory-graded diamonds fell 8.7%. RAPI for 0.30-carat diamonds declined 6.5%, while RAPI for 0.50-carat diamonds increased 0.1%. RAPI for 3-carat diamonds dropped 6.6%.

RETAIL & WHOLESALE 	  

Signets Christmas Comps +4%

Signet Jewelers reported that same-store sales rose 3.6% year on year during the Christmas season, which spanned eight weeks that ended on December 27. Total sales grew 45% to $1.85 billion due, primarily, to the company’s acquisition of Zale earlier in the year.

Growth was driven by strong performance in the U.K., where comparable-store sales jumped 9.7%, while total sales rose 6% to $215.1 million. At Signet’s U.S.-based Sterling division, same-store sales increase 2.5% and total sales rose 4% to $1.12 billion. Same-store sales at the Zale division grew 3.5% as total sales amounted to $521 million. One year ago, Zale reported that Christmas-season revenue fell 1.9% year on year to $556 million, which included the months of November and December.

Signet noted the success of its own omnichannel strategy during the season, claiming that ecommerce sales jumped 90.9%, or 20% without Zale. As a percent of total holiday sales, ecommerce increased 160 basis points, the company reported.

U.S. Ecommerce Spending +15%

U.S. online retail sales for the Christmas season, from November 1 to December 31, rose 15% year on year to $53.3 billion, according to comScore Inc. Cyber Monday, December 1, ranked as the heaviest online spending day of the year with more than $2 billion in transactions made from desktops, the company stated. December 2 ranked as the second highest spending day of the season at $1.796 billion, followed by Green Monday (December😎 with $1.615 billion and Black Friday (November 28) with $1.505 billion.

Waldman Files Chpt. 11 Reorg Plan

Alexander M. Waldman Diamond Co. Inc. filed a reorganization plan, which has been conditionally approved as part of its effort to emerge from Chapter 11 bankruptcy. The company filed for protection in May 2014 to fend off Bank Leumi from shutting down its operations. Since that time, Waldman has continued to operate, implemented cost-cutting measures and paid down its debt to Leumi to about $4.7 million from $13 million. The bankruptcy exit plan targets paying off Leumi by October, along with applicable fees and interest, in order to successfully emerge from Chapter 11. It also proposes paying off vendor claims of $600,000 over a span of eight quarters from November 2015 to 2017.

Adam D. Stein-Sapir, a portfolio manager at Pioneer Funding Group LLC, which specializes in bankruptcies, noted that the exit plans treatment of vendor claims is aggressive. "The Waldmans are retaining their equity, while leaving vendor claims impaired and it remains to be seen whether creditors will vote in favor of that treatment. However, it may be their best option as a liquidation would likely leave them with nothing."

Target the Future When Marketing Diamonds

The future is bright for the diamond industry -- if players position themselves accordingly, Philippe Mellier, the CEO of De Beers, told Forevermark partners in Manhattan on January 7. Mellier stated that U.S. Christmas retail sales for the jewelry sector rose by low-single-digit percentages, with 74% of Forevermark shops either flat or slightly up from 2013. Nonetheless, Forevermark branded diamonds carry higher margins.

Insiders who spoke with Rapaport News generally agreed with the growth estimates, defining Christmas as "ok" given broad-based sales increases of up to 3% at independent retailers. But the consumer market continues to shift their attitudes about diamonds, in comparison to other discretionary products, while the industrys share of advertising voice continues to decline.

Mellier added that Millennials, "the oxygen of future U.S." diamond sales, seek uniqueness and ethical reassurance from products they buy. "It is vital that we develop programs that both excite and build trust in diamonds if we are to engage the consumers of the future." Since Forevermark assists its partners with meeting marketing and growth challenges, he said that Forevermark Jewellers consistently achieve 10% to 15% premiums above generic diamond jewelry. "When you are in the business of marketing forever, you need to think long term," he said.

Misahara Opens in New York

Lepa Galeb-Roskopp opened the Misahara jewelry boutique at The Shops at The Plaza Hotel in New York City with 440 square feet of retail space and décor that embodies her avant-garde aesthetic. The handcrafted jewelry line is influenced by Roskopps Slavic roots as well as natures elements, such as the Adriatic Sea, and street-fashion from New York, Paris, South Africa, Montenegro, Dubai, St. Tropez and other luxury capitals of the world. The boutique introduces new products from the brand, including a mens cufflink collection in six styles: F-1, Adriatic, Sahara, Crown and Red Star cufflinks.

Pandora Assumes 78 Leases in Germany

Pandora entered into an agreement with DHG Gmph to assume commercial leases on up to 78 locations in Germany as part of the jewelry brands strategic expansion plans for concept stores. Pandora stated that it would pay a service fee to DHG for making the leases available, but the final amount is dependent on the number of leases.

The total investment for new owned and operated stores, including relocation of stores, costs related to temporarily inactive stores in the transition, service fees to DHG as well as all other costs is expected to be around $60 million (EUR 50 million). Most of the figure will be booked as capital expenses, and the impact on revenue and earnings before interest, taxes and amortization is expected to be limited due to the gradual roll out, according to the company.

Pandora recorded revenue of $60 million (DKK 372 million) in Germany during the first three quarters of 2014, representing an 8.1% increase compared with 2013. Pandora currently owns and operates 61 of 83 concept stores in Germany.

GJEPC Promotes Make in India Plan

The Gem & Jewellery Export Promotion Council (GJEPC) of India drafted a three-year plan that taps the "Make in India" program to boost exports. In the first year, the GJEPC would strive to implement the much-awaited turnover taxation system and a Special Notified Zone in Bharat Diamond Bourse to facilitate rough diamond trading on a consignment basis. Additionally, the GJEPC will champion India as a global diamond trading hub by further developing hard skills and talent, while working with the government to commission exploration programs and surveys to determine the availability of rough gemstones in the country. The government may spearhead initiatives to legalize current mining activity through licensing and develop a regulatory framework for new mining and exploration projects.

GJEPC’s short term goals also include a hike in drawback rates for gold and silver; abolishing the import duty on cut and polished colored gemstones; adding the gem and jewelry sector to the Interest Subvention Scheme and separating ITC HS Codes for man-made diamonds.

For the upcoming three years, GJEPC plans to secure more direct procurement of rough diamonds and colored stones; ascertain the availability of rough diamonds and colored gemstones in India; create a convention center in Mumbai; promote ties with jewelry centers such as Italy and Turkey and tap other potential markets for gems and jewelry products.

Royal Asscher Partners With Treliss Worldwide

Royal Asscher has partnered with Treliss Worldwide/CJ Exporters, enabling the diamond brand to combined efficient sourcing, manufacturing and operations with innovation, passion and integrity. The multigenerational companies share the vision of building exciting, new and innovative diamond products that celebrate love and life.

Edward Asscher, said, “We strongly believe that the future of the diamond and jewelry industry is in branding. Royal Asscher will bring 161 years of diamond heritage and royalty to the consumer which is unique and unprecedented.”

Nirav K. Mehta, of Treliss, said, “Treliss stands for tradition, excellence, leadership, innovation, standards and service. Treliss Worldwide/CJ Exporters has over 40 years of sourcing, polishing and manufacturing expertise. Through our vertically integrated global platform we bring sustainability and quality craftsmanship to the Royal Asscher brand.”

MINING 	  

Rockwell Adds Diamond Assets

Rockwell Diamonds Inc. entered into a conditional agreement to acquire alluvial diamond properties and associated equipment from Bondeo 140 CC and its affiliates for $28.5 million (ZAR 284.2 million). The assets are contiguous to Rockwells existing properties in the Middle Orange River region and will significantly enlarge its operating and resource base. The purchase is subject to regulatory approval. The company stated that $12 million will be paid for the mineral rights and three fit-for-purpose processing plants, while $16.5 million will be allocated for an earthmoving fleet and other associated equipment. Rockwell engaged Dundee Capital Markets to assist with its expected financing for part of the purchase price payable by Rockwell pursuant to the transaction.

Stellar Delays Baoulé Tender

Stellar Diamonds delayed its first sale of diamonds recovered from its Baoulé project in Guinea to later this month. It will send a parcel of approximately 1,250 carats of Baoulé rough diamonds to be sold together with diamonds previously sent to Antwerp in order to maximize revenue from the project. Earlier, Stellar shipped 941 carats from Baoulé and 3,700 carats of rough from the company’s other diamond projects to Antwerp.

True North to Update Project Report

True North Gems Inc. engaged TetraTech EBA of Vancouver, Canada to update the pre-feasibility study for its Aappaluttoq ruby and pink sapphire project in southwest Greenland. TetraTech is expected to release a revised technical report during the first quarter of 2015. True Norths existing pre-feasibility study dates back to 2011, but since that time, the company prepared additional engineering and market analysis studies. True North anticipates that the new pre-feasibility report will incorporate an updated mine plan, schedule, permit requirements and civil and flow-sheet engineering, along with a new economic assessment with a complete market analysis of ruby and sapphire demand across the luxury goods sector.

STATS 	  	Israel 

2014 $Mil. %Chng.
Polished exports $6,270 1%
Polished imports $4,510 5%
Net exports $1,760 -9%

Rough imports $4,020 1%
Rough exports $3,060 4%
Net imports $960 -9%

Net diamond account $800 -9%

U.S.A.

Nov. $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $1,900 0% $22,186 5%
Polished exports $1,621 2% $19,544 10%
Net imports $279 -8% $2,642 -21%

Rough imports $23 -69% $525 12%
Rough exports $8 -67% $345 29%
Net imports $15 -69% $180 -11%

Net diamond account $294 -16% $2,822 -20%

ECONWATCH 	  

Diamond Industry Stock Report

As major retailers began releasing Christmas sales comps, only JCP (+23%) was a real crowd pleaser by reporting solid same-store sales growth. Chow Tai Fook (+6%) led gains in Hong Kong; Europe was basically flat but LVMH (-2%) was lower. Indian shares were mixed but C.Mahendra (+20%) led gains and miners shares were mixed, pulled down by Peregrine (-11%). View the detailed industry stock report.
Jan. 8 Dec. 31 Chng.
$1 = Euro 0.848 0.827 0.021
$1 = Rupee 62.47 63.21 -0.7
$1 = Israel Shekel 3.95 3.90 0.05
$1 = Rand 11.59 11.57 0.02
$1 = Canadian Dollar 1.18 1.17 0.01

Precious Metals
Gold $1,207.80 $1,181.80 $26.00
Platinum $1,213.00 $1,200.00 $13.00

Stock Indexes Chng.
BSE 27,274.71 27,499.42 -224.71 -0.8%
Dow Jones 17,906.65 17,823.07 83.58 0.5%
FTSE 6,569.96 6,566.09 3.87 0.1%
Hang Seng 23,835.53 23,605.04 230.49 1.0%
S&P 500 2,062.11 2,058.90 3.21 0.2%
Yahoo! Jewelry 1,233.04 1,246.34 -13.30 -1.1%

Rapaport Weekly Market Comment Jan. 16, 2015

Rough prices under pressure. Indian diamond cutters reducing polished production as dealer demand slows in all market segments. De Beers relaxes deferment policy as sightholders plan to refuse 25% of rough allocation. Next week’s sight expected to value at $400M to $500M. Low expectations for Chinese New Year season after Chow Tai Fook 3Q sales -10%. U.S. retailers report higher than anticipated inventory as Christmas sales disappoint. U.S. Nov. jewelry store sales -7% to $2.7B. Tiffany & Co. Nov.-Dec. sales -1% to $1B. Richemont 3Q sales +4% to $3.6B. Michael Hill 1H +4% to $227M. Birks 3Q sales +3% $98M. Visitor registration opens for The Diamond Show – Basel 2015.
‎

RapNet Data: Jan. 15

Diamonds 1,525,096
Value $7,704,864,835
Carats 1,428,390
Average Discount -28.44%

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January 13-21 Tue-Wed

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January 14-21 Wed-Wed

Rapaport  Single Stone Auction 

New York & Israel

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The Diamond Show

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Learn More & Register:
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QUOTE OF THE WEEK
Rising costs elsewhere in the U.S., including healthcare and low earnings growth, have stunted retail sales at year-end. The trend in consumer spending remains positive but far from robust.

Lindsey Piegza | Stern Agee

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INDUSTRY 	  

Hayek: Words Fail Me on Ending Currency Cap

The Swiss franc initially surged 30% against the euro and shocked global markets lower when Switzerland’s central bank ended its effort to cap the currencys movement. “Words fail me,” Swatchs CEO Nick Hayek told Bloomberg News. He called the central banks actions a “tsunami” for the watch industry, Swiss exports, tourism and for the entire country in general.

With a stronger franc, watches will become more expensive for weaker currencies. But the segment has already had a difficult year following Novembers watch export decline of 4% to $2.14 billion. Exports of Swiss watches have risen only 2.3% in the first 11 months to approximately $21 billion.

U.S. Jewelry Store Sales -7%

U.S. specialty jewelry store sales fell 7.1% year on year to $2.734 billion in November -- the latest sign that jewelers in the U.S. have been facing economic headwinds. Furthermore, the sales figures from November, the month that marks the beginning of the Christmas-shopping season, reflected the sharpest drop in monthly sales since April 2012 when they fell 10.3% year on year to $2 billion. The November results followed a 3.9% decline in October. Still, specialty jewelry store sales have managed to increase 2.2% to $27.472 billion for the first 11 months of 2014.

Meanwhile, as reported earlier by Rapaport News, U.S. jewelry and watch sales across all channels rose by a preliminary 1.4% year on year to $7.127 billion in November, but that figure is subject to several revisions. Rapaport News estimates that sales across the entire U.S. jewelry and watch sector have risen 2.1% to $63.58 billion for the first 11 months of the year.

DDC Hosts India Week

The Diamond Dealers Club (DDC) of New York hosted India Diamond Week on the trading floor, attracting roughly 70 exhibitors and hundreds of attendees. The trade event was coordinated with the Gem & Jewellery Export Promotion Council (GJEPC) and was planned to coincide with post-Christmas buyer demand. Reuven Kaufman, the DDCs president, explained that these trading events are a true gem for local diamond dealers and it is important to provide these opportunities for all participants.

Trading activity was similar to the first India week, held in August, as demand was centered on 0.50-carat to 1-carat, G-I, SI-I diamonds. Overall, the mood has improved following a weak fourth quarter of 2014, and Indians would like to make this trading event a more frequent occurrence.

RETAIL & WHOLESALE 	  

Chow Tai Fooks 3Q Sales -10%

Chow Tai Fook reported that group sales fell 10% year on year for the third quarter that ended on December 31, according to preliminary estimates that did not include hard totals. Same-store sales fell 18%, with a pronounced decline of 21% in Hong Kong and Macau and a 15% drop in Mainland China.

Gem-set jewelry sales fell 12%, which the company attributed to weak consumer demand for high-end jewelry in Hong Kong and Macau. Gold product sales declined 21%, in part due to difficult comparisons from very high demand one year ago. Chow Tai Fook added 55 jewelry stores and one Hearts On Fire standalone store in Shanghai, while closing five watch point-of-sale locations. The company operated 2,243 points of sale as of December 31.

Tiffanys Christmas Sales -1%

Tiffany & Co. reported that revenue fell 1% year on year to $1.02 billion for two-month Christmas season that ended on December 31. Comparable-store sales were flat. The retailer admitted Christmas was disappointing, with significant variability in performance by region and by product category. Asia-Pacific showed solid sales growth, sales in Japan continued to be weak, European sales rose quite nicely; however, sales in the Americas declined. Strong and concentrated marketing boosted Tiffany T growth for fashion gold jewelry; however, that success did not translate into broader sales momentum.

Sales and same-store revenue across the Americas region fell 1%, while in the Asia-Pacific region, and on a constant-exchange-rate basis, revenue increased 10% and comparable-store sales rose 6 percent. In Japan, on a constant-exchange-rate basis, sales declined 3%, while same-store sales dropped 8 percent. Sales across Europe, on a constant-exchange-rate basis, increased 9% and comparable-store sales rose 4%.

Richemonts 3Q Sales +4%

Richemont reported that its sales increased 4% year on year to $3.59 billion (EUR 3.05 billion) during the third quarter that ended on December 31. The company noted that sales measured at constant-exchange-rates were flat due to mixed retail trends across major global markets.

Sales from jewelry maisons rose 3% to $1.85 billion but they fell 1% at constant-exchange-rates. Richemonts sales from its specialist watchmakers were flat at $961 million and down 4% at constant rates. The company said that sales growth in the Americas and Europe during the Christmas shopping season was partially offset by declining revenue from Japan and the Asia-Pacific region. The company specifically noted a poor trading environment in Hong Kong during period, a major market for its Swiss watch products.

Michael Hills 1H Sales +4%

Michael Hill International reported that revenue improved 3.9% year on year to $227 million (AUD 279.3 million) for the six months that ended on December 31, according to preliminary totals that excluded Emma & Roe stores. However, on a same-store basis, sales rose 0.8%. In local currency, Michael Hills sales in Australia -- the jewelers largest market -- fell 0.7%, however, in New Zealand revenue rose 3.8%. In Canada, sales jumped 18.5% and they rose by nearly as much in the U.S. Michael Hill opened eight new stores during the first six months and closed one.

Birks Group Comps Rise in 3Q

Birks Group Inc. reported that revenue rose 3.2% year on year to $97.6 million in the third quarter that ended on December 28. The increase reflected higher comparable-store sales, which rose 11%, offset by $3.8 million of lower reported sales due to a weaker Canada dollar and a drop of $1.5 million in revenue due to having closed four locations this year. Same-store sales jumped 17% in the U.S. and 5% in Canada during the quarter.

Specifically for the Christmas season (November 2 to December 27), Birks reported that comparable-store sales rose 7%, with same-store sales up 11% in the U.S. and 3% in Canada. Sales growth was primarily the result of Birks growing its average sales transaction value and strong watch brand revenue.

Lazare Kaplan Expects Sales Decline

Lazare Kaplan International anticipates that revenue will drop nearly 61% year on year to $11.4 million for the second quarter that ended on November 30. The company informed the Securities & Exchange Commission that its financial report would be late, citing its inability to resolve material uncertainties pertaining to the recovery of certain assets and the potential obligations under lines of credit. Sales were expected to total $10.1 million during the quarter, down from $13.5 million one year earlier, as sales from commercial (non-branded) and branded polished diamond decreased. Lazare Kaplan collected $1.3 million in other revenue.

The company continues to battle with Antwerp Diamond Bank and KBC Bank in Belgium and U.S. courts, charging the institutions with numerous fraudulent actions. Once the material uncertainties are resolved, Lazare Kaplan intends to file official financial reports dating back to May 2009.

SLANE Ends Wholesale Operations

SLANE announced plans to discontinue its wholesale operations while considering a new direction. SLANE will begin to sell down its inventory and continue to take production orders until January 30. The company will not open additional wholesale accounts. The brands ecommerce site will remain live. SLANE will continue to develop collaborative projects with partners, such as Forevermark, according to company founders and sisters, Landon Slane and Heath Slane.

Laxmi Consolidates U.S. Divisions

Diamond and jewelry manufacturer The Laxmi Diamond Group will combine its two U.S. divisions -- Sumit Diamond Group and Suberi Brothers -- as part of a strategic development plan. The combined operation will operate from Sumit’s existing premises at 592 Fifth Avenue in Manhattan. With the reorganization, the company seeks to pool talent and resources while elevating the level of product and service offered to its customers, according to a company statement.

The new division will be collaboratively led by Nick Parekh, Amit Javeri and Nitin Gajera and offer retailers a wide array of both bridal and fashion jewelry. Laxmi Diamond stated that its 2014 acquisition of a stake in Sumit Diamond Corporation, followed by this restructuring plan, is a strong indication of the companys outlook for the U.S. jewelry market since the nation leads the world in retail jewelry consumption.

James Avery Captures the New Consumer

Luxury jewelry consumers in the U.S. are applying demanding standards and shopping for simplicity, according to Pam Danziger, the president of Unity Marketing. While many jewelers qualify to meet that shift, affluent consumers need to hear the story from all the retailers they engage. Some of the brands that are succeeding, according to Danziger, include Alex and Ani, Fischer Voyage, Bonobos, Shinola and Warby Parker, all of which support "Made in the U.S." campaigns.

But Danziger called out jeweler James Avery, in particular, for telling a story of simplicity and meaning, which is capturing affluent consumers back-to-basics mood. The "Made in the U.S." motto resonates powerfully with James Averys artisan jewelry and four basic values: simplicity, integrity, meaning and universality. Brand storytelling is a key component of James Avery marketing, which is reflected on its website, Facebook postings and in the store, where product displays are arranged in a series of theme-based shops, including Milestone Creations for wedding bands and spiritual products and the Charm Bar to create customized and personalized bracelets, Danziger said.

Luxury brands that directly or indirectly carry on a story of "elitism disguised as exclusivity" will lose marketshare, she concluded. Design excellence and workmanship alone were supposed to create desire and aspiration for luxury shoppers to show off -- but affluents today no longer buy it, especially the millennial generation.

Pure Gold to Open at Singapore Airport

Pure Gold Jewellers became the first jewelry company from the Middle East to operate a jewelry concession at Singapore Changi Airport’s departure in terminal 1. Firoz Merchant, the chairman and founder of Pure Gold Jewellers, explained that the airport is one of the busiest in Asia and the new concession will boost the brands travel retail business. Pure Gold is already the largest duty-free operator of jewelry in the Middle East region and operates at several locations -- all terminals at Abu Dhabi and Kuwait International Airports, Jordan Duty Free, Kuwait Duty Free, Muscat Duty Free, Dubai Duty Free and Sri Lanka Duty Free.

Pure Gold Jewellers also opened a new outlet in Abu Dhabis destination shopping mall, Bawabat Al Sharq Mall, which is already home to an extensive variety of retail brands. The new location marks Pure Gold Jewellers eleventh in Abu Dhabi.

Richline Partners With Omate

Richline Brands and hardware and software design firm Omate signed an agreement to collaborate on wearable technology jewelry and watches. Omate operates as a vertically integrated design house based in Shenzhen, China, where it designs and retails ready-to-wear products that are presold throughout its online store and through distributors worldwide. Richline Group contended that in the smartwatch segment, two worlds are merging together: the traditional 100 year old watch industry and the high-tech hardware and software industry so it is preparing to become a major playe

GENERAL 	  

Kingold Progresses on Construction

Kingold Jewelry Inc. stated that it wrapped up the first phase of construction for the Kingold Jewelry International Industry Park in Wuhan, China, following completion of outer framing. The second construction phase will be focused on the exterior and interior decoration and design, according to a company notice. Kingold Jewelry, which manufactures and designs 24-karat gold jewelry, ornaments and investment-oriented gold products, expects to complete the jewelry complex this year and host a grand opening in December 2015.

Tilles, Miller Return to CIRCA

CIRCA appointed Richard Tilles as the president of its core division to manage all buying and selling activity of pre-owned jewelry, watches and gemstones as well as day-to-day oversight of the companys 13 buying offices in the U.S., Europe and Asia. Tilles was the founding member of CIRCA in 2001 and brings more than 20 years of experience in managing and operating businesses in the pre-owned jewelry market. He most recently served as president of Richard Tilles Inc.

CIRCA appointed Edward Miller as the senior director of CIRCA Solutions, where he will assume overall management for all buying and selling of luxury watches and branded jewelry from manufacturers, distributors and retailers. Miller was a founding member of CIRCA Solutions in 2007 and brings more than 40 years of experience in managing and operating businesses in the inventory overstock market. Most recently, he served as president of Diane Sales, a company primarily involved in buying and selling overstocked watches and jewelry.

Vaibhav Repays Term Loan

Indias Vaibhav Global Ltd. informed the Bombay Stock Exchange (BSE) that it had repaid a $1.5 million (INR 90.414 million) working capital term loan, plus interest, to a consortium of bankers. Vaibhav Global, which was formerly known as Vaibhav Gems, operates electronic retail channels and a traditional business-to-business wholesale distribution network through STS Jewels. The company manufactures and distributes a range of gemstone jewelry, timepieces and fashion accessories.

JA Acquires National Jeweler

Jewelers of America (JA) acquired National Jeweler from Emerald Expositions, which owns the JA New York shows and Couture. JA’s board approved the acquisition without disclosing the deals financial terms and it will take effect later in January. JA and National Jeweler will remain and act independent of each other. Both organizations were established in 1906, with JA serving as a forum for the analysis and discussion of issues affecting the industry and a platform for which National Jeweler has been since its inception.

De Beers Opens New Business Incubator

De Beers Consolidated Mines (DBCM) opened a business incubator in Cape Town as part of a program to encourage entrepreneurship among historically disadvantaged South African communities. The De Beers Marine Zimele Business Hub is DBCMs first incubator in South Africas Western Cape Province. The Cape Town hub joins four Zimele hubs located in each of the other South African provinces where DBCM operates, the Northern Cape, Limpopo, Gauteng and the Free State.

Lindiwe Zulu, South Africas small business development minister, attended the launch in a show of support for greater entrepreneurial activity in the country. In 2014, De Beers Zimele supported 233 new small and medium-sized businesses that were collectively responsible for creating 2,335 jobs, according to DBCM. The company reported that the fund also provided a total of $5.3 million (ZAR 60.7 million) in loans to entrepreneurs last year.

MINING 	  

Rockwell Reports $4M Loss

Rockwell Diamonds reported that revenue increased 59% year on year to $15.8 million (CAD18.9 million) during the third quarter that ended on November 30. Sales were given a boost from an increase in the volume of rough diamonds that were sold. Management stated that the latest reporting period represented the tenth consecutive quarter of increased diamond revenue. Rockwell declared a loss of $4 million compared with a loss of $318,000 one year earlier, due to a steep decline in profitability and a reduced recovery of large diamonds, which negatively impacted its sale price per carat. Ultimately, the average price achieved on rough diamonds dropped 32% to $1,267 per carat

Mountain Province Nears Funding Approval

Mountain Province Diamonds Inc. confirmed that it continues to move toward arranging its previously announced $370 million term-loan facility. Finalizing the funds is subject to customary conditions, including final credit approval and an agreement on documentation, which is expected shortly. Mountain Province Diamonds is a 49% participant with De Beers Canada in the Gahcho Kué diamond mine that is located in Canadas Northwest Territories. The Gahcho Kué project consists of a cluster of four diamondiferous kimberlites, three of which have a probable mineral reserve of 35.4 million tonnes, grading at 1.57 carats per tonne for total diamond content of 55.5 million carats.

ECONWATCH 	  

Diamond Industry Stock Report

Weaker than expected Christmas sales sank every U.S. firm we track, with shares falling by mid-single-digits or more. Birks (-19%), Movado (-17%), Tiffany (-18%) lead declines. Chow Tai Fook (-9%) lead declines in the Far East. Europe was mixed but Swiss bank action sank Richemont (-16%) and Swatch (14%) at the last minute. Indian shares were mainly lower, except Classic (+12%), Goenka (+27%), Winsome (+17%) and Vaibhav (+8%). Mining shares were all lower except ALROSA (+14%), True North (+17%) and Gemfields (+8%). View the detailed industry stock report.
Jan. 15 Jan. 8 Chng.
$1 = Euro 0.860 0.848 0.012
$1 = Rupee 61.88 62.47 -0.6
$1 = Israel Shekel 3.92 3.95 -0.03
$1 = Rand 11.56 11.59 -0.03
$1 = Canadian Dollar 1.20 1.18 0.02

Precious Metals
Gold $1,258.90 $1,207.80 $51.10
Platinum $1,253.00 $1,213.00 $40.00

Stock Indexes Chng.
BSE 28,075.55 27,274.71 800.84 2.9%
Dow Jones 17,320.71 17,906.65 -585.94 -3.3%
FTSE 6,498.78 6,569.96 -71.18 -1.1%
Hang Seng 24,350.91 23,835.53 515.38 2.2%
S&P 500 1,992.67 2,062.11 -69.44 -3.4%
Yahoo! Jewelry 1,240.79 1,233.04 7.75 0.6%

Rapaport Weekly Market Comment Jan. 23, 2015

Polished market improves with steady U.S. demand for I1-I2 clarity diamonds. Dealers lacking in confidence as buyers push for lower prices. Far East markets cautious ahead of Lunar New Year as China’s 2014 GDP growth slows to 7.4%. De Beers reduces prices as sightholders defer 20% to 25% of rough at Jan. sight. Okavango sells 3.2M Cts. for $552M ($168/ct.) in 2014. Rio Tinto’s 4Q diamond production -37% to 2.8M Cts. Swiss watch industry hurt by currency appreciation. Luk Fook 3Q same-store sales -7%. Indias Dec. polished exports flat at $1.5B, rough imports -13% to $1.4B, net diamond account +62% to deficit of $314M. Platinum Guild International appoints Huw Daniel as CEO.

RapNet Data: Jan. 22

Diamonds 1,480,515
Value $7,864,704,715
Carats 1,437,783
Average Discount -28.57%

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RAPAPORT ANNOUNCEMENTS

RapNet is Fully Mobile 

App now available on iOS and Android

www.rapnet.com/mobileapp

February 4-12 Wed-Thu

Rapaport  Single Stone Auction 

New York & Israel

www.rapaportauctions.com

February 10-18 Tue-Wed

Rapaport Melee Auction

New York & Dubai

View Details. March 19-23 Thu-Mon

The Diamond Show

Basel, Switzerland

Learn More & Register:
www.thediamondshow.net

QUOTE OF THE WEEK
Forward contract sales will offer a wider range of products, including some of our 2-carat-plus products for the first time. The one-off set of forward contract auctions will provide our customers with a highly convenient way to secure the products they require for delivery in any one of the four cycles between March and July, or any combination of these delivery periods that suit their needs.

Neil Ventura | De Beers

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 Adjusts FCS Program

De Beers unveiled an adjusted 2015 Forward Contract Sales (FCS) program for its auction sales business and introduced some changes following feedback from clients. A single FCS event will first take place in March, where registered customers will have the opportunity to bid for future supply of a wider range of products (from the 2-carat-plus, grainers and smalls categories), available in multiple-unit volume and over one, two, three and four-cycle contract durations.

FCS was launched in 2014 in response from customers seeking either to lock in short-term security of supply that spot-sales cannot provide, or to complement their existing long-term supply contracts. The program allows buyers to bid on all future contracts offered, or any combination, and to bid for the volume of products they require in each contract. This allows buyers the flexibility to construct their own bespoke supply contracts. Customers with a track record of demonstrated demand will be notified and provided the full details in due course. Any customers new to auction sales or yet to participate in FCS can find out more via their account managers.

U.S. Jewelry CPI -5%

The U.S. consumer price index (CPI) for jewelry dropped 5.1% year on year to 161.75 points in December, which was about 4 points lower than Novembers reading and the lowest since July 2010. The average jewelry CPI for 2014 slipped 4% to 170.58 points and it was the lowest reading since 2010 when the index held at 161.24 points. Comparatively, the CPI for watches reflected a more stable environment in December as the index slipped only 1% year on year to 119.73 points and it was down 1.6 points from Novembers reading. However, the average CPI increased 0.5% during 2014 to close at a record high of 122.2 points.

Meanwhile, diamond prices contracted in 2014, according to the RapNet Diamond Index (RAPI), the global benchmark for polished prices. RAPI for 1.00-carat diamonds plunged 8.7% year on year, while RAPI for 3.00-carat dropped 6.6% and 0.30-carat fell 6.5%. Only prices for 0.50-carat diamonds held steady, or up 0.1%, according to RAPI. Gold prices in 2014, while at times reacting wildly to global and economic events, closed the year slightly lower, falling by 1.5% compared with 2013. But prices for silver plunged 19% and platinum was off by 12% in 2014.

The CPI for all consumable product categories in December rose 1.7% year on year to 236.38 points, closing out the year with an average CPI up 1.5% to a record 237.09 points.

RETAIL & WHOLESALE 	  

Luk Fook Comps -7%

Luk Fook Holdings reported that same-store sales fell 7% year on year in the third quarter that ended on December 31. The decline resulted from weak consumer sentiment and the impact of the Occupy Central movement on retail sales, the company explained. The groups gem-set jewelry same-store sales fell 8%, while gold same-store sales dropped 6%, but by weight, gold same-store sales were flat.

Same-store sales in Hong Kong and Macau fell 6%. Gem-set jewelry same-store sales in Hong Kong and Macau dropped 9% and gold same-store sales fell 5% by value, but rose 1% by weight, aided by a mini-gold rush in November due to lower gold prices. In Mainland China, same-store sales declined 11% during the third quarter, with gem-set jewelry same-store sales up 13% but gold sales down by 16%.

Invest to Capture Future Success

Philippe Mellier, De Beers CEO, told sightholders that maintaining success in the diamond industry is dependent upon investment to sustain supply, financing and demand. De Beers, of course, is investing heavily in mining projects across Botswana, South Africa and Canada to deliver a sustainable supply along with creating consumer demand through the Forevermark brand.

Mellier explained that sightholders must also invest, whether the focus is on economies of scale, improved use of technology or more efficient distribution. Capturing value in the midstream requires ongoing investment so that customer demand remains strong. “We believe that the industry is approaching one of the greatest periods of opportunity in living memory and we are committing to major investments across the pipeline so that we can unlock the full value presented by the industry’s outstanding fundamentals,” he said.

Tara Adds Shop-In-Shop Outlets

Tara Jewellers opened four additional shop-in-shop format outlets to showcase certified diamond and hallmarked gold jewelry. The new outlets are located at Shoppers Stop stores in the Alpha One Mall, Amritsar; Prozone Mall, Aurangabad; Eros Mall, Delhi and The Great India Palace in Noida. Tara Jewellers now has 10 shop-in-shop counters in addition to owner-operated stores across India. Rajeev Sheth, the chairman and managing director of Tara Jewels Limited, explained that Tara Jewellers outlets cater to consumer demand for elegant light-weight diamond jewelry.

ADK Plans Rough Diamond Event

The Antwerpsche Diamantkring (ADK) will organize a rough diamond event at the trading hall on February 25 and 26. ADK held a similar event in November which was met with great success. The rough diamond bourse opened its doors to exhibitors who were members of Antwerp’s four diamond bourses, buyers who were members of the World Federation of Diamond Bourses, their affiliates and their clients.

A. Jaffe Introduces Maps

A. Jaffe introduced an extension to the brands luxury bridal line called "Maps," a collection of customized jewelry that uses patented technology to create a virtual map of any location and pinpoint an exact spot with a diamond. The collection features pendants, bracelets, or charms in rose gold, white gold and sterling silver, with a line of cufflinks being introduced this spring. The brand noted that a trend toward personalized gifting is growing stronger, especially for special occasions such as Valentines Day or a graduation.

Kingold May Presell Commercial Space

The Wuhan Housing Security and Management Bureau in Wuhan, China gave the green light to Kingold Jewelry Inc. to presell commercial property at the Kingold Jewelry International Industrial Park (Jewelry Park). The bureau authorized presales through two certificates, which cover five commercial buildings that occupy approximately 123,600 square meters, according to Kingold. The Jewelry Parks outer shell was recently completed, ending the first phase of construction on the massive project. Kingold anticipates using proceeds from early property sales to complete construction on the Jewelry Park, which is scheduled for completion this year and host a grand opening in December.

PGI Names Daniel as CEO

Platinum Guild International (PGI) appointed Huw Daniel as the groups CEO, succeeding James Courage who will retire from his post at the end of April. While the appointment is immediate, Daniel will take on full responsibility for PGI on April 1. PGI will also relocate its head office from London to Hong Kong with the aim of being fully operational by the summertime.

PGI USA, appointed Jenny Luker as president effective on February 2. Luker joined the company in its Newport Beach, California office in 1995 after completing post graduate education. Over the ensuing years she worked across every function in the company, including marketing, public relations and industry relations. Since 2005, she has served as PGI USAs senior vice president, with a focus on building platinum sales with key strategic partners.

Sierra Leone Gains Support for Factory

Peace Diamonds, a ReGrow West Africa development model, brought together private and public sector partners to create West Africas first sustainable diamond cutting and polishing factory, which is a priority for Sierra Leones Ministry of Mines and Minerals. The benefits of a local cutting and polishing factory include job and skill creation, enhancing government tax revenue, decreasing the financial incentives of smuggling diamonds and generally improves the transparency of diamond supply chains.

The project was discussed on the sidelines of Davos and still must overcome barriers, such as the absence of diamond processing skills and the lack of a reliable public electricity grid in Sierra Leone.

"Peace Diamonds is an innovative and compelling project," said Jeffrey Wright, a RESOLVE board member. "It includes a green energy system to power the factory, significant local ownership of the company that will own and operate the plant, and heavy investment in training local workers. Ultimately Sierra Leone needs to catalyze businesses such as this for its key value chains. Peace Diamonds creates new partnerships with leaders in the jewelry sector, which in turn brings more value home to miners in Sierra Leone."

AWDC Hosts Financing Talk in Davos

The Antwerp World Diamond Centre (AWDC) hosted a diamond-financing seminar in Davos, introduced by Flemish Minister, Geert Bourgeois. Only 5% of global financial institutions are involved in diamond industry financing, so participants were given information on the underlying dynamics of the global diamond industry, the future outlook and challenges ahead, especially in terms of sustainable financing. AWDC also provided insight into the growing demand for diamonds as an investment product. ABN Amros Sabine Smets, the head of diamond and jewelry clients for Belgium, elaborated on the future prospects for diamond financing from a bankers perspective.

Groom Next-Gen Owners Early

Henry Hutcheson, the president of Family Business USA, said handing the family enterprise over to the next generation can be an exciting moment, as long as the elders have prepared, according to his book “Dirty Little Secrets of Family Business.” Begin grooming the next leader in advance by testing their abilities as employees. Find initiatives for them to own that involve group dynamics, but also assign projects where they hold sole responsibility for the outcome.

“It’s critical when you are selecting the next leader to realize that it’s not about who will lead,” Hutcheson said. “It is about ensuring that those who are not selected are in support of the decision and can work as a team with the new leader.” There are four key dynamics in a successful transition. First, the heir must have confidence in themselves, their thoughts and in their beliefs. “Much of this can be developed while working in the family business by constructing and leading significant projects,” Hutcheson said. But one shortcut is to have them work elsewhere early on.

Secondly, being competent also means developing bottom-up experience and being familiar with every aspect of the firm. Doing day-to-day grunt work can pay dividends down the line. Hutcheson said the third benchmark is measured by those who not only work well with people, but perceive the emotional state of others -- and react to it appropriately. Finally, the next family business leader must be measured at the same level of everyone else. “This will show that he or she is part of the team and that they want to be judged on the merits of their work, not a bloodline,” Hutcheson said. It will also help the next generation gain the respect of co-workers.

MINING 	  

Rio Tintos Rough Output -37%

Rio Tinto’s total rough diamond output declined 37% year on year to 2.841 million carats during the fourth quarter that ended on December 31. The company attributed the sharp reduction in output to a maintenance shutdown and the transition from open pit to underground mining at its Argyle mine in Australia, and a shift toward processing lower-grade ore at its Diavik mine in Canada. Production at Argyle fell 43% to 1.813 million carats during the quarter. Rio Tinto’s share from Diavik fell 25% to 927,000 carats. The company’s 78% share of output from the Murowa mine in Zimbabwe fell 4% to 101,000 carats.

For the calendar year, Rio Tinto’s annual rough diamond production dropped 14% to 13.872 million carats.

Diavik Production -25%

The Diavik diamond mines production dropped 25% year on year to 1.54 million carats in the fourth quarter that ended on December 31. Diamond recovery weakened as a result of lower realized grades in all three ore bodies at Diavik and a higher proportion of the lower grade from A154 North. Despite the steep drop in production, full calendar year production was basically flat at 7.34 million carats, according to Dominion Diamond Corporation, which owns a 40% share in Diavik. Rio Tinto owns the remaining 60% stake.

A new mine plan and budget for calendar 2015 has been approved by both parties. Diavik is expected to produce 6.7 million carats this year. Mining activity will be exclusively underground, but in addition to the projected carat production from run of mine ore, there will be production from coarse ore rejects, which was not included in the outlook.

STATS

India

Dec. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,452 0% $22,210 8%
Polished imports $442 16% $7,534 10%
Net exports $1,010 40% $14,676 8%

Rough imports $1,431 -13% $17,533 8%
Rough exports $108 3% $1,497 -16%
Net imports $1,324 -15% $16,036 10%

Net diamond account ($314) 62% ($1,360) 51%

ECONWATCH 	  

Diamond Industry Stock Report

Most retail shares recovered from last weeks slump with U.S. firms higher except for Birks (-2%) and JCP (-3%), while Far East was mixed but Luk Fook (-3%) led declines. Swiss shares lower led by Swatch (-7%) and Richemont (-3%). India mixed as Rajesh (+12%) led gains and Classic (-5%) led declines. Mining shares mainly higher with ALROSA (+13%) hitting a new high. View the detailed industry stock report.
Jan. 22 Jan. 15 Chng.
$1 = Euro 0.882 0.860 0.022
$1 = Rupee 61.39 61.88 -0.5
$1 = Israel Shekel 3.95 3.92 0.03
$1 = Rand 11.40 11.56 -0.16
$1 = Canadian Dollar 1.24 1.20 0.04

Precious Metals
Gold $1,302.20 $1,258.90 $43.30
Platinum $1,280.00 $1,253.00 $27.00

Stock Indexes Chng.
BSE 29,006.02 28,075.55 930.47 3.3%
Dow Jones 17,813.98 17,320.71 493.27 2.8%
FTSE 6,796.63 6,498.78 297.85 4.6%
Hang Seng 24,522.63 24,350.91 171.72 0.7%
S&P 500 2,063.15 1,992.67 70.48 3.5%
Yahoo! Jewelry 1,276.16 1,240.79 35.37 2.9%

Rapaport Weekly Market Comment Jan. 30, 2015

Polished demand improving but prices under pressure. Confidence is weak ahead of the Chinese New Year as markets look to the U.S. for support. Rough weak and discounted as cutters cut back following De Beers 4% price reduction at $450M Jan. sight. De Beers 2014 production +5% to 32.6M cts. ALROSA 2014 production -2% to 36.2M cts., with prices +7% and sales over $5B. Letšeng 4Q sales -10% to $68M, average price -16% to $2,140/ct. Petra Diamonds 1H production -2% to 1.6M cts., sales +16% to $215M. India’s Titan Company 3Q sales +9% to $475M, profit +15% to $31M. Hong Kong’s 2014 polished imports +9% to $19.6B, polished exports +13% to $13.7B.

RapNet Data: Jan. 29

Diamonds 1,409,443
Value $8,017,029,664
Carats 1,397,149
Average Discount -29.2%

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RAPAPORT ANNOUNCEMENTS
February 3-8 Tue-Sun

Rapaport at AGTA Gemfair 

Tucson, Arizona
Visit Rapaport at Booth 8
AGTA website

February 4-12 Wed-Thu

Rapaport  Single Stone Auction 

New York & Israel
Tel. 1.212.354.9100
www.rapaportauctions.com

February 10-18 Tue-Wed

Rapaport Melee Auction

New York & Dubai
Tel. 1.212.354.9100
View Details.

March 19-23 Thu-Mon

The Diamond Show

Basel, Switzerland

Learn More & Register:
www.thediamondshow.net

QUOTE OF THE WEEK
Nation state actors, cybercriminals and hacktivists are increasingly targeting U.S. retailers on a scale never seen before. In the face of these cyberattacks, retailers are committed to fostering and enhancing customer trust, which is why we support a federal data breach law to provide consumers the clear communication they deserve and give businesses a single, national standard when cybercriminals defeat defenses and steal sensitive data.

Nicholas Ahrens | RILA

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 Valued at $450M

De Beers first sight of 2015 closed with an estimated value of $450 million and it reflected a softer rough market with significant price adjustments that were made across the board, pushing overall rough diamond prices down by an estimated 4%.

Still, there were no significant changes in box assortment qualities. Sightholders said that a sizable number of boxes were deferred, representing about 20% of the overall sight value. De Beers temporarily relaxed sightholder allocation rules ahead of the January sight, allowing them to defer up to 25% to either the February or March sight without a penalty.

Sightholders reported that no ex-plan goods were made available during this sight. Market sentiment toward the rough market was uniformly negative, with the current price correction expected to continue until the end of the first quarter.

KP Chair Meets With Antwerp

Bernardo Campos of Angola, the 2015 chair of the Kimberley Process (KP), paid a visit to Antwerp and met with senior management of the Antwerp World Diamond Centre (AWDC), which operates as administrative support for the global body. Campos and AWDC leaders discussed KP affairs and set the administrative agenda for the coming year.

RETAIL & WHOLESALE 	  

Titans Profit +15%

Titan Company Ltd. reported that sales increased 9.2% year on year to $475.4 million (INR 29.225 billion) in the third quarter that ended on December 31. Company expenses rose 9.1% to $434.3 million and profit after taxes jumped 15.2% to $31 million. Titans watch segment sales declined 1.9% year on year to $72 million; however, jewelry segment sales jumped 11.2% to $381.8 million. Revenue from other segments, such as eyewear and engineering, improved 14.8% to $21.7 million. The firms jewelry brand, Tanishq, held two successful launches during the quarter to boost jewelry sales with “affordable Tanishq” and a new “wedding” campaign.

RJLs Profit +32%

Renaissance Jewellery Ltd. (RJL) reported that revenue increased 15.9% year on year to $69 million (INR 4.21 billion) in the third quarter that ended on December 31. The manufacturing firms expenses jumped 15.9% to $65 million and profit surged 31.6% to $3.6 million. Similarly, Renaissance Jewellerys results were equally as strong for the first three quarters of its fiscal year. Revenue rose 11.1% to $141 million, expenses jumped 10.7% to $134 million and profit increased 24.2% to $5.1 million.

U.S. Valentines Day Gift Intentions

While slightly more than half of the U.S. adult population celebrates Valentines Day, 91% of that segment intend to make a gift purchase, according to the National Retail Federation (NRF) and Prosper Insights & Analytics. The average budget for gifts, cards, jewelry and dining out came to $142.31, with men at $190.53 and women at $96.58.

Of those who celebrate, 21.1% (or 1 in 10 of all adults) plan to make a jewelry gift purchase, with the average amount expected at $172.38, up $10 from one year ago. However, the survey observed that only 11.9% of shoppers expected to visit a jewelry store to make a purchase. Top gift buying destinations included online (25.1%), discount stores (35.2%) and department stores (36.5%). Aside from jewelry, most popular gifts this year were very similar to previous surveys: candy (53.2%), greeting cards (51.4%), flowers (37.8%) and an evening out (35.1%).

The group observed that Valentine shoppers of 25 to 34 years of age will outspend other age groups at an average of $213.04, while 35 to 44 year olds will spend an average of $176.21 and 18 to 24 year olds will spend an average of $168.95.

CaratLane Raises $31M

CaratLane raised $31 million from Tiger Global toward technology development and for expanding its presence to offline stores. CaratLane had previously raised $15 million from Tiger Global in May 2013 and $6 million in June 2011. CaratLane launched in 2008 and offers various jewelry items and loose diamonds to consumers, as well as a "try on at home" option.

Rio Tinto’s Select Diamantaires for 2015

• Crossworks Manufacturing Ltd.
• CTF Diamond Trading Company Ltd
• Diambel N.V.
• Dianco B.V.B.A.
• Diarough N.V.
• Dimexon Diamonds Ltd.
• E. Schreiber, Inc.
• Gemmata N.V.
• Hari Krishna Exports Pvt Ltd
• IDH Diamonds N.V.
• Interjewel Pvt. Ltd.
• KP Sanghvi & Sons
• L&N Diamonds Ltd.
• Laurelton Diamonds
• Sheetal Group
• Signet Direct Diamond Sourcing Ltd
• Venus Jewel
Core Sales Dates Invitation Sales
Jan. 14-20 Feb. 19 - Mar. 2
Feb. 16-20 Apr. 28 - May 11
Mar. 26 - Apr. 1 July 9-17
Apr. 27-30 Sept. 24 - Oct. 5
June 1-5 Nov. 16-25
July 6-10
Aug. 18-24 Tender Sales
Sept. 21-25 Apr. 7-22
Oct. 26-30 Oct. 12-28
Dec. 14-18

Borhanjoo Joins Venus Jewel

Venus Jewel appointed Mahiar Borhanjoo as its managing director of Venus Jewel International. He will be focused on creating new business ventures and growing the global portfolio of Venus Jewel. Borhanjoo joins the firm with a wealth of industry experience, having spent the past six years as the executive sales director and senior vice president of sales at De Beers. He praised Venus Jewel for its ethics and transparency, passionate employees and executives and the use of cutting-edge technology.

GIA Updates Colored Stone, Pearl Reports

The Gemological Institute of America (GIA) will issue revised colored stone and pearl reports and launch Report Check enhancements on February 1. GIA improved gemstone images and the language used to reflect current gemological terminology. Report Check for colored stones and pearls will feature a new treatments tab, providing consumer- friendly gemological information using text, graphics and images about any treatments detected. GIA’s colored stone and pearl reports now feature a layout in portrait orientation and there will be one form – a Gemological Report – used for colored stones and pearls.

IJTs Attendance Sets Record

The 2015 International Jewellery Tokyo (IJT), which was held January 21 to 24, reported that 1,130 participating exhibitors and a record 26,820 trade buyers attended the event. IJT was hosted by Reed Exhibitions Japan Ltd. and the Japan Jewellery Association. Organizers concluded that a strong stock market and an optimistic economic forecast for Japan are leading to strong performance for the gem and jewelry sector this year. In support of that notion, they confirmed that already 83% of exhibiting space for IJT 2016 has been booked.

Gem-A Hosts Corp. Social Responsibility Courses

The Gemmological Association of Great Britain (Gem-A) opened enrollment for a corporate social responsibility course that offers six lessons developed in conjunction with Branded Trust and the educational arm of CIBJO. The course is offered online at csr.gem-a.com and was tailored to the industry professional to provide a foundation for incorporating ethical practices into any size of business, no matter where its function resides in the supply chain.

The lessons incorporate video, course notes, module tests and a final written essay. Part of the series involves expanding on several dimensions of the business case that will lead to improved business performance and increased awareness of the different techniques and tools that are available to assist in implementing a social responsibility program.

MINING

ALROSAs Sales +8%

ALROSAs diamond production fell 2% year on year to 36.21 million carats in 2014. The company sold 27.74 million carats of gem-quality rough at an average price of $171 per carat and 11.83 million carats of industrial-quality rough at an average price of $12 per carat. ALROSA noted that its rough diamond prices rose 7% on average during the year. Total sales rose 8.3% year on year to $5.05 billion, with $4.9 billion in rough diamond sales. ALROSA anticipates diamond production will increase 5% to 38 million carats in 2015. Sales volume will grow 1% to 40 million carats, with 2 million carats being sold out of existing inventory.

De Beers Production -8%

De Beers rough diamond production fell 8% year on year to 8.366 million carats during the fourth quarter of 2014; however, production for the full year rose 5% to 32.605 million carats. Production during the quarter at Debswana, De Beers Botswana subsidiary, fell 6% to 5.989 million carats across the Orapa, Jwaneng, Damtshaa and Letlhakane mines. In Namibia, Namdeb’s production increased 7% to 496,000 carats, while De Beers Canada saw production decline by 18% to 479,000 carats from the Snap Lake and Victor mines. Production from De Beers Consolidated Mines (DBCM) in South Africa dropped 19% to 1.402 million carats from the Kimberley, Venetia and Voorspoed mines.

For the full year, Debswana’s production grew 7% to 24.237 million carats with solid increases at both Orapa and Jwaneng. Namdeb’s production rose 7% to 1.886 million carats, while production at De Beers Canada fell 6% to 1.848 million carats. Production at DBCM fell 2% to 4.634 million carats.

Petras Sales +16%

Petra Diamonds production fell 2% year on year to 1.601 million carats during the first half that ended on December 31, while the weight of diamonds sold fell 1% to 1.402 million carats. Company revenue rose 16% to $214.8 million, boosted by $38.7 million in proceeds from two sales of large and exceptional diamonds. The average carat price during the period rose 18% to $154; however, overall prices fell between 8% and 9%. Petra lowered its guidance for prices in the first six months of 2015 due to seasonal softness, price pressures from short-term indigestion in the pipeline and healthy polished inventory levels. Petra raised its full-year production guidance by 3% to 3.3 million carats.

Gem Diamonds Sales -10%

Gem Diamonds sales fell 10% year on year to $67.7 million from its high-value Letšeng mine in Lesotho in the fourth quarter that ended on December 31. The company sold 31,614 carats of diamonds, up 6% year on year, while production fell 10% to 25,525 carats. Letšeng’s sales achieved an average price of $2,140 per carat during the quarter, which was down 18% from the third quarter and 16% below the fourth quarter of 2013. Thirteen exceptional rough diamonds sold for more than $1 million each, including a 112.60-carat white diamond that sold for $5.8 million and a 90.40-carat white diamond that sold for $4.2 million.

Sentiment in the rough and polished markets was cautious in the second half of 2014 due to constrained liquidity, which exerted downward pressure on rough diamond prices. However, Letšeng’s high-value rough production remained relatively resilient during the period.

Lucapa Secures Bridge Loan

Lucapa Diamond Company Ltd. secured a $15 million bridge financing facility for the Lulo diamond concession in Angola. The 12-month financing bridge is subject to the satisfactory completion of due diligence, investment approvals, security and customary legal documentation. Lucapa and the loan provider have agreed to enter into an exclusivity period of 40 days to complete those requirements. Since December, Lucapa has been evaluating a number of debt-financing proposals to fund efficiency and technology improvements for the first phase of alluvial diamond mining at Lulo.

Dominion Sizes Up Jay

Dominion Diamond Corporation completed a prefeasibility study on its Jay kimberlite pipe deposit, which is located within the buffer zone joint-venture property of the Ekati diamond mine in Canada’s Northwest Territories. The study evaluated Jay as a stand-alone open-pit operation that would supply ore to an existing processing plant at its full capacity of approximately 4.3 million dry metric tonnes per year for approximately 11 years beyond the current projected closure of Ekati in 2020. Jay would require construction of a water retention dike encircling the pipe, allowing the isolated area to be dewatered ahead of the start of pre-stripping and mining operations, the report noted.

IMR Estimate Rises for CH-6

Peregrine Diamonds Ltd. increase the inferred mineral resource (IMR) estimate for the upper 250 meters of the CH-6 kimberlite pipe by 15% and reported between a 23% and 26% increase in the estimate of additional kimberlite tonnage. In addition, tonnage estimates rose 35% to 51% for CH-7 and by as much as 56% for CH-44 kimberlite pipes. The CH-6, CH-7 and CH-44 kimberlite pipes are located on the Chidliak project on Baffin Island, 120 kilometers from Iqaluit, the capital of Nunavut, Canada.

STATS

Hong Kong

2014 $Mil. %Chng.
Polished imports $19,592 9%
Polished exports $13,744 13%
Net imports $5,848 0%

Rough imports $2,179 13%
Rough exports $2,311 -9%
Net imports ($132)

Net diamond account $5,716 9%

ECONWATCH 	  

Diamond Industry Stock Report

Gold resumed volatile trading, shedding $44 per oz. this week. U.S. retailers nearly all lower, led by Blue Nile (-6%), which reports next week. Far East mainly higher; Europe all higher led by LVMH (+5%). Indian shares mixed as Goenka (-14%) led declines and Ren. Jewellery (+20%) gained. Mining shares mixed with ALROSA (-2%) off its high last week, Kennady (-22%) brought the index down, but Peregrine (+50%) surged ahead. View the detailed industry stock report.
Jan. 29 Jan. 22 Chng.
$1 = Euro 0.882 0.882 0.000
$1 = Rupee 61.78 61.39 0.4
$1 = Israel Shekel 3.93 3.95 -0.02
$1 = Rand 11.56 11.40 0.16
$1 = Canadian Dollar 1.26 1.24 0.02

Precious Metals
Gold $1,258.00 $1,302.20 -$44.20
Platinum $1,219.00 $1,280.00 -$61.00

Stock Indexes Chng.
BSE 29,681.77 29,006.02 675.75 2.3%
Dow Jones 17,416.85 17,813.98 -397.13 -2.2%
FTSE 6,810.60 6,796.63 13.97 0.2%
Hang Seng 24,595.85 24,522.63 73.22 0.3%
S&P 500 2,021.26 2,063.15 -41.89 -2.0%
Yahoo! Jewelry 1,306.72 1,276.16 30.56 2.4%

Rapaport Weekly Market Comment Feb. 6, 2015

Polished demand very weak. Russians, Arabs and Chinese not buying as ruble and oil prices collapse and Chinese anti-corruption activity takes hold. Uncertainty amid concern that market has not bottomed out. Botswana factories cutting back due to unprofitable rough. U.S. 2014 jewelry sales flat at $69B. LVMH 2014 jewelry, watch sales +3% to $3.2B. Christie’s 2014 jewelry sales +7% to $740M, Sotheby’s +14% to $603M. U.S. Dec. polished imports +11% to $1.9B, polished exports +9% to $1.4B. Belgium’s Dec. polished exports +3% to $1.1B, rough imports -5% to $1B. ALROSA names 47 contract clients, ex-CEO Fyodor Andreev dies.

RapNet Data: Feb. 5

Diamonds 1,429,336
Value $7,789,238,334
Carats 1,367,361
Average Discount -28.41%

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RAPAPORT ANNOUNCEMENTS

February 4-12 Wed-Thu

Rapaport  Single Stone Auction 

New York & Israel
Tel. 1.212.354.9100
www.rapaportauctions.com

February 8-12 Sun-Thu

Intl. Diamond Week 

Ramat Gan, Israel

IDEs website

February 10-18 Tue-Wed

Rapaport Melee Auction

New York & Dubai
Tel. 1.212.354.9100
View Details.

March 19-23 Thu-Mon

The Diamond Show

Basel, Switzerland

Learn More & Register:
www.thediamondshow.net

QUOTE OF THE WEEK
Like Royal Asscher, we can reflect on a history of family traditions. The Uchihara family has been leading the company for four generations and we look forward to celebrating our 100th anniversary in 2020, the same year the Olympic games will be hosted in Tokyo; we are very excited to partner with famous Royal Asscher and expand their market penetration in Japan.

Ichiro Uchihara | The Uchihara Group

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 	  

Polished Prices Drop in January

Polished diamond demand improved in January but prices remained under pressure. Jewelers are resisting buying large quantities of diamonds as inventory levels remain higher than usual. Expectations are relatively low for jewelry sales during the Chinese New Year after a disappointing Christmas shopping season.

The RapNet Diamond Index (RAPI™) for 1-carat laboratory-graded diamonds fell 0.4% in January and RAPI for 0.30-carat diamonds dropped by 0.9%, while RAPI for 0.50-carat diamonds declined 1%. RAPI for 3-carat diamonds was flat during the month. The declines in January extended the downtrend that started in April 2014. Polished diamond prices remain significantly below levels recorded one year ago with RAPI for 1-carat diamonds down 10.2% year on year.

Dealers lack market confidence and suppliers are anxious to diminish inventory levels. India-based diamond manufacturers have reduced their polished production by an estimated 20% to 30% since returning from the Diwali break. “Rough prices must come down to the extent that diamond manufacturing is once again a profitable activity. Diamond prices can only be sustained and increased by raising demand, rather than limiting supply,” said Martin Rapaport, the chairman of the Rapaport Group.

U.S. Jewelry Sales Weaken

U.S. jewelry and watch sales across all channels closed out the year with disappointing results in December as sales fell 1.6% year on year to $15.245 billion, according to preliminary data. Furthermore, the government revised October and November sales lower to reflect sales declines for both of those months. Jewelry sales rose about 1.5% in the first quarter of 2014, but then growth picked up from May through August with solid year-on-year increases of between 3% and 4%. However, the sector experienced softness in September as sales rose just 1.2%, followed by a 1.3% decline in October. As the Christmas-season was heating up, jewelry sales fell 0.6% in November to $6.134 billion, a trend that carried through December as sales dropped 1.5% to $13.419 billion. For the year, jewelry sales were basically flat, or down 0.1% year on year, at $69.188 billion, according to preliminary data.

Watch sales were on a tear for the first eight months of 2014 as monthly growth rates measured between 2% and 5%, with the exception of March when revenue increased just 1.4%. However, in September, the consumer mood shifted as sales of watches were flat, but then, in October, they contracted 2.8% and they dropped 2.2% in November to $837 million, followed by a 2.5% decline in December at $1.83 billion. Strong sales earlier in the year, however, sustained watch sales growth through a disappointing Christmas season as the sector ended 2014 with revenue increasing 1.4% year on year to $9.461 billion.

December data for U.S. specialty jewelry stores will be released later, but widespread declines were observed at those establishments in November where sales fell 7.1% year on year to $2.734 billion. Specialty jewelry store sales had managed to increase 2.2% year on year to $27.472 billion for the first 11 months of 2014.

Swiss Watch Exports Decline

Swiss watch exports declined 3% year on year to $1.94 billion (CHF 1.80 billion) in December as exports to Hong Kong and China weakened. Wristwatch exports decreased by 3% to $1.83 billion, while other timepiece exports rose 6% to $108.1 million, according to figures provided by the Federation of the Swiss Watch Industry.

The weak performance of Swiss watch exports was driven by declining demand in Greater China and the U.S., which was only partially offset by growth in European markets and Japan. Exports to Hong Kong, the largest foreign market for Swiss watches, declined 10% to $338.2 million. Similarly, exports to China, the second-largest export market for Swiss watches, fell 27% to $111.9 million. In the U.S., exports dropped 1% to $184.4 million. Exports to Germany rose 2% to $105.7 million, while exports to Italy increased 2% to $104.2 million. Swiss watch exports to Japan increased 1% to $110 million.

For 2014, Swiss watch exports rose 2% to $23.9 billion, which according to the Federation of the Swiss Watch Industry was the same growth rate recorded in 2013.

RETAIL & WHOLESALE 	  

LVMHs Jewelry Sales Improve

LVMH reported that revenue rose 10.1% year on year to $10.6 billion (EUR 9.241 billion) in the fourth quarter that ended on December 31 and full year sales rose 6% to $35 billion. Profit for the year from recurring operations fell 5% to $6.5 billion, with the watch and jewelry segment dropping the most -- by 23% -- to $323 million. Operating profit rose 2% to $3.6 billion for fashion and leather goods, but it fell 16% for wines and spirits to $1.3 billion and it was down 3% to $1 billion for selective retailing. Still, the groups share of net profit jumped 64% to $6.5 billion in 2014.

The watch and jewelry division experienced a strong fourth quarter sales cycle, given that revenue rose 5.6% year on year to $925 million. Sales for the full year increased 3.2% to $3.2 billion. The luxury goods retailer observed organic revenue growth of 4% for watches and jewelry, with strong performance from jewelry against "cautious purchasing" behavior for watches. Bulgari recorded strong growth due to its iconic lines and watch collections, led by its new Lvcea watch for women. Jewelry maisons continued to "selectively invest" in their distribution network and production capacity, according to the firm.

Swatch Expects Profit Declines

The Swatch Group expects sales increased 4.6% year on year to $10.3 billion (EUR 9 billion) in 2014, according to preliminary figures. The watch and jewelry segment recorded an increase of 5.6% gross and 3.9% net, which factored allowances, discounts and returns. Operating profit plunged 24.3% to $1.9 billion (CHF 1.752 billion), reflecting a margin of 20.1%, down from 27.4%. Profit fell 26.6% to $1.5 billion with a return on sales of 16.3%, down from 22.8%. Official results are scheduled for release on March 12.

Looking ahead, Swatch expects to generate high single-digit growth rates in local currency this year despite the overvalued Swiss franc and, at the same time, earn continued healthy profit, according to its statement. The Swatch Group will continue to maintain its long-term strategy of investments in innovation, machinery, distribution, as well as in employees, and will also further expand its manufacturing base Switzerland.

Swatch also told the press that it will launch a smartwatch by mid-year to compete with the Apple Watch. The Swatch smartwatch features will include communication, mobile payments (at Migros and Coop), and applications that work with Windows and Android without having to be recharged.

Sothebys Jewelry Sales Top $602M

Sotheby’s worldwide jewelry auctions totaled $602.5 million in 2014, representing a new record for the auction house and well above sales of about $572 million in 2013. During the year, Sothebys sold more than 3,900 jewelry lots, 77 jewels topped $1 million and 69% of all lots that were sold exceeded their high presale estimates. The overall sell-through rate in 2014 was 81%. Collectors eagerly vied for jewels from prominent private collections, including pieces owned by Mrs. Paul Mellon, Dimitri Mavrommatis, Barbara Hutton, Estée Lauder and Evelyn H. Lauder, Joséphine De Beauharnais, Helen Hay Whitney, Flora Sassoon, Grand Duchess Vladimir of Russia and others.

For example, the Mellon jewelry sale achieved $45 million, far exceeding the high presale estimate of $20.7 million. Sothebys stated that the sale included The Zoe Diamond, which sold for $32.6 million or $3,348,205 per carat, a record per-carat price for any diamond. Sothebys also sold The Graff Vivid Yellow diamond for $16.3 million, which was a record price for any Graff jewel, as well as the highest price for any yellow diamond to date.

Christies Jewelry Sales Top $740M

Christies luxury goods auction sales rose 7% year on year to $754.7 million in 2014, a new record for the auction house, with jewelry sales topping $740 million. Art sales jumped 12% to $8.4 billion (GPB 5.1 billion), the highest total for any art company, with an increase in activity across all geographies and strong sales of works of the highest quality, particularly in the Post-War and contemporary art, Impressionist and modern art categories. Auction sales rose 10% to $6.8 billion, while private sales jumped 20% to $1.5 billion and ecommerce sales improved 54% to $35.1 million. Rahul Kadakia, the international head of Christie’s jewelry, explained that Christies Americas jewelry sales totaled $188 million in 2014 and the jewelry department celebrated its 21st year as the auction market leader.

Cash Americas Profit +3%

Cash America International Inc. reported that total revenue increased 7% year on year to $289.4 million in the fourth quarter that ended on December 31; however, net revenue decreased slightly to $151.7 million from $152.4 million due to lower net fees from unsecured consumer loans. Profit rose 2.5% to $7.5 million during the fourth quarter, when Cash America implemented administrative reorganization plans that generated $879,000 in after-tax expenses for its lending operations. Excluding the expense, adjusted net income from continuing operations would have been $8.4 million, the company reported.

Daniel R. Feehan, the president and CEO of Cash America, explained that Christmas season sales jumped 16% and that helped drive up same-store net revenue from pawn-related activities 3.7% in the fourth quarter. For the year, Cash America reported that revenue jumped 6% year on year to $1.1 billion and it reported a loss of $10.4 million, compared with income of $59.2 million one year earlier. Excluding costs related to the early extinguishment of debt that totaled $25.8 million, adjusted net income would have been $15.4 million.

ALROSAs Contract Clients 2015-2017

Gomel PO Kristall DDK
Kristall-99 Lazyrit-D
Sakha Diamond S.D. Diamond
Ruis Diamonds Tunalgy
ESPEKA Aspeco
Hari Krishna Shree Ramkrishna
EPL Diamond A.C. Diam
Arslanian Freres Asian Star
Brilliant Gems Brilliant Trading Co.
Bronner Trading Co. Chow Tai Fook
Dali Diamond Diajewel
Diarough Diamond India
Dimexon I.D.R.P.
KARP Impex Kiran Gems
Comdragmetall KGK Diamonds
KP Sanghvi L.L.D.
L&N Diamonds Laurelton
Penford Pluczenik
Jasani Rosy Blue
S.V. Gems Sahar-Atid
Sheetal Mfg. Star Diamond
Taché Trau Bros
Venus Jewel Wing Hang

Retailers Seek to End Patent Extortion

The National Retail Federation (NRF) welcomed new U.S. patent reform legislation that is intended to disrupt the operations of patent trolls, who make a business of threatening retailers with dubious patent infringement claims. David French of the NRF reminded the industry that “retailers are among patent trolls’ most frequent targets thanks to the industry’s use of cutting-edge innovation and technology.”

Patent trolls are extortionists and they have filed numerous suits against U.S. jewelers, so it is time for the law and court system to step up to end attacks on retailers, French said. “NRF looks forward to working with Congress to pass bipartisan patent reform legislation this session that protects both the innovative work of inventors as well as businesses targeted by parasitic patent trolls.” The U.S. House passed patent troll legislation in 2013 (by a strong bipartisan vote of 325 to 91), however the Senate failed to take up the matter. The NRF and software firm Oracle announced the formation of United for Patent Reform, a new coalition dedicated to curb the abuse and misuse of the U.S. patent system.

Royal Asscher Partners With Uchihara Group

The Royal Asscher Diamond Company Ltd. and The Uchihara Group signed an exclusive distribution agreement, whereas the partnership will enable Royal Asschers expansion activities in Japan. The newly formed company, Royal Asscher of Japan, is the exclusive distributor for Royal Asscher diamonds and jewelry in Japan. Royal Asscher has been present in Japan for more than 50 years, successfully establishing a select distribution network of high-end retailers and department stores and by operating two brand stores that offer Royal Asscher diamonds and diamond jewelry lines. The new partnership with The Uchihara Group will further Royal Asschers strategy to grow the brand’s presence globally, with the primary focus on the Asian Pacific region, Europe and the U.S.

Henneberry Joins Hearts On Fire

Pat Henneberry, the founder of The Jewelry Coach, joined diamond brand Hearts On Fire as its vice president of global learning and development. Henneberry will oversee the strategic direction, operation and expansion of all retail sales coaching, training and development for the brand. Gilly Strauss, the executive vice president of sales for Hearts On Fire, explained that Henneberry shares the brands values, understands the importance of technology in training and places a strong emphasis on the customer experience. Prior to The Jewelry Coach, Henneberry served as a global trainer for Hearts On Fire, was a director at The Diamond Promotion Service (for De Beers) and held sales positions at ArtCarved and JCK.

Pure Gold to Expand in India

Pure Gold Group will invest $150 million over the next three years to expand across India. The funds will be used to grow the company’s retail, diamond and gold jewelry manufacturing and hospitality operations. Firoz Merchant, the chairman and founder of Pure Gold, explained that the time was right to invest in India as its economic outlook remains very strong. Pure Gold currently has 25 jewelry retail outlets as well as a diamond manufacturing unit in the country. Merchant said the company intends to use part of the funding to increase its capacity at the factory. Entering India’s hospitality sector will also be a new line of business for the company. Merchant added that the company will start a second phase of its strategy in India once the current investment is completed in 2017.

Group Buys Scott Kay

High Line Precious Acquisition LLC, an affiliate of Frederick Goldman Inc., purchased the assets of Scott Kay, a branded jewelry firm with a global distribution network. Jonathan Goldman, Frederick Goldmans chairman and CEO, said that Scott Kay holds an important position in the marketplace that will continue to drive future growth within the fine jewelry industry by leveraging reputation, unique design aesthetic and a library of Scott Kay designs.

Scott Kay’s design, sales and marketing will continue to operate as a separate entity. Adam Gurian, in addition to his role as executive vice president of global sales and merchandising for Frederick Goldman, will assume the role of general manager for the Scott Kay brand.

MINING 	  

Andreev Dies at 48

ALROSA announced that its former president of five years, Fyodor Andreev, passed away and, on behalf of all of its employees, the companys management offered deep condolences to his family. Andreev was born in Voronezh on August 16, 1966. He graduated from Leningrad State University in 1989 with a diploma in Political Economy. In 2002, he worked as first vice president of ALROSA in charge of finance and economics. From 2003 to 2009, he held key positions with RZhD (Russian Railways), and returned to ALROSA in 2009 to take up the role of company president. In September, Andreev resigned from his senior post citing medical reasons.

Mountain Province Arranges Loan

Mountain Province Diamonds Inc. received approval for its previously announced $370 million loan facility. Since the original announcement of the loan, the lead arranger, Deutsche Bank, was replaced by the Bank of Nova Scotia (Scotiabank). Mountain Province noted that Scotiabanks replacement of Deutsche Bank on the loan was not related to the specifics of the loan facility or the Gahcho Kué mine project, which is located in Canadas Northwest Territories. Mountain Province holds a 49% participating stake in the Gahcho Kué diamond mine, with De Beers holding a 51% share. Each party is responsible for their share of the mines development and operating costs. Mountain Province expects to fund a large share of its development costs through the loan facility.

DiamondCorp Sales Top $1M

DiamondCorp reported that it sold 21,700 carats of diamonds for $1.36 million in 2014. The average price of $63 per carat was slightly ahead of the companys forecast. The company noted that short-term demand for rough diamonds continues to be soft due to slower polished sales and tightening liquidity as a number of banks that finance the cutting and polishing sector have reduced their exposure to the sector. DiamondCorp owns 74% of the Lace mine in South Africa. Commercial production from underground mining at Lace has been delayed due to six week industrial action by members of the Association of Mineworkers and Construction Union (AMCU) in October and November. Production is due to begin in the second half of 2015, rather than its previously scheduled launch in the first half.

Henning Joins True North

True North Gems Inc. appointed Hayley Henning to the role of vice president of marketing and development. Henning most recently served as the executive director of the Tanzanite Foundation, the marketing division of TanzaniteOne Mining Ltd. Henning explained that the colored gemstone industry is experiencing exciting times as True North Gems moves toward sustainable multi-year production of ruby and pink sapphires.

Nicholas Houghton, the president and CEO of True North Gems, added that Henning brings the experience and skill sets that will add depth and capacity to True Norths evolution from explorer to gem producer.

STATS 	 Belgium 

Dec. $Mil. %Chng. 2014 %Chng.
Polished exports $1,086 3% $14,417 4%
Polished imports $923 6% $13,817 4%
Net exports $163 -14% $600 2%

Rough imports $1,032 -5% $14,911 13%
Rough exports $1,217 -9% $15,656 7%
Net imports ($184) ($745) -47%

Net diamond account $348 -21% $1,345 -3

U.S.A.

Dec. $Mil. %Chng. 2014 %Chng.
Polished imports $1,866 11% $24,052 5%
Polished exports $1,386 9% $20,930 10%
Net imports $480 17% $3,123 -17%
Rough imports $23 -72% $548 -1%
Rough exports $21 -53% $366 17%
Net imports $2 -94% $180 -24%

Net diamond account $482 8% $3,303 -17%

ECONWATCH 	  

Diamond Industry Stock Report

Tough week for U.S. jewelers as shares were lower for all, led by Birks (-7%), but Far East shares were higher, led by Chow Sang Sang (+5%). European shares were all up with Damiani (+9%) heading the pack, but Indian firms were mixed as Goenka (-13%) led declines and Ren. Jewellery (+19%) headed gains. Michael Hill (-3%) fell for the first time in months. Declines outnumber gains for mining firms, but ALROSA (+2%) reached new highs and Stellar (-20%) led declines. View the detailed industry stock report.
Feb. 5 Jan. 29 Chng.
$1 = Euro 0.870 0.882 -0.012
$1 = Rupee 61.73 61.78 -0.1
$1 = Israel Shekel 3.86 3.93 -0.07
$1 = Rand 11.27 11.56 -0.29
$1 = Canadian Dollar 1.24 1.26 -0.02

Precious Metals
Gold $1,265.50 $1,258.00 $7.50
Platinum $1,252.00 $1,219.00 $33.00

Stock Indexes Chng.
BSE 28,850.97 29,681.77 -830.80 -2.8%
Dow Jones 17,884.88 17,416.85 468.03 2.7%
FTSE 6,865.93 6,810.60 55.33 0.8%
Hang Seng 24,765.49 24,595.85 169.64 0.7%
S&P 500 2,062.52 2,021.26 41.26 2.0%
Yahoo! Jewelry 1,299.51 1,306.72 -7.21 -0.6%

Rapaport Weekly Market Comment Feb. 13, 2015

Diamond markets cautious as trading stalls. Significant reduction in transaction volume due to very low levels of consumer demand. Dealers can’t buy if they can’t sell. Oversupply of diamonds throughout the distribution chain as India cuts production by about 30%. Low expectations for next week’s Chinese New Year. Israel’s diamond week boosts morale. Leaked HSBC documents expose tax evasion, money laundering in the diamond trade. Rio Tinto’s 2014 diamond revenue +6% to $901M, net earnings +96% to $104M. Blue Nile’s 4Q revenue +8% to $158M, profit -2% to $5M. Asian Star 3Q revenue -8% to $79M, profit +26% to $2M. Rapaport Group wishes all our friends a happy Chinese New Year.

RapNet Data: Feb. 12

Diamonds 1,410,512
Value $7,737,256,166
Carats 1,358,138
Average Discount -28.48%

www.rapnet.com

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RAPAPORT ANNOUNCEMENTS

February 10-18 Tue-Wed

Rapaport Melee Auction

New York & Dubai
Tel. 1.212.354.9100
View Details.

February 20-23 Fri-Mon

IIJS Signature 

Mumbai, India

Show website
Feb-Mar 24-5 Tue-Thu

Rapaport  Melee Auction 

New York & Hong Kong
Tel. 1.212.354.9100
www.rapaportauctions.com
March 19-23 Thu-Mon

The Diamond Show

Basel, Switzerland

Learn More & Register:
www.thediamondshow.net
QUOTE OF THE WEEK
Our new store is the first to kowtow to the plus size market. We are offering something that most jewelers don’t have. We have ring sizes from 6 to 12, extended length necklaces and bracelets ranging from small to extra large.

Richard Castagna | Thistle & Bee

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 	  

Gold Jewelry Demand -19% to $88B

The World Gold Council reported that gold jewelry demand by weight rose 1% year on year to 566.9 tonnes, while it slipped 5% in value to $22.2 billion in the fourth quarter of 2014. Gold jewelry demand for the calendar year fell 10% to 2,152.9 tonnes; however, by value demand plummeted 19% to $87.7 billion.

During the fourth quarter, which included Diwali and Christmas, Indias gold jewelry demand surged 19% to 179.1 tonnes, but Greater Chinas demand fell 27% to 150 tonnes. The Middle East regions demand rose 3% to 37.4 tonnes, while U.S. demand jumped 13% to 53.9 tonnes and Europes demand increased 6% to 25.5 tonnes. By value, Indias gold jewelry demand during the fourth quarter rose a healthy 12% to $6.9 billion, but Greater Chinas demand slipped 31% to $5.8 billion. Demand from the Middle East fell 3% to $1.4 billion and yet it rose 6% in the U.S. to $2.1 billion. Europe was flat at $986 million.

In 2014, gold demand for jewelry in India reached a record 662.1 tonnes, up 8% compared with 2013 and in spite of government measures to restrict gold imports. Still, even with a strong wedding season and Diwali, according to the World Gold Council, gold jewelry demand by value fell 4% year on year to $26.9 billion. In Greater China, gold jewelry demand plummeted 33% to 667.3 tonnes and it decreased 39% by value to $27.2 billion. Middle East demand fell 8% to 174.1 tonnes and dropped 18% by value to $7.1 billion, while U.S. demand for gold jewelry rose 9% to 132.4 tonnes, the highest since 2009, but it fell 1% by value to $5.3 billion. Europes demand rose 6% to 46.4 tonnes, but fell 3% by value to $1.8 billion.

Israel Hosts Trading Event

The Israel Diamond Exchange hosted traders from across the globe for a winter trading event and, overall, the atmosphere was upbeat even as weak sentiment sweeps the marketplace. The amount of business conducted was highly dependent upon buyer needs -- but many of them sought aggressive discounts and dealers were less than eager to close on those offers. Fancy-shape buyers have grown more selective and it is difficult for sellers to offload imperfect goods. Israeli dealers focused on commercial-quality pointer-size to 2-carat, G-J, SI-I2 as inventory is healthy for these goods, while very few carried high-end VS+ goods since demand is weak.

U.S. Jewelry Store Sales -4%

U.S. specialty jewelry store sales fell 4% year on year to $6.11 billion in December, closing the year on a downer. Decembers sales total was the weakest since 2011 and followed a 6.2% decline for stores in November; still, jewelry store sales managed to increase 1.1% to $33.61 billion in 2014.

Jewelry sales from all channels began to soften in September, but noticeable declines were observed for the Christmas season. Jewelry sales in December dropped 1.5% to $13.419 billion, according to preliminary Rapaport News calculations. Watch sales contracted 2.5% in December to $1.83 billion. For the year, jewelry sales were basically flat, or down 0.1% year on year, at $69.188 billion, according to preliminary data, while watch sales increased 1.4% to $9.461 billion in 2014.

Meanwhile, advanced sales estimates from department stores offered some hope to jewelers for the new year. Department store sales rose 0.2% year on year to $10.64 billion in January, showing that U.S. consumers were willing to spend. Advanced sales estimates for all retail and food service sales, excluding automobiles, rose 1.4% to $320 billion. Nonstore retail sales improved 8.3% in January, while retail trade sales rose 2.4%, according to government data.

RETAIL & WHOLESALE 	  

Blue Niles Profit -2%

Blue Nile Inc.s revenue rose 7.9% to $157.5 million in the fiscal fourth quarter that ended on January 4 and included one additional week. Sales for the extra week accounted for $5.9 million and contributed 4.1 percentage points to the quarters comparable growth. Cost of sales jumped 8.6% to $129 million. Blue Niles profit fell 2% to $4.8 million or 41 cents per share.

Blue Niles fiscal year, which included 53 weeks, recorded a sales increase of 5.2% to $473.5 million, while cost of sales rose 5.6% to $386.9 million. The company stated that the extra week provided a 1.3 percentage point gain to revenue during the year. Profit in 2014, however, fell 10.5% to $9.7 million or 80 cents per share. By segment, U.S. engagement-related sales rose 4.1% for the fiscal year to $266.4 million. Non-engagement jewelry sales increased 4.2% to $126 million. International sales of diamonds and jewelry rose 10.8% to $81.1 million.

Asian Stars Profit +26%

Asian Star reported that revenue (net of excise duty) fell 7.5% year on year to $79.4 million (INR 4.944 billion) in the third fiscal-quarter that ended on December 31. Company expenses were reduced 7.2% to $77 million. Profit soared 26.4% to $1.9 million. During the quarter, diamond revenue fell 3.5% to $70.4 million, while jewelry sales dropped 8% to $14.9 million. Revenue from other products decreased 20% to $85,670 and intersegment revenue, which is deducted from total sales, jumped 71.1% to $5.9 million.

Journalists Review HSBC Client List

Secret documents from HSBC Swiss private bank revealed the accounts of 100,000 private clients and entities -- diamond traders, celebrities, politicians, arms dealers, offshore shell companies and more -- that willingly hid cash and earnings from tax authorities and laundered money, according to analysis by the International Consortium of Investigative Journalists (ICIJ) via the French newspaper Le Monde. ICIJ noted that 2,000 clients were in the diamond trade, but the names have been slow in coming out even though some 140 journalists have access to the data.

The information was first leaked by an HSBC insider seven years ago and many of those clients have allegedly worked with their local authorities to clear themselves. HSBC has been under fire for a range of illegal behavior and originally insisted that ICIJ destroy the database, but it stated this week that significant steps had been taken since 2007 to reform and "exit clients who did not meet strict new HSBC standards, including those where it had concerns in relation to tax compliance." The bank also added that its Swiss private bank has reduced the client base 70% since the issue arose.

ICIJ quoted Michael Gibb of Global Witness saying, “Diamonds have a long history of being linked to conflict and violence. The ease with which diamonds can be converted into tools of war, when not sourced responsibly, is astonishing.” ICIJ enlisted journalists from 45 countries to review names and create the report, with among nearly 50 media partners in all, including the BBC, The Guardian, 60 Minutes and Süddeutsche Zeitung.

GJSCI to Certify Diamond Artisans

Nearly 20,000 skilled artisans from Surat are preparing to take written and theoretical exams in pursuit of a new professional certificate that was developed by the Gems & Jewellery Skill Council of India (GJSCI) and the Surat Diamond Association (SDA). Once these professionals are certified, Dinesh Navadia, SDAs president, said that the artisans will be eligible to apply for international working assignments. The certification provides official proof of skill sets and legitimizes experience and expertise. The certification program, which is in its trial phase, requires three years of work experience and it is designed to train the artisans on par with international standards.

Gemfields to Sponsor ICA Congress

Gemfields will sponsor the International Colored Gemstone Association’s (ICA) congress this year, which is scheduled for May 16 to 19 in Sri Lanka. The congress brings together gemstone industry leaders and experts to collaborate and share presentations, enjoy special events and engage in experiences that highlighting colored gemstones. Gemfields CEO, Ian Harebottle, will discuss current trends in the colored gemstone industry during a presentation discussion on May 17. Clement Sabbagh, ICAs director and the chairman of the congress, explained that Gemfields brings a unique perspective, having successfully promoted colored gemstones to consumers.

Thistle & Bee Too Opens in New York

Luxury sterling-silver jewelry brand Thistle & Bee celebrated the opening of its first retail outlet on the Upper Eastside of Manhattan in New York City with an intimate cocktail party. The 600-square-foot store, Thistle & Bee Too, has added a full selection of plus-size pieces to its standard options, some of which include colored gemstone or diamond accents.

In the wholesale business for 20 years, the firm has its jewelry in 1,400 independent jewelry stores across the U.S. Richard Castagna, the managing director and designer for Thistle & Bee, noted that 35% of all U.S. women are 25 pounds or more overweight and that the big lady market is underserved.

Market to Unmarried, Attached Men for Feb. 14

Roughly 51% of U.S. adults expect to purchase a gift for Valentines Day, according to the Georgetown Institute for Consumer Research (GICR), which was similar to findings by the National Retail Federation (NRF). Overall, those who celebrate the occasion plan to spend nearly 7% less this year, with an average of $49.63, GICR stated. However, those who intend to make gift purchases expect to spend $96.49, an increase of 46% compared with 2014.

Men typically spend more than women on this festive day. The GICR study noted that the highest average expected gift spending ($120.08) was from unmarried men who were in committed relationships. Authors concluded this group represented an important consumer set for marketers to tap with their Valentines Day outreach. Twenty-three percent of men who will buy a gift intend to purchase jewelry, but only 4% of women intend to make a jewelry purchase. Top gift choices from men included flowers (55%), a meal (51%), candy (42%) and a card (41%). Women, on the other hand, chose their top gifts to be candy (47%), a card (45%), a meal (37%), something non-material (27%) and something homemade (25%). The gift(s) men expect to receive are cards (40%), something non-material (33%), candy and/or a meal (25%), something homemade (28%), jewelry and/or flowers (5%). Women expect candy (48%), flowers (43%), cards (41%), a meal (37%), something non-material (28%), jewelry (12%) and something homemade (8%).

In a separate data set, collected by Statistic Brain, 17.3% of Valentines celebrants will give jewelry as a gift. The group cited the average amount spent on gifts would be $116.21. The results revealed the highest population percentage (61.8%) of any survey that showed who celebrates Valentines Day.

MINING 	  

Rios Diamond Earnings Rise

Rio Tinto reported that its diamond revenue grew 6% year on year to $901 million in 2014. Earnings from diamonds almost doubled to $104 million. Diamond output by volume fell 13% to 13.872 million carats, largely caused by lower recoveries at the Argyle mine as it transitioned from open-pit to underground mining. However, the company said that revenue and profit at its diamond operations were boosted by a 6% increase in average rough diamond prices in 2014.

Rio Tinto said that the Argyle underground mine remained on track to reach full capacity in 2015. The company anticipates that group production will jump to 21 million carats in 2015. The entire mining group reported consolidated sales revenue of $47.4 billion, down $2.4 billion from 2013. Profit rose 78% to $6.50 billion. Consequently, the mining conglomerate decided to raise its full-year dividend by 12% to $2.15 per share, and set aside $2 billion for share buyback.

ALROSA Eases Purchase Terms

ALROSAs clients contend that demand for rough diamonds had eased, according to those who spoke with Interfax, and yet the mining giant has not altered prices. Nonetheless, ALROSA eased terms for long-term clients in January. Interfax reported that clients can refuse some allotted volume, but they must stay within a limit, otherwise they risk losing their contract. The take-up was 90% before the January tender, leaving 10% that clients could refuse, but ALROSA lowered the threshold to 70%, allowing clients to refuse up to 30% of goods offered.

Kennady to Raise $16M

Kennady Diamonds Inc. is undertaking a non-brokered private placement to raise approximately $16 million (CAD 20 million) through a combination of common shares and flow-through common shares. The common shares to be issued have been priced at $3.55 and the flow-through common shares have been priced at $5 per share. The placement is expected to close on or about February 17, 2015 and is subject to regulatory approval. Bottin (International) Investment Ltd., Kennadys largest shareholder, expects to subscribe, according to the announcement.

Proceeds from the placement will be used to fund Kennadys winter exploration program and for general corporate purposes. The exploration program includes a 500 tonne to 700 tonne bulk sample from the Kelvin kimberlite, delineation drilling at the Kelvin and Faraday kimberlites, exploration drilling at the MZ and Doyle kimberlites as well as testing of a number of new exploration targets at the Kennady North project.

North Arrow Starts Pikoo Drilling

North Arrow Minerals Inc.s exploration drilling is under way at the Pikoo diamond project, a joint-venture with Stornoway Diamond Corp. in central-eastern Saskatchewan, where approximately 3,000 meters of drilling is planned. This round of drilling is in follow up to diamond-bearing kimberlites that were discovered in 2013 and to test new targets defined by a 2014 till sampling program. The program is expected to run through to the end of March. Diamonds were first discovered at the Pikoo project in 2013 when kimberlite was identified in nine of 10 drill holes and sample results confirmed significant diamondiferous kimberlites, according to North Arrow

ECONWATCH 	  

Diamond Industry Stock Report

Most U.S. retailers were higher, led by Birks (+15%) but Blue Nile (-9%) disappointed investors again and fell the most. Far East shares all lower, led by Chow Sang Sang (-5%). European shares up with LVMH (+4%) leading the way. Indian shares all lower except Gitanjali (+1%), Goenka (+1%) and Titan (+2%). Mining shares mixed but Stornoway (+16%) and Stellar (+14%) jumped and Kennady (-7%) led declines. View the detailed industry stock report.
Feb. 13 Feb. 5 Chng.
$1 = Euro 0.877 0.870 0.007
$1 = Rupee 62.09 61.73 0.4
$1 = Israel Shekel 3.87 3.86 0.01
$1 = Rand 11.74 11.27 0.47
$1 = Canadian Dollar 1.25 1.24 0.01

Precious Metals
Gold $1,221.90 $1,265.50 -$43.60
Platinum $1,198.00 $1,252.00 -$54.00

Stock Indexes Chng.
BSE 28,805.10 28,850.97 -45.87 -0.2%
Dow Jones 17,972.38 17,884.88 87.50 0.5%
FTSE 6,828.11 6,865.93 -37.82 -0.6%
Hang Seng 24,422.15 24,765.49 -343.34 -1.4%
S&P 500 2,088.47 2,062.52 25.95 1.3%
Yahoo! Jewelry 1,325.93 1,299.51 26.42 2.0%

Rapaport Weekly Market Comment Feb. 20, 2015

Chinese New Year looking sheepish as luxury demand slows. Polished buyers are price sensitive and waiting for Hong Kong show. Liquidity remains very tight. GIA backlog eases as diamond cutters reduce rough purchases and production. Sightholders anticipate flat De Beers prices at next week’s small sight. De Beers 2014 revenue +11% to $7.1B, rough sales +12% to $6.5B, earnings +74% to $923M, rough prices +5%. Petra Diamonds 1H revenue +16% to $215M, profit +38% to $39M. Gitanjali 3Q revenue +25% to $554M, profit +90% to $15M. India’s Jan. polished exports +5% to $1.8B, rough imports -32% to $851M. Leo Schachter tops Israel’s 2014 diamond exporter list with exports -12% to $288M.

RapNet Data: Feb. 19

Diamonds 1,506,154
Value $7,989,695,635
Carats 1,424,631
Average Discount -28.4%

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QUOTE OF THE WEEK
For this type of performance, we needed the market and the diamond market was pretty good in 2014. We saw that the second part of the year was weaker and the selling season around Christmas was slightly lower than expected, but the U.S. performed very strongly overall. China was a bit on the low side, while India has started to pick up again after a challenging two years.

Philippe Mellier | De Beers

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INDUSTRY

De Beers Profit Soars

De Beers underlying earnings jumped 74% year on year to $923 million in 2014. Anglo Americans share of De Beers revenue rose 11% to $7.11 billion, while rough diamond sales increased 12% to $6.5 billion. The remaining $614 million was generated mainly by the company’s Element Six industrial diamond business, as well as some consulting revenue and the De Beers Forevermark brand. De Beers growth was driven by a higher volume of sales and better prices.

The company’s average rough price index increased 5%, although realized prices remained flat at $198 per carat due to a marginally lower product mix. The volume of sales increased 15% to 34.4 million carats, while Anglo American’s share of sales grew 12% to 32.73 million carats. De Beers production rose 5% to 32.6 million carats.

The diamond market was robust during the first nine months but then demand weakened due to a lack of liquidity in the pipeline and similar conditions prevail to this day. Forevermark increased its retail presence by 20% to more than 1,500 retail outlets, while its laboratories graded 50% more diamonds than the previous year. De Beers is currently negotiating new three-year contracts with its sightholder clients that will begin in March 2015. The company has stressed that sightholders will have to comply with more rigorous financial and governance criteria to be eligible for supply.

RETAIL & WHOLESALE 	  

Tough Jewelry Market for Kering

Kering reported that revenue rose 4% year on year to $11.4 billion (EUR 10.038 billion) in 2014. Cost of sales increased 3.5% to $4.3 billion, so gross margin improved 4.2% to $7.2 billion. The groups share of profit greatly improved to $603 million compared with $57 million in 2013. The groups luxury brands performed very well in 2014, except for Gucci, which experienced a sales declined of 1.8% year on year to $4 billion. Bottega Venetas revenue jumped 11.3% to $1.3 billion, while Yves Saint Laurents sales surged 27% to $805 million.

Other luxury brands, including Boucheron, Girard-Perregaux, Pomellato and Dodo, Qeelin and more, recorded a collective sales increase of 14.4% to $1.6 billion. Sales were driven by couture and leather goods brands, which posted an overall comparable-store increase of 9%. Conversely, "tougher market conditions" greatly impacted revenue from the timepiece and, to a lesser extent, jewelry brands.

Gitanjalis Profit +90%

Gitanjali Gem Ltd. group revenue jumped 25% year on year to $554.3 million (INR 34.5 billion) in the third quarter that ended on December 31. The companys expenses rose 30% to $520.4 million. Profit surged 90% to $15.4 million. Group diamond revenue contracted 26% to $164 million; however, jewelry segment sales jumped 58% to $406.4 million. Revenue from other product sales fell 74% to $579,000. Intersegment revenue, which was deducted from the total, decreased 58% to $16.7 million (INR 1 billion). Sales from Gitanjalis operations in India surged 143% to $265.6 million, while operations from outside of the country experienced a sales decline of 14% to $288.7 million.

Rajesh Exports Profit +87%

Rajesh Exports Ltd. reported that group revenue jumped 148% year on year to $2 billion (INR 124.3 billion) in the third quarter that ended on December 31. Expenses surged 151% to $1.96 billion. Profit rose 87% to $27.5 million. Included in the groups totals, standalone revenue rose 92% to $1.55 billion, however, profit fell 15% to $12.6 million.

Company revenue rose 7% year on year to $5 billion for the first nine months of its fiscal year. Profit jumped 25% to $72 million.

Pandoras Profit +36%

Pandora reported that revenue rose 40.4% year on year to $607 million (DKK 3.961 billion) in the fourth quarter that ended on December 31. Gross margin as a percentage of sales improved to 71.6% compared with 68% one year earlier. Total costs increased 33.6% to $396 million. Profit jumped 36.3% to $154 million.

The volume of sales increased 22.1% and the average price per item rose 15% to $22.23, driven by a greater share of rings sold, which jumped 112.6% to $54 million. Sales of Pandoras charms jumped 35.1% to $407 million, while bracelets improved 18% to $71 million. Other jewelry items experienced a sales increase of 64.4% to $74 million.

By region and in local currencies, sales across the Americas jumped 35.2%, with an increase of 20% for the U.S. and 90.7% elsewhere. Revenue across Europe rose 30.8%, with U.K sales up 28.2%, Germany up 3% and other countries improving by 40.3%. In the Asia-Pacific region, revenue increased 52%, driven by a 30.4% increase in Australia and an increase of 94.5% elsewhere.

SRKs Exports Surge

Shree Ramkrishna Exports (SRK) reported that it exported more than 348,000 carats of diamonds in 2014. The company stated that it did business worth $1.2 billion (INR 75 billion) in each of the past three years prompting the Indian government to award it with the status of being a “premier trading house.” The award is the highest recognition awarded to any export business, SRK stated.

Rahul Dholakia, SRK’s managing director, said the certification will result in an easier management of the company’s import and export transactions and enable a more convenience clearance of goods at customs.

Sothebys Offers 100ct. Emerald-Cut

Sothebys will offer a 100.20-carat, D color, internally flawless emerald-cut diamond at its April 21 auction in New York City. The diamond is the largest D,IF emerald-cut stone ever presented at auction. Estimated at $19 million to $25 million, the gem was unveiled at a photo call in London and is dubbed by Sothebys as the "Ultimate Emerald Cut Diamond." The rough from which it was cut weighed over 200 carats and was mined in southern Africa by De Beers. The owner spent over a year cutting and polishing the diamond to perfection.

Gary Schuler, the head of Sothebys jewelry department in New York, compared the diamond to a "pool of icy water" for its purity of color and transparent clarity. The Ultimate Emerald-Cut Diamond will be on exhibit in Dubai from March 16 to 18; Los Angeles on March 29; Hong Kong from April 2 to 5; London from April 8 to 12; Doha from April 14 to 15 and it will be on view in New York from April 17 to 21.

Humperdinck Collection Sells Out

Legendary music artist Engelbert Humperdinck collaborated with Zalemark Holding Company on a Valentine’s Day jewelry collection to coincide with his latest album. The collection included three main pieces -- a pendant, lapel pin and necklaces -- all of which were sold out in three days. Zalemark is now working to process backorders. Plans are underway to create more jewelry such as cufflinks, rings and earrings.

Carmen Marc Valvo by Gabriel & Co. at Fashion Week

Jewelry from Carmen Marc Valvo by Gabriel & Co. prowled the catwalk at the designers show during New York Fashion Week. The Victoriana-meets-1950s-schoolgirl inspired clothes were embellished with sterling-silver and blackened rhodium necklaces, cufflinks, bangles and earrings -- some sparkling with white diamonds, others with Gabriel & Co.s opaque "Shadow Play" diamonds that gave the jewelry a vintage feel. White sapphires and white agate also contrasted with the darkened metal and popped against plaids made modern through the texture of beading that created a luxurious pattern on tops that paired with either pleated mid-calf length, or more voluminous to the floor skirts, as well as cropped pants. Black, white, gray and reds were the standout colors of the show, which drew some star power attendees including television personality/anchorperson Katie Couric and actress/singer Vanessa Williams.

Movado Faces Class Action Suit

A class action lawsuit was filed against Movado Group, alleging securities violations against the company and certain executives. The suit stated that between between March 26 and November 13, 2014, Movado issued materially false and misleading statements extolling positive business prospects and powerful growth projections. The suit alleged that Movado misled investors about its plan to boost the brands image and increase sales, in that such materially false and misleading statements and omissions drove shares higher at artificially inflated prices. During the period in question, shares in Movado hit $46.39 per share. Movado closed 3% higher at $24.86 on February 19; however, shares are down 36% from one year ago.

Smithee to Keynote at MJSA Expo

Ben Smithee, a consumer trends expert who was nominated as one of the "Top 10 Youth Marketing Professionals in the U.S.," will deliver the keynote presentation on wearable technology and other disruptive products at MJSA Expo New York, which is scheduled for March 8 to 10 at the Hilton in New York City. Smithees session, "The Cyborg Consumer: From Wearable Tech to 3-D Printing," will anchor a seminar program that also includes Blaine Lewis of the New Approach School in Franklin, Tennessee; David Geller of JewelerProfit in Atlanta; Antoinette Matlins, co-author of "Gem Identification Made Easy: A Hands-on Guide to More Confident Buying and Selling" and Chris Ciunci of TribalVision in Providence, Rhode Island. The program was developed and sponsored by the MJSA Education Foundation.

AWDC Conducts Seminar for Banks

The Antwerp World Diamond Centre (AWDC) held another seminar on diamond financing to explain the nuances of the industry to banking institutions in collaboration with Febelfin, the Belgian Financial Sector Federation. AWDC confirmed that 15 banks attended, including some from India that specialize in diamonds. AWDC has conducted similar seminars in Singapore and in the framework of the World Economic Forum in Davos.

London Hosts Open Day

The London Diamond Bourse (LDB) will host its first Open Day on February 23. The event is planned to provide an opportunity for visitors to discover new suppliers, network with each other or to see what the bourse has to offer. The bourse stated that visitors will be able to view diamonds from melee to sizes, colored gemstones, fancy natural colored diamonds, watches, bespoke pieces, fine jewelry, ethical stones, and restoration of antique jewelry, courier services and trade insurers all under one roof. Stock and services are available in the U.K. from members who subscribe to a code of conduct and are all regarded of high standing.

Jewelers for Vets Launch Nov. Campaign

Beginning this year, November will become Jewelers for Veterans month as determined by the Jewelers For Veterans Foundation. The group was founded in 2012 to help military veterans learn about the jewelry and industry and train for jobs. Retailers and manufacturers in the U.S. will be asked to commit to the Jewelers for Veterans month promotional effort by supporting the campaign and displaying a framed placard, a point-of-sale display and a donation can in their offices and stores. The Jewelers for Veterans Foundation has set a goal of raising $150,000 from the 2015 Jewelers for Veterans month campaign.

Rabasco Joins Frederick Goldman

Frederick Goldman Inc. appointed Roxanne Rabasco as the companys director of integrated marketing and communication. Rabasco has extensive experience in luxury and lifestyle digital and traditional marketing and was most recently the senior director of digital and social media marketing for Parlux Fragrances LLC. Rabasco has also worked at Starwood Hotels & Resorts, where she helped launch the Aloft and Element hotel chains. Rabasco will be responsible for planning, developing, managing and implementing new communication strategies, as well as media management and public relations for Frederick Goldman.

Retzer Joins Jayden Star

Patrick Retzer joined Jayden Star as a fashion sales director to help expand branding efforts and market reach across the U.S. jewelry and gift markets. Retzer is responsible for managing key accounts, as well as identifying new opportunities for expansion with the renowned jewelry distributor. Previously, Retzer was a national sales manager with C.G. Creations and has worked with a variety of established retailers in management, including Fred Meyer Jewelers, Shane Co. and Sterling Jewelers.

MINING 	  

Petras Profit +38%

Petra Diamonds revenue rose 16% year on year to $214.8 million in the first half that ended on December 31. Higher rough prices boosted sales, while the volume of diamonds sold dropped 1% to 1.401 million carats. Production decreased 2% to 1.601 million carats. The company said it remains on track to achieve its production goal of 3.3 million carats in fiscal 2015. Petra Diamonds reported that profit rose 38% year on year to $39.1 million. In all, the diamond market remains under pressure, however, there are encouraging signs the prices are stabilizing due to good demand, according to Johan Dippenaar, Petra’s CEO. Petra’s average prices rose 18% year on year to an estimated $153 per carat, boosted by proceeds from two exceptional diamonds that sold during the period.

Gemfields Production Jumps

Gemfields plc reported that emerald and beryl production rose 48.7% year on year to 5.8 million carats in the second fiscal quarter that ended on December 31. Operating costs jumped 61.1% to $11.6 million, largely the result of increased mining activity. The final auction of the quarter, which was held in November, generated $34.9 million from the sale of predominantly higher-quality rough emerald and beryl. In addition, Gemfields ruby production increased 47.8% to 3.4 million carats, while operating costs rose 148% to $5.7 million. In December, Gemfields held an auction of higher-quality rough ruby in Singapore, which generated sales of $43.3 million.

The companys Fabergé unit experienced a sales decline of 12%, while operating costs fell only 5%. Gemfields observed a sharp drop in sales across the Ukraine and Russia but did not provide hard totals.

DiamondCorp Reaches Wage Deal for Lace

DiamondCorp plc, the operator of the Lace diamond mine in South Africa, confirmed that its subsidiary, Lace Diamond Mines (Pty) Ltd., signed a four-year wage agreement with the Association of Mineworkers and Construction Union (AMCU). The deal covers all employees at the Lace diamond mine, which is located in the Free State province of South Africa. The agreement is based on an 8% annual wage increase for basic salary in most categories of workers, along with a progressive increase in the lowest categories to $1,075 (ZAR 12,500) per month over the four year period.

Mountain Province Undertakes Offering

Mountain Province Diamonds Inc. is undertaking a $75 million (CAD 95 million) rights offering to fund a cost overrun facility, the arrangement for which is a condition precedent to drawdown its $370 million term loan facility. The junior miners major shareholder, Dermot Desmond, intends to fully exercise his rights under the offering, according to the filing. In addition, Mountain Province entered into a standby agreement with Desmond in terms of which he has undertaken to fully subscribe for those rights, not otherwise subscribed for under the offering.

Mountain Province expects to offer rights to holders of its common shares at the close of business (5 p.m. EDT) on February 27, 2015, expiring at 5 p.m. EDT on March 30. The offering is subject to regulatory approval, including that of the Toronto Stock Exchange (TSX).

STATS 	  

Israels Top Exporters

Israel listed the following 20 companies as top exporters for 2014. The list includes only those companies that agreed to publication and did not include 20 firms that, collectively, accounted for another $1.4 billion in exports during the year.

Company Name $Mil 2014
Leo Schachter Diamonds $288
M.I.D. House of Diamonds $243
A.A. Rachminov Diamonds $219
Niru Diamonds Israel $156
Andre Messika $125
Ofer Mizrahi Diamonds $105
D.N. Diamonds $102
Yoshfe Diamonds Intl. $96
O.S.G. Polishing $88
Poligem $70
Rosy Blue $64
Moshe Namdar & Co. $61
Royal Gem Israel $56
Rachminov Diamonds Israel $50
Shlomo Bichachi Diamonds $46
Yoram Dvash Diamonds $37
Kuperman Brothers $37
DMG Intl. $30
Novel Collection $29
Hilit Diamonds $28

India

Jan. $Mil. %Chng.
Polished exports $1,793 5%
Polished imports $373 -27%
Net exports $1,420 25%

Rough imports $851 -32%
Rough exports $106 -14%
Net imports $745 -34%

Net diamond account $675 13,000%

ECONWATCH 	  

Diamond Industry Stock Report

U.S. shares mostly lower with Birks (-7%) showing largest drop but Blue Nile (+4%) recovered some loss from the previous week. Far East unchanged except for Luk Fook (+3%). Indian shares mainly higher, led by Gitanjali (+16%). Mining shares mixed with Petra (+17%) powering ahead of the pack and Mountain Province (-12%) leading declines. View the detailed industry stock report.
Feb. 19 Feb. 13 Chng.
$1 = Euro 0.880 0.877 0.003
$1 = Rupee 62.07 62.09 0.0
$1 = Israel Shekel 3.84 3.87 -0.03
$1 = Rand 11.68 11.74 -0.06
$1 = Canadian Dollar 1.25 1.25 0.00

Precious Metals
Gold $1,207.70 $1,221.90 -$14.20
Platinum $1,168.00 $1,198.00 -$30.00

Stock Indexes Chng.
BSE 29,462.27 28,805.10 657.17 2.3%
Dow Jones 17,985.77 17,972.38 13.39 0.1%
FTSE 6,888.90 6,828.11 60.79 0.9%
Hang Seng 24,832.08 24,422.15 409.93 1.7%
S&P 500 2,097.45 2,088.47 8.98 0.4%
Yahoo! Jewelry 1,337.37 1,325.93 11.44 0.9%

ten izraelsky shekel sel ale pekne dolu.....🙄

Majú viac peňazí a pokiaľ budú chýbať dotlačia.😃

Teď to podpořili zlatem, ne?😉