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Rapaport Weekly Market Comment Feb. 27, 2015

High hopes for Hong Kong show with large quantity of diamonds on offer, despite severe 30-35% cutback in manufacturing and 50% decline in value of new production. Liquidity is tight but prices holding steady as sellers await outcome of HK show and possibility that shortages will stabilize the market. Rough trading improves at Antwerp rough fair as De Beers reduces overall prices by an estimated 2% at Feb. sight. Dominion’s 4Q sales +3% to $241M, Ekati production +70% to 821,000 carats. Lucara’s 4Q revenue +20% to $71M, loss of $17M vs. profit of $21M a year earlier. Sarine’s 4Q revenue +10% to $18M, profit -13% to $3.9M. China’s 2014 polished diamond imports +31% to $2.2B.

RapNet Data: Feb. 26

Diamonds 1,470,250
Value $8,064,959,730
Carats 1,407,640
Average Discount -28.46%

www.rapnet.com

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Meet Martin Rapaport at The Hong Kong Show 

Here is your chance to speak with Martin about diamond markets, prices and the latest Rapaport Services. He will be at the Rapaport Booth AWE 2 – U10, from 2 p.m. to 4 p.m. on Tuesday, Wednesday and Thursday, March 3 to 5.

If you would like to schedule an appointment, please email MeetMartin@Diamonds.Net.

Feb-Mar 24-5 Tue-Thu

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Feb-Mar 24-12 Tue-Thu

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March 2-6 Mon-Fri
Hong Kong Intl. Diamond, Gem & Pearl Show

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March 19-23 Thu-Mon

The Diamond Show Basel, Switzerland

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QUOTE OF THE WEEK
A wide range of rough diamonds was offered during Antwerps Rough Diamond Days trading event, so everyone could find what they were looking for. But above all, the personal contact between traders boosted their level of confidence, which is something that many dealers can use in these difficult times.

Freddy Inzlicht | Antwerpsche Diamantkring

RETAIL & WHOLESALE

Online Jewelry Sales Growth Continues

IBISWorld estimated that revenue from the ecommerce and online auctions in the U.S. increased at an annualized rate of 8.9% over the past five years to $314.9 billion. But the growth by product category is uneven. IBISWorld estimated that jewelry store sales grew only 3.5% during the past five years, but even that increase was higher than all other in-store categories -- such as clothing, groceries, liquor and auto parts, flowers and others. Meanwhile, online jewelry sales have jumped nearly 9% at an annualized rate since 2010.

Looking ahead, IBISworld anticipates that jewelry store sales will increase about 3% at an annualized rate through 2020, while online jewelry sales could jump almost 6%.

The group concluded that disparity in growth rates across products is telling of how new technology has disrupted retail. Online grocery sales have grown at an estimated annualized rate of 16.7% during the past five years; however, total sales pale by comparison to those in a store. In contrast, online camera and camcorder sales have grown at only 0.9% during the past five years, but these products have reached maturity online. Similarly, a greater number of men’s clothing sales are being completed online relative to overall men’s clothing sales, although online sales of men’s clothing are increasing rapidly. Industries that are most likely to continue to be disrupted by online sales are going to be those that maintain high levels of growth.

Generally speaking, ecommerce growth is going to slow moving forward as it reaches full maturity. Still, growth of a number of online channels is expected to continue to exceed store sales across a wide variety of industries including jewelry. This clearly means more disruption to come.

Crossworks, Osigem Partner for Ideal Square

Crossworks Manufacturing Ltd. partnered with Osigem to launch the "Ideal Square," a square-cut diamond that exhibits the hearts and arrows pattern. Specifically for the launch in Milan, Italy, Osigem created the Forever Unique jewelry collection that was designed to enhance the hearts and arrows concept of Crossworks Ideal Square. The collection was designed by Chiara Colombani, a winner in the De Beers Diamonds: Natures Miracle, and will be offered through premier jewelry stores across Italy by Osigem.

In other news, Crossworks named Lisa Levinson as the country manager for Forevermark in the U.K. and Ireland. Crossworks, which is a Forevermark partner, stated that Levinson will oversee the launch of Forevermark in those countries and will focus on developing the sales and marketing with Forevermark retail partners.

Elizabeth Taylor Trust Sues Christies

Co-trustees for The Sothern Trust sued Christies for wrongful action in connection with the sale of Elizabeth Taylors jewelry and personal items. Proceeds from the sale were to benefit the Trust and The Elizabeth Taylor AIDS Foundation. The plaintiffs charged Christies with violating its own policies, canceling sales of auction items, refusing to return unsold merchandise and failing to remit payment to the Trust for items that sold. Christies held the sale in December 2011, and the jewels alone fetched more than $137 million.

Christies sold the "Taj Mahal" heart-shaped diamond and jade pendant by Cartier to an anonymous bidder for $8,818,500 and remitted $7.8 million to the Trust. But months later, the buyer allegedly demanded that Christies cancel that sale and return the purchase price, claiming the diamond was not from the Mughal period. But the plaintiffs argued that Christies never promoted the diamond being from a certain period; however, since the buyer was a VIP client, Christies abandoned its own policy and provided a refund, in turn demanding the Trust return $7.8 million. The Trust refused, citing its consignment agreement with Christies.

In this case, the plaintiffs argued that the buyers contention fell outside of Christies warranty conditions and diverted from usual policy and practice. Furthermore, Christies has withheld payment and the return of certain items in "an attempt to strong-arm" the Trust into returning the diamonds proceeds. While Christies remains in possession of the diamond, it withheld payment from the sale of a Bulgari diamond ring, which fetched $2.9 million. The Trust demanded the return of that ring, but Christies claimed that it was in possession of a new owner.

The Trust alleged, too, that it had not received payment for a Ciner necklace, Girandole ear clips, a Tulle evening gown, a Vicky Tiel caftan and a Valentino handbag. The Elizabeth Taylor AIDS Foundation had not also received payment for autographed books and box sets of books, according to the plaintiffs.

Sarines Profit -13%

Sarine Technologies reported that sales grew 10% year on year to $18.3 million during the fourth quarter that ended on December 31. Sarine delivered seven new Galaxy systems during the quarter. As a result, 190 Galaxy systems were installed and running as of December 31. Profit declined 13% to $3.89 million due to higher operating expenses, a slightly higher income tax rate and higher finance expenses due to the depreciation of the Israeli shekel against the U.S. dollar.

Lab Rebrands as AnchorCert Analytical

Assay Office Birmingham Analytical Laboratory has been rebranded as AnchorCert Analytical to mark expansion into new sectors, alongside its traditional links with the fine- and costume-jewelry business. Anchorcert Analytical continues to analyze all precious metals; however, the scope of services expanded to include nickel testing. New equipment and the addition of qualified specialists have resulted in a service offering in testing compliance with E.U., U.S. and Canada legislation for many consumer product safety regulations. These relate to the content or release levels of toxic elements such as lead, cadmium, Chromium VI and other potential carcinogens including azo dyes, formaldehyde and phthalates, to name a few. AnchorCert Analytical offers UKAS accredited chemical testing to ensure compliance with the REACH Regulation, RoHS, the Toy Safety Regulation and U.S. CPSIA standards among others.

Levinson Ends Life at 60

Jeweler Mark Levinson of Florida took his life this week, according to the Broward County Medical Examiner’s Office. Levinson left a suicide note and died of a single gunshot wound to his head in a vacant yard adjacent to the familys home in Fort Lauderdale. Levinson, along with his wife, Robin, own Levinson Jewelers and have been prominent figures in South Florida across social and charitable networks.

Levinson Jewelers was dragged into the Scott Rothstein Ponzi-scheme criminal investigation, but Levinson cooperated with authorities and was never charged with any misconduct. Rothstein, who is serving 50 years in prison for defrauding investors of $1.2 billion, had purchased $10 million worth of jewelry from the store before his scheme collapsed in 2009. Still, Levinson Jewelers was sued by the bankruptcy trustee for Rothstein’s former law firm for millions of dollars. In 2013, the retailer reached a “compromise” settlement for $650,000.

The family has requested privacy.

Gem-A Presents Hatleberg Salon

Gemstone connoisseurs were delighted by an evening salon hosted by noted gemstone cutter and expert John Hatleberg at his New York City studio where he showed a group of gemstone enthusiasts some of his gem art and explained the properties of unique stones as well as the inspiration behind his work. The evening was presented by the Gemmological Association of Great Britain (Gem-A), as part of a series of events in the U.S.

Best known for cutting replicas of some of the most historic diamonds in the world, Hatleberg gave an in-depth explanation of the process that is used to make these replicas. In addition, he has created many works of art from gems including a painting that recreates Van Gogh’s Irises using crushed gemstones as “paint” and sculptures that showcase gems. Hatleberg also showed some colored gemstones that he has cut as well, while explaining the choices he made as a cutter to bring out the unique properties of each stone and to showcase the art of the lapidary.

Signature Show Attracts 7,000 Buyers

The eighth edition of the Signature show by Indias Gems & Jewellery Export Promotion Council (GJEPC) hosted 1,100 booths and 7,000 buyers this past week as it is clearly becoming the preferred show for retailers on the hunt for new designs and trends. Vipul Shah, the chairman of the GJEPC, noted that each year, designs and the quality of the products are improving, therefore attracting more retailers to the show.

Colin Shah, the managing director of Kama Schachter, confirmed that participating in the Signature show is a staple of the groups trade show calendar. Shah said, “Talking about the business generated, to be honest, we were skeptical but hopeful that the show should reflect positive market sentiment and that is exactly what happened.”

Marcato Capital Rips Into Sothebys

Hedge fund Marcato Capital Management accused Sothebys of ignoring growth opportunities and demanded both an immediate $500 million share repurchase and the replacement of the companys chief financial officer. Mick McGuire, the founder of Marcato, wrote, "Despite our dialogue with you and other members of the board, a substantial portion of Sothebys invested capital continues to earn a poor return or, worse yet, earns no return at all. This willful neglect on the part of both management and the finance committee of the board must end urgently."

In response, Sothebys reiterated its determination to defer capital allocation decisions until a new CEO has been selected. Sothebys lead independent director, Domenico De Sole, said "but our immediate priority is selecting a new CEO and determining a strategy to increase shareholder value. We will address capital allocation based on our strategy and the resulting capital needs. Further, good governance requires that the new CEO be involved in something as important as our capital allocation policy."

Take Proactive Measures to Surprise Customers

Does your jewelry store respond to customer problems as they arise? While that approach might be satisfactory -- it is simply not enough as well as being unsurprising and uninspiring, according to John Tschohl, the president of the Service Quality Institute. Jewelers must work toward delighting customers rather than running around putting out fires. Using strategic examples from Amazon.com, Tschohl cited how the online retailer is "internally driven" to improve services through added benefits and features, adjust prices to compete and invest capital to thwart reacting to competitive forces.

For example, when an item is pre-ordered on Amazon, the company guarantees the lowest price between the order time and the end of the day of the product release. While this proactive approach is more expensive to Amazon, it surprises, delights and earns trust with the customer. Tschohl said that proactive retailers have a significant competitive advantage. They are flexible, adaptable and focused on continually improving their customer service, productivity, efficiency and workplace environment.

Proactive organizations are a step ahead of the game and change long before risks materialize. He urged retailers to ask customers for feedback to determine their needs and to identify store weakness in order to make corrections. Announce mistakes before customers do it for you, which gives the brand an opportunity to prove its trustworthiness. Reward returning customers with discounts and offers to build goodwill and loyalty, according to Tschohl.

Fabergé Reveals Pearl Egg

Fabergé crafted an extraordinary, one-of-kind egg objet dart in collaboration with the Al-Fardan family, a renowned collector of pearls. The Fabergé Pearl Egg is the first egg created in the Imperial Class since 1917 and it draws inspiration from the formation of a pearl within an oyster. The painstakingly crafted mother-of-pearl exterior opens to reveal a unique grey pearl of 12.17-carats, sourced from the Arabian Gulf and exhibiting exceptional purity and a highly unusual shade of grey.

The egg embodies 139 fine, white pearls with a golden luster, 3,305 diamonds, carved rock crystal and mother-of-pearl set on white and yellow gold. Each pearl adorning the Fabergé Pearl Egg was hand-selected by Hussain Ibrahim Al-Fardan from his private collection. An ingenious mechanism enables the entire outer shell to rotate on its base, simultaneously opening in six sections to unveil its treasure.

LAGOS Promotes Exec Team

Jewelry brand LAGOS announced several management changes as part of its strategic focus on continued growth. The company named its founder, Steven Lagos, as the chairman and creative director; Chris Cullen was promoted to the position of CEO; Isabelle Scarchilli was promoted to vice president of marketing; Amanda Willinger was named vice president of digital and ecommerce and Diana Nichols was appointed to a new position as sales director. LAGOS was founded in 1977 in Philadelphia.

MINING

Dominion Diamonds Sales +3%

Dominion Diamond Corp. reported that sales rose 3% year on year to $240.6 million in the fourth quarter that ended January 31. However, the company noted that sales were below expectations since diamond prices softened during the period. Profit will be reported later. The company sold 897,000 carats from the Ekati mine for $159.1 million, or $177.40 per carat. Dominion’s 40% share of production from the Diavik mine resulted in the sale of 778,000 carats for $81.5 million, or $104.80 per carat. Revenue totals did not include $11.5 million worth of rough that was sold from the Misery satellite and Misery northeast pipes. Fourth quarter production at Ekati rose 70% to 821,000 carats, while Dominion’s Diavik production fell 28% to 628,000 carats. Dominion’s total production increased 7% to 1.449 million carats during the period.

During the fiscal year, total production grew 31% to 5.98 million carats. Ekati’s production rose 91% to 3.158 million carats, while Diavik production declined 3% to 2.822 million carats. Group sales grew 22% to $915.7 million for the year, excluding $42.5 million worth of sales generated from diamonds processed from the Misery pipes.

Lucara Records a Loss

Lucara Diamond Corp. reported that revenue rose 20% year on year to $70.5 million in the fourth quarter of 2014, even as the rough market softened during the period. Diamond sales grew due to higher prices and despite a 6% drop in the volume of diamonds that were sold, at 104,405 carats. Lucara declared a loss of $16.8 million compared with a profit of $21.3 million a year earlier due to an impairment and restoration charge following the divestment of the Mothae mining project in Lesotho. The average value of Lucaras rough diamonds increased 56% to $675 per carat. All of Lucara’s diamonds came from the Karowe mine in Botswana, which is the companys sole producing mine. Price growth was driven by higher market prices compared with the same quarter in 2013, while Lucara also sold a greater volume of diamonds larger than 10.80 carats.

For the full year, Lucara’s revenue grew 47% to $265.5 million, while profit fell 30% to $45.7 million. Lucaras production fell 2% to 430,000 carats.

STATS 	 

China

2014 $Mil. %Chng.
Polished imports $2,240 31%

All diamond transactions $5,130

ECONWATCH 	  

Diamond Industry Stock Report

Birks (-7%) continued to slide, but JCP (+12%) pleased investors with a stronger fiscal year; Far East shares were lower, led by Luk Fook (-6%), but European shares were slightly higher as Richemont (+2%) led gains. Indian shares all lower except for Goldiam (+1%) and Vaibhav (+3%). Mining shares were mostly higher except for ALROSA (-7%), Lucara (-6%) and Stornoway (-1%). View the detailed industry stock report.

.
Feb. 26 Feb. 19 Chng.
$1 = Euro 0.890 0.880 0.010
$1 = Rupee 61.73 62.07 -0.3
$1 = Israel Shekel 3.96 3.84 0.12
$1 = Rand 11.54 11.68 -0.14
$1 = Canadian Dollar 1.25 1.25 0.00

Precious Metals
Gold $1,209.10 $1,207.70 $1.40
Platinum $1,171.00 $1,168.00 $3.00

Stock Indexes Chng.
BSE 28,746.65 29,462.27 -715.62 -2.4%
Dow Jones 18,214.42 17,985.77 228.65 1.3%
FTSE 6,949.73 6,888.90 60.83 0.9%
Hang Seng 24,902.06 24,832.08 69.98 0.3%
S&P 500 2,110.74 2,097.45 13.29 0.6%
Yahoo! Jewelry 1,332.03 1,337.37 -5.34 -0.4%

Rapaport Weekly Market Comment March 6, 2015

Hong Kong show just meets low dealer expectations with few Chinese buyers. Chinese middle class growing with continued demand for under-the-carat lab-graded stones, but excess inventory is limiting sales. Govt. anti-corruption campaign against conspicuous consumption sharply reducing demand for large expensive stones. Large 3ct+ diamonds not liquid at current price levels. Chow Tai Fook’s gem-set jewelry China same-store sales +62% over Chinese New Year, HK/Macau -17%. Indian cutters stressed about profitability as market liquidity evaporates. De Beers Feb. sight estimated at $550M, average price -2%. U.S. Jan. jewelry sales -2% to $4B. India’s State budget disappoints gem trade.

RapNet Data: Mar. 5

Diamonds 1,588,428
Value $8,630,444,967
Carats 1,475,221
Average Discount -22.88%

www.rapnet.com
The March 1, 2015 increase in RapNet Price Indices (RAPI) reflects a decision by a number of large Indian based suppliers to price diamonds at full Rapaport List prices and not a sharp increase in diamond prices.

Get Current Price List | Subscribe to Rapaport | Join RapNet

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QUOTE OF THE WEEK
The Indian finance minister has completely overlooked one of the most significant areas to curb black money and a long pending demand from the gem and jewelry industry to reduce the gold import duty. Smuggling of gold plagues the industry and leads to illegal trading and the duty reduction would have helped us control the issue to a very large extent.

Vipul Shah | GJEPC

INDUSTRY 	  

RAPI for 1ct. +1% in February

Polished diamond prices remained under pressure in February. There was some improved market sentiment ahead of the Hong Kong show, but trading volume remained constrained and liquidity tight across the manufacturing centers. Buyers lacked confidence to make large inventory purchases and limited their buying to fill existing orders.

The RapNet Diamond Index (RAPI™) for 1-carat laboratory-graded diamonds rose 1% in February. RAPI for 0.30-carat diamonds declined 1.3%, while RAPI for 0.50-carat diamonds fell 1.4%. RAPI for 3-carat diamonds dropped 0.5% during the month. Polished prices softened as traders believe the market hasnt yet bottomed out. Geopolitical issues added to the uncertainty, with Russia and Middle East demand slumped along with the ruble and oil prices. Chinese demand for large diamonds also weakened due to the government’s campaign against corruption and conspicuous consumption. Diamantaires looked to the U.S. for support where there was good demand for SI-I2 clarity diamonds.

HK Show: Business as Usual

The diamond portion of the Hong Kong show lacked the hustle and bustle of exhibitors trading among themselves and visitor traffic was on the light side. Still, there was business being conducted, with demand centered on specific categories.

In general, there was good demand for under 1-carat, H-M, SI diamonds, suitable for the middle-income classes. Prices held relatively stable, at their current low levels, and buyers were hesitant as they suspect prices might soften further, but sellers generally held their ground even if they compromised a bit to close a deal. Global show circuit results are fairly clear at this stage, so dealers must ask themselves how successful they can be if "exceeding low expectations" is the best outcome. Diamantaires must break with simply conducting “business as usual” at these shows by adding real value to their diamonds, to their clients and the industry. Once that occurs, a show in Hong Kong, Basel or Las Vegas could be a game changer for the industry.

De Beers Sight Estimate at $550M

De Beers February sight closed with an estimated value of $550 million and rough diamond prices declined an estimated 2% to 3%. Minor improvements in assortment qualities were also reported. Sightholders said deferrals were lower than they had been in January, but still remained relatively high. Notably, De Beers continued to allow sightholders to defer up to 25% of their requested goods without penalty through March, the last sight of the current contract period.

Sightholders noted that there was a small amount of ex-plan goods made available during the sight. Market sentiment among sightholders and rough brokers improved compared with the sight in January and trading in the secondary market for De Beers boxes picked up this month -- with most boxes trading at around cost. Average credit terms reached 90 days for most boxes, with many diamantaires noting that liquidity in the market is still tight. De Beers contended that the rough market is coming back into better balance as retail polished demand works its way through to the rough market and polished prices have started to stabilize.

RETAIL & WHOLESALE 	  

U.S. Jewelry, Watch Sales -2%

U.S. jewelry and watch sales across all channels fell 1.9% year on year to $4.55 billion in January, according to preliminary figures. Data revealed that jewelry sales fell 1.6% to $4 billion, while sales of watches contracted 4.8% to $532 million during the month. In addition, January became the fourth consecutive month with sales declines in the sector. As expected, sales totals were revised slightly lower for December. In all, combined jewelry and watch sales growth in 2014 was narrowed to just a 1% year on year gain at $78.595 billion with jewelry sales totaling $69.164 billion and watch revenue reaching $9.436 billion.

Berkshires Retail Sales Improve

Berkshire Hathaway reported that revenue from its retail division rose 3% percent year on year, representing $134 million in additional sales, in 2014. The holding company did not provide totals for each of its retail brands that include Borsheims Fine Jewelry, Ben Bridge Jeweler and Helzberg Diamonds, as well as four home furnishings businesses, See’s Candies and Pampered Chef. The retail sectors pre-tax earnings declined 9%, or by $32 million, compared with 2013. Berkshire Hathaway’s overall group revenue rose 7% year on year to $194.67 billion in 2014, while profit grew 2% to $19.87 billion.

Luk Fooks Sales Drop

Luk Fook Holdings Ltd. reported same-store sales across all operations for the Chinese New Year Festival fell 21% year on year. Comparable-store sales for gold dropped 29%, while gem-set jewelry sales declined 10%. The company did not provide hard totals. However, in Mainland China same-store sales rose 15% with comparable-store sales of gold up 3% and sales of gem-set jewelry up 65%. The figures for Hong Kong and Macau were bleak as overall comparable-store sales fell 25%, with gold down 34% and gem-set jewelry lower by 14%.

Chow Tai Fooks Sales Rise

Chow Tai Fook reported that revenue grew 9% year on year during the Chinese New Year holiday shopping period and was spurred by strong sales of gem-set jewelry in Mainland China. However, the company did not provide sales figures. Revenue from Mainland China rose 22% for the festival, while sales in Hong Kong and Macau dropped 24%.

The companys same-store sales over Chinese New Year decreased 4%. In Mainland China, same-store sales grew 11%, while comparable-store sales in Hong Kong and Macau fell 29%. Total same-store sales for gem-set jewelry increased 26% during the holiday period, led by a 62% jump for Mainland China. Gem-set jewelry sales fell 17% in Hong Kong and Macau. Gold product sales in Mainland China fell 2% but in Hong Kong and Macau they plunged 38%.

U.S. Jewelry CPI -4%

The U.S. consumer price index (CPI) for jewelry dropped 4.1% year on year to 166.07 points in January, which was about 4 points higher than Decembers reading. Comparatively, the CPI for watches rose 2.3% to 122.79 points in January, which resulted in a new index high for the month.

Meanwhile, diamond prices during January contracted, according to the RapNet Diamond Index (RAPI), the global benchmark for polished prices. RAPI for 1.00-carat diamonds plunged 10.2% year on year, while RAPI for 0.30-carat stones fell 8.8%, RAPI for 0.50-carat dropped 3.1% and RAPI for 3.00-carat diamonds declined 6.7%. Gold prices in January rallied to their highest level since July; however, the run failed to boost the average price, leaving the metal about 6% lower than one year earlier. Platinum, on the other hand, remained under pressure, falling about 15% in January compared with 12 months ago. Silver plunged 19%.

The CPI for all consumable product categories in January was basically unchanged from one year ago, down 0.1%, at 233.7 points.

Sothebys Promotes David Bennett

Sotheby’s appointed David Bennett to the newly created position of worldwide chairman of jewelry. In his new global role, Bennett — who is based in Geneva, Switzerland, will help design and implement a strategy of continued expansion and business development for the jewelry branch of the auction house. Jewelry sales at Sotheby’s in 2014 garnered $603 million, the highest annual total for the category ever. It also marked the third year in a row of record jewelry sales for Sotheby’s.

Bennett has been with Sotheby’s for 40 plus years, joining the firm in 1974. During that time he has sold seven diamonds over 100 carats earning him the title “100- Carat Man.” In December of 2013, Bennett was named among the top 10 most powerful people in the art world by Art + Auction magazine and in June 2014 he made the list of the top 50 “most influential persons in Switzerland” published by Bilan, a Swiss financial and business magazine.

Over the years, Bennett has overseen several high profile sales. In addition he co-authored two books with Daniela Mascetti, "Understanding Jewellery," which has been in print since 1989 and is widely acclaimed as the consummate reference book, and "Celebrating Jewellery," published in 2012.

Swiss Watch Group Launch Smartwatches

Manufacture Modules Technologies (MMT) of Geneva, a Swiss joint venture between Fullpower Technologies of California and Union Horlogere Holdings, launched the MotionX Horological Smartwatch Open Platform. Fullpower will create and manage the schematic design, firmware, smartphone applications, as well as the cloud infrastructure for the watches, while MMT will manage the Swiss watch movement development, production and licensing and support for the watch industry.

Powered by MotionX®, the Swiss Horological Smartwatches offer bi-directional communication with iPhone and Android apps, while maintaining traditional Swiss watch craftsmanship. There is no digital screen on a Swiss Horological Smartwatch, so the timepiece retains a classic look. The first smartwatches will support a two-year battery life, activity tracking such as sleep monitoring, sleep cycle alarms, get active alerts, adaptive coaching and the MotionX cloud to backup and restore data. The initial partners include watchmakers Frederique Constant, Alpina and Mondaine.

Forevermark Confirms Strategy Works

The Forevermark diamond brand confirmed that it experienced strong growth in 2014 with the retail value of sales topping out around $750 million, according to Stephen Lussier, Forevermarks CEO. In addition, Forevermarks store presence increased 20% year on year to 1,542 locations. Demand for the branded diamonds was strong in the U.S. and increasingly higher in India and China due to an emerging middle class.

Lussier stated that consumer preference for branded diamonds and diamond jewelry should increase in 2015, and given Forevermark’s ethical background, assurance, quality and integrity, it is positioned to succeed above all others. Forevermark’s licensee program expanded in Turkey during the year and just since the launch in May, the brand is now available in 42 stores through an exclusive partnership with Zen Diamond. In addition, Middle East partner Damas opened a new store in Saudi Arabia that sells Forevermark diamonds. The brand also launched in Botswana.

The Forevermark Diamond Institute inscribed its one millionth diamond in 2014, while grading of stones increased 67% year on year and inscriptions rose 47%, according to the group.

Ministers Budget Disappoints

Indias Finance Minister, Arun Jaitley, presented the fiscal budget for 2015 and with a couple of exceptions, industry leaders felt it missed key growth initiatives that are tied to the "Make in India" scheme. Mehul Choksi, the chairman of the Gem and Jewelry, Luxury and Lifestyle Forum (GJLL) of FICCI (Federation of Indian Chambers of Commerce and Industry), said that none of the relief measures that were recommended to boost the jewelry manufacturing sector under the "Make in India" initiative were even considered.

Choksi said, “The finance minister has announced a slew of measures to curb black money in India, while ignoring one of the biggest issues due to gold smuggling to the tune of 180 tons that has come into India through unofficial channels in 2013.” Choksi contended the impact of this unofficial supply of gold is valued at about $10 billion, "leading to a loss in foreign exchange inflow of a similar amount and a loss in revenue of over $1 billion on account of customs duty.”

The chairman of the Gems & Jewellery Export Promotion Council (GJEPC), Vipul Shah, said, “As far as the gems and jewelry industry is concerned, our only reaction is disappointment. The finance minister has completely overlooked one of the most significant areas to curb black money and a long pending demand from the gem and jewelry industry to reduce the gold import duty. Smuggling of gold plagues the industry and leads to illegal trading and the duty reduction would have helped us control the issue to a very large extent.”

Choksi found one initiative in the budget that he agreed with. “The gold monetization announcement is a positive initiative by the government and we hope that it is implemented well and is investor friendly.”

Shah, too, appreciated this move by the finance minister stating, “We commend the finance minister’s effort to identify innovative ways to reduce demand for overseas gold demand and control the current account deficit by introducing the gold monetization scheme to and Indian gold coins.”

Court Annuls Tiffanys Payout to Swatch

The ordinary court of first instance (District Court) of Amsterdam annulled a $450 million arbitration charge that Tiffany & Co. paid to the Swatch Group. Swatch originally sued Tiffany in 2011 over a failed partnership that began in December 2007. Swatch initially sought damages of between $75 million and $4 billion, promting Tiffany to counter sue for damages of between $125 million $550 million. Ultimately, Tiffany paid CHF 402.7 million plus court fees, interest and other costs.

One year ago, Tiffany petitioned the court to set aside that arbitration award on statutory grounds, which is permitted under Dutch law. Tiffany stated that should Swatch appeal this decision, the annulment action will not be resolved for at least 18 months. In its own statement, Swatch vowed to contest the courts ruling, defining the decision as "purely formal" and "is not enforceable and has no material consequences" for the group.

MINING 	  

Trans Hex Observes Lower Prices

Trans Hex sold 27,553 carats from its South Africa operations for $30.5 million between October and February, but the group observed that average prices fell 25% from earlier in the year as it offered far fewer special-sized stones. Eleven stones achieved better than $10,000 per carat, including one exceptional pink diamond of 2.70 carats from the Baken mine, which garnered $60,722 per carat. A 42.60-carat diamond from Baken sold for $988,888. In Angola, Trans Hex holds a 33% stake in the Somiluana mine where sales totaled $15.1 million for 37,302 carats between October and January. Here too, the average rough prices achieved fell 21% compared with earlier in the year due to variations in the size and quality of the stones offered, as well as a slight decrease in global prices.

Gemfields Auction Exceeds $14M

Gemfields plc. sold 10.1 million carats of lower-quality emeralds and beryl from its Kagem mine in Zambia for $14.5 million, or an average of $3.72 per carat. The auction set a new record average value per carat for lower-quality emerald. The auction took place in in Lusaka and was 73% sold by lot and 88% sold by value with 21 companies in attendance. Ian Harebottle, the CEO of Gemfields, explained that the company has held seven auctions in Lusaka over the past 22 months.

ALROSA Divests of Bank

ALROSA sold its 84.66% stake in MAK-Bank to Expobank, on February 26, following approval from the Central Bank of Russia. The sale was part of the companys non-core asset disposal plans to focus its operations exclusively on diamond mining, ALROSA said. MAK-Bank has 10 offices in Russia and provides services to companies and individual clients, including ALROSA employees and Yakutia residents. Expobank operates 17 offices in Moscow, Saint Petersburg, Novosibirsk, Kemerovo, Yekaterinburg, Perm, Krasnoyarsk and Surgut.

Diamcor Records a Loss
Diamcor Minings revenue plunged 37% year on year to $708,918 (CAD 886,343) during its third fiscal quarter that ended December 31. Diamcor, which operates the Krone-Endora at Venetia project, said that the amount of rough diamonds sold dropped 10% to 3,579 carats at an average price of $222 per carat. The company noted that it recovered an additional 1,678.18 carats that were held in inventory at the end of the quarter. Diamcor estimated the value of its rough diamond inventory at $281,712, as of December 31. The company reported a loss of $515,070 for the quarter, compared with net income of $97,546 a year ago.

Simpson Joins True Norths Board

True North Gems Inc. appointed Raymond Simpson to its board of directors. Simpson has more than 20 years of experience in the diamond industry and is currently the managing director of Diamond Asset Advisors, a Swiss based alternative investment advisor that specializes in diamond related investment and financial products. Until recently, Simpson was an executive vice president of Dominion Diamond Corp., which he joined in 2003, when the mining company was known as Aber Resources, to oversee a strategic expansion into retail.

ECONWATCH 	  

Diamond Industry Stock Report

Industry shares sank into negative territory this week, with all U.S. shares lower except Kohls (+3%). Far East shares fell on weak Chinese New Year sales, led by Luk Fook (-14%). European shares were mixed with Damiani (+6%) ahead and Swatch (-2%) behind. Indian shares lower, except Classic Diamond (+7%) and Lypsa (+3%). Mining shares took a hit, except for ALROSA (+6%), Mountain Province (+2%), Gemfields (+3%) and Stellar (+3%). View the detailed industry stock report.
Mar. 5 Feb. 26 Chng.
$1 = Euro 0.910 0.890 0.020
$1 = Rupee 62.46 61.73 0.7
$1 = Israel Shekel 4.00 3.96 0.04
$1 = Rand 11.84 11.54 0.30
$1 = Canadian Dollar 1.25 1.25 0.00

Precious Metals
Gold $1,197.00 $1,209.10 -$12.10
Platinum $1,177.00 $1,171.00 $6.00

Stock Indexes Chng.
BSE 29,448.95 28,746.65 702.30 2.4%
Dow Jones 18,135.72 18,214.42 -78.70 -0.4%
FTSE 6,961.14 6,949.73 11.41 0.2%
Hang Seng 24,193.04 24,902.06 -709.02 -2.8%
S&P 500 2,101.04 2,110.74 -9.70 -0.5%
Yahoo! Jewelry 1,326.42 1,332.03 -5.61 -0.4%

Rapaport Weekly Market Comment March 13, 2015

Polished trading stalls as Hong Kong show sales disappoint. Dealers can’t buy if they can’t sell. Buyers have become more selective as the market slows creating opportunities for suppliers with the best goods. Sharp decline in manufacturing expected to create shortages which will help future demand. Antwerp concerned as bank financing dries up. Luk Fook’s Chinese New Year same-store sales -21%, gem-set jewelry +65% in China. U.S. Jan. polished imports -3% to $1.8B, exports +3% to $1.4B. Belgium’s Feb. polished exports +9% to $1.8B, rough imports -24% to $1B. ALROSA launches 2M ct/year Botuobinskaya diamond mine.

RapNet Data: Mar. 12

Diamonds 1,568,680
Value $8,552,991,388
Carats 1,459,286
Average Discount -23.52%

www.rapnet.com

The March 1, 2015 increase in RapNet Price Indices (RAPI) reflects a decision by a number of large Indian based suppliers to price diamonds at full Rapaport List prices and not a sharp increase in diamond prices.

Get Current Price List | Subscribe to Rapaport | Join RapNet

RAPAPORT ANNOUNCEMENTS
March 20 Fri

Rapaport Presentation on Investment Diamonds

On Friday, March 20 at 11 a.m., during The Diamond Show in Basel, Switzerland, Martin Rapaport will address the framework for a transparent, competitive and liquid market for investment diamonds.

To attend or obtain additional information, please email invest@diamonds.net.

March 19-23 Thu-Mon

The Diamond Show

Basel, Switzerland

Learn More & Register:
www.thediamondshow.net
Mar-Apr 24-1 Tue-Wed
Rapaport Melee Auction

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

April 12-15 Sun-Wed

Rapaport Single Stone Auction 

Israel

www.rapaportauctions.com

QUOTE OF THE WEEK
The past six months have been one of intense operational effort at Firestone Diamonds with the creation of approximately 1,000 jobs in Lesotho. All major construction contracts have been finalized and good progress has been made to date. The Liqhobong project remains on schedule to achieve initial production at the end of first-half 2016.

Stuart Brown | Firestone Diamonds

INDUSTRY 	  

Swiss Watch Exports +4%

Swiss watch exports rose 3.7% year on year to $1.62 billion (CHF 1.6 billion) in January, according to the Federation of Swiss Watches. Exports by volume rose 4% to 2.186 million units. Exports of watches priced above $3,043 increased 7.5%, while exports of timepieces priced between $507 and $3,043 fell 4.8%. Exports of watches for the mid-market segment, priced at between $202 and $507, rose by 5.3%, while exports of watches priced below $202 declined 0.7%.

U.S. Jewelry Store Sales -4%

The U.S. retail jewelry market remains in a slump. U.S. specialty jewelry store sales fell 4.1% year on year to $1.997 billion in January, marking the third consecutive monthly contraction. Still, Januarys figures were not unexpected following a 1.9% decline for all jewelry and watch sales during the month at $4.5 billion.

Meanwhile, advanced sales estimates for February signaled continued consumer spending softness as total retail sales, excluding automobiles, rose just 0.3% to $308.2 billion. Advanced estimates for department store sales fell 3.1% year on year to $11.15 billion in February. Retail trade sales rose 1%, the weakest increase in more than one year. Nonstore retail sales increased a solid 8.6%.

RETAIL & WHOLESALE 	  

Huawei, GUESS Launch Smartwatches

Apple isnt the only company making waves with watch gadgets this week. The Huawei Consumer Business Group and Guess Watches both debuted smartwatches at the Mobile World Congress 2015 in Barcelona, Spain.

Huawei unveiled the Huawei Watch, powered by Android Wear™, featuring a fully circular timepiece with a 1.4-inch touch-sensitive AMOLED display, scratch-proof sapphire crystal lens, cold-forged stainless steel frame, a built-in heart rate monitor and 6-Axis motion sensors. The Huawei Watch is the first smartwatch in the Huawei wearable family.

GUESS partnered with Martian Watches, a California-based developer of fashionable smartwatches, to deliver a multi-function, fashion chic smartwatch line, designed for men and women. Fashioned after its style called RIGOR, this boldly styled smartwatch is powered by Martian technology that is updateable and replaceable.

Hublot Launches New Collection

Hublot launched the Big Bang Unico Full Magic Gold watch in celebration of the tenth anniversary of the watchmakers iconic Big Bang timepiece. It is crafted from Magic Gold, a scratch resistant alloy certified as 18-karat gold and developed by Hublot in 2011. Hublots Magic Gold originates from a fusion of 24-karat gold and high-tech materials expertise. It is produced in-house through a complex process at the companys Nyon Manufacture facility. Hublot introduced the first watches made from Magic Gold at Baselworld 2012 with a very limited Big Bang Ferrari edition.

LAzurde Returns Dividend for Investors

The Investcorp Gulf Opportunity Fund, which acquired a majority stake in the LAzurde jewelry firm in 2009 alongside Eastgate Capital and The National Investor, distributed $16.7 million in dividends from the jewelry brand to its shareholders after strong performance in 2014. Mohammed Al-Shroogi, Investcorps president of Gulf business, said that a performance improvement strategy reorganized and repositioned the company. "We have enhanced its market positioning, increased its competitiveness and strengthened its balance sheet. This strategy has improved LAzurdes financial performance steadily over each of the last five years. Today the company is highly profitable and this has allowed the board to declare and distribute a dividend to shareholders."

The consortium has also recently increase marketing spending to include several renowned brand and collection ambassadors such as Elissa, Lady Fozaza and Dorra Zarrouk. This past month in Kuwait, L’Azurde showcased its new 2015 jewelry collection at the Marina Hotel, inviting its biggest clients along with important partners and gold distributors.

PC Jeweller, Blue Nile Partner

PC Jeweller signed a collaboration agreement with Blue Nile, aiming to evaluate Indias market for potential online jewelry sales. The agreement marks a possible stepping stone toward a potential strategic partnership between the two companies, PC Jeweller stated. PC Jeweller sells jewelry online through its affiliated website, www.wearyourshine.com, created to replicate the in-store consumer buying experience at its 50 retail stores throughout 42 cities in India. Currently, Blue Nile does not ship to India but supplies 45 countries throughout North America, Asia Pacific, Europe and the Middle East.

DFHK Launches Assurance Scheme

The Diamond Federation of Hong Kong, China (DFHK) launched its Natural Diamond Quality Assurance (NDQA) Mark scheme to drive consumer confidence for buying diamonds in the city. The scheme provides consumers with a assurance that the diamonds they buy are natural. The 332 merchants that are participating in the scheme have committed to not sell synthetic – otherwise known as lab-grown – diamonds, or any other non-natural diamonds. Among those participants are the major retailers Chow Tai Fook, Chow Sang Sang, Luk Fook Holdings and Tse Sui Luen Jewellery.

Battle-Hardened Robbers Strike in France

Armed thieves attacked two heavily guarded vans carrying jewels at the Avallon toll booth in Yonne, France, making off with $11 million in merchandise, police said Wednesday. The heist was well-planned, and security forces were working to find suspects, searching within a large perimeter around the area and under the watch of air support some 200 miles southeast of Paris. A police source described the 15 robbers as "heavily armed and battle-hardened." The vans were found burned out and abandoned in a field not far from the toll booth.

U.S. Losses Mount From Crime

Dollar losses from criminal activity aimed against the U.S. jewelry industry in 2014 jumped nearly 17% year on year to $77.8 million due to a surge in the number of smash-and-grab robberies, according to the Jewelers Security Alliance (JSA). However, the groups annual crime report noted that the number of crimes against the industry as a whole decreased from 1,414 in 2013 to 1,381 in 2014. There was also a significant decline in lower dollar value grab-and-run burglaries, the JSA found.

Still, the number of smash-and-grab robberies jumped 77.4% in 2014, and arrests by law enforcement soared 64.5% to 694 during the year. The greater number of arrests was the result of intense work and cooperation by the FBI and local police in investigating major gangs that operate throughout the U.S., including continuing investigations of crimes committed in prior years. The JSA found that the main crime scene for our industry in 2014 was at shopping malls, followed by stand-alone stores, strip centers, downtown shops and, finally, a variety of sites including office buildings, hotels and other locations.

U.S., India Issue Trademarks

The U.S. Patent & Trademark Office (USPTO) issued the trademark "Science of Sparkle" on March 3 to Electronic Commodities Exchange LP of White Plains, New York with registration number 4696388. The trademark "Joining Hearts Collection" was issued to Coloron Jewelry Inc. of Van Nuys, California on March 3 with registration number 4696783. Le Vian Corporation of Great Neck, New York received the trademark "Fancy Truffle Diamonds" on March 3 with registration number 4697467. The USPTO issued the trademark "Cherished Love First" to Sandeep Diamond Corporation of New York on March 3 with registration number 4696598. The trademark "Kellmer Jewelers" was issued to Jeffrey Kellmer Jewelers LLC of Haverford, Pennsylvania on March 3 with registration number 4696841.

In India, the Office of The Trade Marks Registry approved the trademark "Kama Platinum" for Kama Schachter Jewelry Pvt. Ltd. of Mumbai on January 12, with registration number 2276781.

Ray Joins Leibish & Co.

Leibish & Co. appointed Sandy Ray as the companys new executive vice president for North American sales. With 35 years of experience serving the trade, predominantly in the U.S., Ray will oversee the expansion of Leibishs wholesale division in North America. Ray is a second-generation diamantaire, with vast experience in the diamond and jewelry industry. He was an early adopter of the online channel and founded a business-to-business diamond platform, Leibish noted.

Israel to Host Presidents Meeting

The Israel Diamond Exchange (IDE) and the Israel Diamond Manufacturers Association (IsDMA) will host the biennial presidents meeting of the World Federation of Diamond Bourses (WFDB) and the International Diamond Manufacturers Association (IDMA) in Israel, at the Tel Aviv Hilton Hotel, from June 14 to 16, 2015. The leaders of the 30 diamond bourses that are affiliated with the WFDB and IDMAs 16 member organizations plan to discuss pressing issues that affect the global diamond industry. The presidents meeting takes place every two years, with a full World Diamond Congress being held in the intervening years.

AWDC to Assist Brazil

The Antwerp World Diamond Centre (AWDC) will accompany Secretary of State for Foreign Trade, Peter De Crem to Brazil on a trade mission. The AWDC will organize a seminar on the Kimberley Process regulations to help miners in Brazil understand how to trade diamonds legally. “Antwerp is one of the leaders as concerns application of the strict Kimberley Process regulations, and with the more than 550 years of experience as a trade center that we have to offer, Brazil is welcoming us with open arms,” said Ari Epstein, the CEO of AWDC. In addition, AWDC, through WeForest will plant 24,290 trees in an area the size of 12 football fields where mining has decimated the landscape.

Later this year, the Antwerp diamond sector will participate as a co-organizer of the GMB Brazil (Global Minerals Business Brazil) conference. The objective of this event is to bring the Brazil and Antwerp diamond and jewelry players closer together.

MINING 	  

ALROSA Mines Botuobinskaya

ALROSA began mining ore at the Botuobinskaya kimberlite in the Republic of Sahka, Yakutia. The pipe is expected to produce 1 million carats out of 230,000 tonnes of ore in 2015, with production set to exceed 2 million carats once the deposit reaches its design capacity of 400,000 tonnes of ore per year. Botuobinskaya is an open-pit mine and forms part of the companys Nyurba Mining and Processing Division (MPD). The pipe will compensate for a production decrease at the Nyurbinskaya pipe and ensure that Nyurba MPD maintains stable output of 7.5 million carats per year.

Botuobinskaya is the first new pipe in Yakutia in 10 years and will work toward helping ALROSA acheive diamond production of 41 million carats per year. As of January 2015, Botuobinskaya JORC-compliant reserves totaled 71.04 million carats.

Gemfields Profit Jumps

Gemfields plc reported that its revenue rose 57% year on year to $103.4 million during the six months that ended on December 31. The company attributed the rise to strong demand at its gemstone auctions and increased production from its emerald and ruby mines. The companys profit more than tripled to $23.2 million. The company had $49.7 million cash in hand, while its inventory at the end of the period was valued at $101.1 million. Emerald production at the Kagem mine in Zambia increased 16% year on year to 12.1 million carats. Meanwhile, ruby and corundum production at the companys 75% owned Montepuez ruby deposit in Mozambique rose 23% to 6.1 million carats.

Dominion Updates Diaviks Reserves

Dominion Diamond Corporation updated its reserves and resources statement on the Diavik mine, adding an additional 3.9 million tonnes of ore that contained approximately 13 million carats. As of December 31, Diavik had 18.1 million tonnes of proven and probable mineral reserves, containing 53.3 million carats of diamonds -- up from 46.8 million carats one year earlier. At the A-21 pipe, 3.7 million tonnes containing 10 million carats has been promoted to proven reserve material. In addition, at the A-154 North pipe, 0.24 million tonnes of inferred resources "at depth" were promoted to probable mineral reserve status. Within the remaining reserve at the A-154 North pipe, 0.5 million tonnes were promoted from probable reserve to proven reserve, supported by sampling.

Price models, based on Dominion diamond sales in January, were updated as follows: A-154 South at $135 per carat, A-154 North at $180 per carat, A-418 at $95 per carat, A-21 at $135 per carat and COR at $45 per carat.

Firestone Reduces Loss

Firestone Diamonds reduced its loss to $4.4 million for the first half that ended on December 31, compared with a loss of $7.7 million one year earlier. The junior miners consolidated net cash was $47.3 million, total debt facilities were $112.4 million and corporate costs decreased to $1.6 million, compared with $2.2 million. The Liqhobong project in Lesotho, which opened in late June 2014, is operating within budget and on schedule to achieve initial production by the end of June 2016. The BK11 mine in Botswana remains on care and maintenance and this asset disposal process is ongoing.

Catoca Appoints New Director

The Mining Society of Catoca appointed Sergei Mitiukhin for a four-year term as managing director of Catoca, following a decision adopted by shareholders of the Society at its general assembly meeting, held on February 25. The new Catoca director will be assisted by two deputy directors-general of Angolan nationality to be appointed in coming days by the National Diamond Company (Endiama EP.)

STATS 	  

U.S.A.

Jan. $Mil. %Chng.
Polished imports $1,827 -3%
Polished exports $1,379 3%
Net imports $447 -19%

Rough imports $14 -74%
Rough exports $12 -79%
Net imports $2 -50%

Net diamond account $449 -18%

Belgium

Feb. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,766 9% $2,575 -1%
Polished imports $1,000 11% $2,114 -4%
Net exports $766 -7% $461 14%

Rough imports $1,040 -24% $1,879 -31%
Rough exports $1,057 -26% $1,906 -29%
Net imports ($17) ($27)

Net diamond account $783 -11% $488 5%

ECONWATCH 	  

Diamond Industry Stock Report

Only minor fluctuations across U.S. industry stocks this week as investors weigh consumer data but Far East shares were lower, led by Chow Tai Fook (-7%). Europe mainly higher with Kering (+5%) leading gains. Indian shares all lower except Rajesh Exports (+14%). Miners mostly lower with Petra (-10%) weighing on the sector. View the detailed industry stock report.
Mar. 12 Mar. 5 Chng.
$1 = Euro 0.942 0.910 0.032
$1 = Rupee 62.52 62.46 0.1
$1 = Israel Shekel 4.00 4.00 0.00
$1 = Rand 12.31 11.84 0.47
$1 = Canadian Dollar 1.27 1.25 0.02

Precious Metals
Gold $1,152.30 $1,197.00 -$44.70
Platinum $1,113.00 $1,177.00 -$64.00

Stock Indexes Chng.
BSE 28,930.41 29,448.95 -518.54 -1.8%
Dow Jones 17,895.28 18,135.72 -240.44 -1.3%
FTSE 6,761.07 6,961.14 -200.07 -2.9%
Hang Seng 23,797.96 24,193.04 -395.08 -1.6%
S&P 500 2,065.95 2,101.04 -35.09 -1.7%
Yahoo! Jewelry 1,336.62 1,326.42 10.20 0.8%

Rapaport Weekly Market Comment March 20, 2015

Weak demand severely restricting trading volume at current price levels. Shortages developing as Indians cut back production of better qualities by about 50%. Markets may stabilize if supply is reduced to lower levels of demand. Caution: Next week’s large sight may destabilize market as it increases supply and reduces liquidity in a highly problematic market with too many diamonds chasing too few buyers. Trade is advised to buy polished instead of rough and stop adding fuel to the fire. Gem Diamonds 2014 revenue +27% to $271M, profit +57% to $33M. India’s Feb. polished exports +4% to $2.3B, rough imports -23% to $1.1B. The Diamond Show opens March 19 at Markthalle in Basel.

RapNet Data: Mar. 19

Diamonds 1,368,766
Value $7,630,345,518
Carats 1,294,985
Average Discount -22.27%

www.rapnet.com

The RapNet price index (RAPI) has been revised to reflect the average price of the ten best priced diamonds in each category.

Get Current Price List | Subscribe to Rapaport | Join RapNet

RAPAPORT ANNOUNCEMENTS
March 20 Fri

Rapaport Presentation on Investment Diamonds

On Friday, March 20 at 11 a.m., during The Diamond Show in Basel, Switzerland, Martin Rapaport will address the framework for a transparent, competitive and liquid market for investment diamonds.

To attend or obtain additional information, please email invest@diamonds.net.

March 19-23 Thu-Mon

The Diamond Show

Basel, Switzerland

Learn More & Register:
www.thediamondshow.net

Mar-Apr 24-1 Tue-Wed

Rapaport  Melee Auction 

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

April 12-15 Sun-Wed

QUOTE OF THE WEEK
I believe in the power of solidarity. I have experienced troubles of my own. It has been the solidarity of others that has helped to strengthen my courage and resolve to continue my journey.

Rafael Marques de Morais | Blood Diamonds: Torture and Corruption in Angola

RETAIL & WHOLESALE

Swiss Watch Exports -2%

Swiss watch exports fell 2% year on year to $1.7 billion (CHF 1.689 billion) in February, according to the Federation of Swiss Watches. The group stated that the decrease was largely due to a sharp decline in exports to Hong Kong coupled with a dip in demand for precious metal timepieces. Exports by volume rose 2.6% to 2.189 million units. The federation explained that watch exports priced below $201 grew 9.2% by value and 6.2% by volume. The segment was the only price point that experienced growth during the month.

All timepieces priced over $201 saw a roughly 4% decline in terms of both value and volume. Exports of precious metal timepieces declined during the month, too, with gold watch exports down by 6.1%, while steel watch exports fell by 2.8%. Hong Kong, one of the three leading export markets for Swiss watches, saw the steepest decline in two years, down 21.8% to $276.9 million. Swiss watch exports to the U.S. rose 7.5% to $195.9 million, while exports to China increased 7% to $109.2 million. The European markets of Italy and the U.K reported sustained growth with exports to Italy up 17.6% to $98.9 million and exports to the U.K. up 54.2% to $96.6 million.

TAG Heuer, Google, Intel Partner on Smartwatch

TAG Heuer, Google and Intel formed a partnership to launch a Swiss smartwatch that is powered by Intel® technology and Android Wear. The collaboration was made official at Baselworld in the TAG Heuer booth. TAG Heuer contended that the partnership will create a product that is both luxurious and seamlessly connected to its wearers daily life. Swiss watchmaking and Silicon Valley is a marriage of technological innovation with watchmaking credibility, the partners stated. This collaboration provides a rich host of synergies, forming a win-win partnership and the potential for our three companies is enormous.

Charles & Colvards Loss Widens

Charles & Colvard Ltd. reported that sales fell 10% year on year to $25.6 million in 2014. Revenue across U.S. operations rose 7% to $22.1 million, while international sales plummeted 55% to $3.5 million. Charles & Colvard recorded a loss of $13.1 million compared with a loss of $1.3 million one year earlier. Loose jewel sales, including that of Forever Brilliant® moissanite, fell 30% to $12.9 million; however, sales of finished jewelry jumped 27% to $12.7 million. Wholesale business revenue fell 19% to $20.8 million and accounted for 81% of company sales, down from 90% of total revenue in 2013. Charles & Colvards direct-to-consumer ecommerce business at Moissanite.com generated revenue of $3.4 million, an increase of 36% compared with 2013.

Charles & Colvard appointed Marvin Beasley to the position of president and CEO to succeed Randy McCullough, who informed the board on March 17 that he was retiring. Beasley has served as a director of the company since November 2009 after having spent the last 20 years of his retail career at Helzberg Diamonds, where he held various executive positions.

Knot Fans Spend More in 2014

Fans of The Knot, a popular U.S. wedding resource website, spent an average of $5,855 on engagement rings in 2014, up 5% compared with 2013, according to the companys survey. The Knot found that the total average spending on weddings across its fan base grew 5% year on year to $31,213, while the average number of guests in attendance has shrunk to 136 from 149 in 2009. The Knot concluded that couples are focusing on creating an "amazing guest experience" and reception this year. Couples are choosing more personalized and unique venue locations and they are spending more on elements in the reception and less on the ceremony itself.

Christies Holds NY Sale on April 14

Christie’s will hold its spring sale of magnificent jewels in New York on April 14. The sale features 300 jewels, including diamonds, rare colored gemstones and natural pearls. The sale is expected to achieve a total in excess of $40 million. The top lot is a four-strand natural colored saltwater pearl necklace with a presale estimate of between $3.8 million and $4.5 million. Black pearls are known for their rarity with very few sold at auction over the past 50 years, according to the auction house.

Among the top diamond lots is an 80.73-carat, cushion-shaped diamond estimated to fetch up to $5 million and a 5.29-carat, fancy intense purplish pink diamond with a presale estimate of $3.5 million to $5 million. A 24.49-carat, pear shaped, D, internally flawless diamond has a presale estimate of between $2.5 million and 3.5 million, while a 5.04-carat circular-cut fancy gray-blue diamond has a presale estimate of $1.75 million to $2.5 million.

Sothebys Begins eBay Live Auctions

Sothebys opened its previously announced live auctions on eBay, which is part of eBays new sales platform, for browsing and advance bidding. Sothebys first sale will take place on April 1 with the "New York" sale, which includes some jewelry, and a "photographs" sale. The Sotheby’s live auctions include high-resolution images, hosted video capabilities, and live streaming audio and video. All participants will see the exact item offered in the Sotheby’s New York salesroom and on eBay at the same time and have the ability to bid online in real time.

In other news, Sothebys appointed Tad Smith as its new president and CEO effective March 31 to succeed Bill Ruprecht, who served as CEO since 2000. Smith will also join Sothebys board of directors. Smith, 49, has been president and CEO of the Madison Square Garden Company since February 2014. In this role, he oversaw the overall strategy and day-to-day operations of MSG Sports, MSG Media and MSG Entertainment.

Forevermark Introduces New Services

Forevermark facilitated an ecommerce pilot program that provides the flexibility for authorized partners to be wherever the Forevermark customer shops. Customers pulled into a store through an online purchase allow the Forevermark retailer to act as the showroom and a useful resource for supplemental services. In addition, Forevermark introduced a partnership with Diamond Asset Advisors (DAA) the Diamond Asset Service Program for jewelers, whereas they can obtain Forevermark diamonds on advantageous cash terms. Retailers have the flexibility to add inventory quickly at peak selling periods. The cost of the diamond becomes payable only when it is sold, but it may also be repaid earlier with no penalty. Rates are transparent and competitive.

Forevermark Focus, a regional training event, will return this year and take place in New Orleans and Las Vegas. Additionally, Forevermark announced an e-learning platform for authorized retailers and sales associates that is accessible through Forevermarks B2B website. Training modules are designed to increase knowledge and understanding of Forevermark and enhance selling skills through video, case studies and assessments.

Pandora Expands Disney Collection

Pandora Jewelry unveiled its new spring 2015 Disney jewelry collection that was inspired by iconic love stories and enchanting fairy tales and features 60 jewelry pieces such as earrings, rings, pendants and charms. The new collection highlights Disney Princess characters with jewelry inspired by classic fairy tales, including Cinderella, Snow White, Beauty and the Beast and The Little Mermaid. Pieces are presented in hand-finished sterling-silver and enamel gowns, regal tiara dangles and colorful Murano glass charms. In addition, Mickey Mouse and Minnie Mouse continue to inspire new jewelry items in the spring 2015 collection with a sophisticated interpretation of Mickeys classic silhouette on sterling-silver "Dazzling Mickey" stud earrings. Coordinating "Mickey Silhouette" pieces feature the mouse cutout within a heart-shaped pendant, ring, bracelet and pair of earrings.

Firenze Introduces New Arrivals

Firenze Jewels introduced new arrivals for both bridal and fashion as part of its spring 2015 jewelry collection for the Manhattan showroom. The brand determined that top trends demand Art Deco inspired jewelry, bold gemstone earrings, statement diamond necklaces and an assortment of stackable rings. In addition, popular gemstones include soft cool hues, such as pink and purple amethysts, as well as citrine stones, according to Firenze Jewels. The new collection also reflects various styles that have trended on the red carpet, such as over-sized gemstone dangle earrings and bold diamond necklaces. The company expanded its bridal jewelry with new intricately designed diamond wedding and engagement rings.

GENERAL

Morais Prepares for New Court Challenge

Rafael Marques de Morais, who exposed government and trading corruption in Angolas diamond industry, received a 2015 Index on Censorship Freedom of Expression Award for Journalism in London just days before facing a defamation trial in his home country. He operates the Maka Angola news website. Marques de Morais is the author of "Blood Diamonds: Torture and Corruption in Angola," which revealed the names of companies and government officials who were responsible for torturing and murdering villagers in the name of diamonds. He was subsequently detained by the government, but an initial charge was dropped. Military generals, however, brought criminal libel charges against the author and demand $1.6 million in restitution.

"On my return to Angola from this trip, I will be sitting in court on March 24 as the defendant on 11 separate charges of defamation brought against me by seven powerful generals and four of their business associates. I wrote a book that exposed human rights abuses in the diamond industry, in which the plaintiffs are major shareholders and whose private security company has executed many of the violations," he said. "I am proud and honored to stand up against such a mighty power to enable many of the victims to speak out through my reports, which I have been producing for the past 10 years. I will come out of this trial stronger and empowered by the experience," he said.

De Beers Upgrades DiamondView

De Beers International Institute of Diamond Grading & Research (IIDGR) will provide DiamondView™ instrument upgrade details at GIA GemFest in Basel on March 22. DiamondView is part of the suite of IIDGR verification technology and generates a surface fluorescence image on any stone being tested, providing information on growth history from which synthetics can be identified. The upgraded DiamondView instrument incorporates easy-to-change filters to aid user interpretation of fluorescence images and the detection of synthetics. The latest version will be available for purchase in June.

Schneirla Joins Worthy

Worthy.com appointed Peter C. Schneirla as the companys president, who will assume responsibility for forging strategic partnerships, fostering business growth and overseeing the expansion of Worthys state-of-the-art, in-house grading labs. Schneirla said that as an entrepreneur, he was especially impressed by Worthys team and compelling technology. Previously, Schneirla held various roles at Tiffany & Co., Harry Winston, De Beers, LVMH, the Gemological Institute of America (GIA) and others.

PGI Promotes Reilly

Kevin Reilly was appointed the vice president of Platinum Guild International (PGI) USA after nine years of service. Reilly will report directly to Jenny Luker, the president of PGI USA. In his role, Reilly will lead trade programs and drive business development strategies at manufacturer and retailer levels. A jewelry industry veteran with over 20 years’ experience, Reilly began his career in the executive training program at Macy’s and spent nine years in a variety of different operations roles. Prior to joining PGI, he served as vice president of sales and marketing at Tache USA and as director of customer relations and new business development at Lazare Kaplan International.

Dubai Conference to Attract 500

The Dubai Diamond Exchange (DDE) will host the Dubai Diamond Conference on April 21 and 22. Guest speakers include Paul Rowley, the executive vice president of De Beers Group sightholder sales; Andrey Polyakov, the vice president of ALROSA, and Carlos Sumbula, the president of Endiama. The conference will also welcome Edward Asscher, the president of the World Diamond Council; Ernie Blom, the president of World Federation of Diamond Bourses and Maxim Shkadov, the president of International Diamond Manufacturers Association. Centered on the theme "The New Silk Route," the Dubai Diamond Conference anticipates that 500 will attend.

IIa Opens Diamond Growing Center

IIa Technologies opened a 200,000 square foot, state-of-the-art facility in Singapore to produce commercially-viable man-made diamonds. The diamond greenhouse was inaugurated by Tharman Shanmugaratnam, the Singapore Deputy Prime Minister and Minister of Finance, and was attended by representatives from the Economic Development Board. IIa Technologies also launched a "center of excellence" to further develop existing diamond growing technologies and offer high-quality grown diamonds for various technology industries and applications.

Sarine Unveils Profile

Sarine Technologies unveiled its latest evolution in cutting-edge technology aimed to boost the efficiency of the diamond trade -- the Sarine Profile. The new system provides diamond sellers the ability to “customize, personalize and fully integrate” their diamond’s detailed visual performance onto their websites and at various trading platforms.

The Profile, available in North America as of April, “tells the diamond’s story,” said Uzi Levami, the CEO of Sarine Technologies. The Profile works by combining the technologies of three different Sarine instruments: The Sarine Loupe — which provides a virtual 3D image of the diamond, the Sarine Light — which details and grades the diamond’s light performance, and the Sarine DiaMension — which outlines with graphics the hearts and arrows and the cut and proportions of the stone.

RapNet Advances Inventory Template

RapNet Instant Inventory, the jeweler’s go-to virtual diamond inventory solution, has a new advanced template and responsive design. RapNet’s extensive inventory of 1.5 million diamonds valued at over $8 billion from thousands of international suppliers is now available to select jewelers across the globe. Jewelers can choose the exact diamonds to feature on their websites from RapNet’s large network of vetted suppliers. The jeweler can then set individual mark-ups to ensure their profit margin on every sale. In addition, the new advanced template has a fully responsive design that can be displayed on desktop, tablet and mobile devices and can be customized to match the retailer’s brand for seamless integration into an existing website.

MINING 	  

Gem Diamonds Profit +57%

Gem Diamonds reported that revenue jumped 27% year on year to $270.9 million for the 12 months that ended on December 31. Cost of sales rose 26% to $129.6 million. Profit improved 57% to $33.2 million or 24 cents per share. The board approved a first dividend for shareholders of 5 cents per share for a total of $6.9 million payable on June 9. The mining companys revenue was primarily derived from operations at Letšeng in Lesotho and from rough diamond manufacturing operations in Antwerp. Rough diamond sales included a 12% increase in volume of goods sold from Letšeng at 108,963 carats and a 24% increase in the value per carat at $2,540. Sales from mining operations at Ghaghoo in Botswana were not included since full commercial production had not been achieved during the fiscal year.

Stornoway Records a Profit

Stornoway Diamond Corporation reported a profit of $7.7 million for the third quarter that ended on January 31. Construction on its Renard diamond project in Quebec was 17.4% completed, which was better than the 15.6% completion rate in the companys plan. Incurred costs and commitments as of January 31 totaled $225 million, or 27.7% of its fully-funded capital budget for Renard. The diamond project remains on schedule for first ore production in the second half of calendar 2016 and for commercial production in the second quarter of calendar 2017.

Dominion Updates Ekati Reserves

Dominion Diamond Corporation filed its technical report, as required under National Instrument 43-101, for the Ekati diamond mine, which includes an updated mineral reserves and mineral resources statement. In the report, Dominion Diamond promoted 84.6 million carats of the Jay pipe and 1 million carats from the Lynx pipe to "probable mineral reserves." The entire Ekati project, which includes Koala, Misery, Pigeon, Jay, Lynx and a core zone, buffer zone and stockpiles, was given a total "probable mineral reserves" of 105.8 million carats. Total indicated mineral resources were 143 million carats and total inferred resources were 20 million carats. Mineral resources that are not mineral reserves have not demonstrated economic viability.

Paragon Raises $192K

Paragon Diamonds raised approximately $192,000 (GBP 130,000) in new equity that will enable the company to do due diligence on a potential mine acquisition in Africa. The company did not disclose which mine it was considering, but noted that Paragon is one of a number of potential acquirers of the kimberlite mine.

STATS 	  

India

Feb. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $2,298 4% $4,091 27%
Polished imports $405 -15% $778 -28%
Net exports $1,893 18% $3,313 54%

Rough imports $1,121 -23% $1,972 32%
Rough exports $88 -22% $195 -42%
Net imports $1,033 -25% $1,777 29%

Net diamond account $860 286% $1,536 -25%

ECONWATCH 	  

Diamond Industry Stock Report

U.S., Far East and Europe shares all higher except for Charles & Colvard (-20%), Movado (-1%), Luk Fook (-4%) and LVMH (-1%). Indian shares mixed with C.Mahendra (+15%) way ahead and Goenka (-7%) leading declines. Mining shares mostly lower except Stornoway (+7%), Gem Diamonds (+4%), Petra (+7%) and Stellar (+3%). View the detailed industry stock report.
Mar. 19 Mar. 12 Chng.
$1 = Euro 0.939 0.942 -0.003
$1 = Rupee 62.52 62.52 0.0
$1 = Israel Shekel 4.04 4.00 0.04
$1 = Rand 12.32 12.31 0.01
$1 = Canadian Dollar 1.27 1.27 0.00

Precious Metals
Gold $1,171.90 $1,152.30 $19.60
Platinum $1,121.00 $1,113.00 $8.00

Stock Indexes Chng.
BSE 28,469.67 28,930.41 -460.74 -1.6%
Dow Jones 17,959.03 17,895.28 63.75 0.4%
FTSE 6,962.32 6,761.07 201.25 3.0%
Hang Seng 24,468.89 23,797.96 670.93 2.8%
S&P 500 2,089.27 2,065.95 23.32 1.1%
Yahoo! Jewelry 1,350.95 1,336.62 14.33 1.1%

Rapaport Weekly Market Comment March 27, 2015

Warning: De Beers $700M March sight destabilizing the market as it severely reduces liquidity and increases supply, while polished demand slumps due to weak currencies, Chinese crackdown and lower oil prices. Sightholders over-buying rough to ensure future supply ahead of April 1 new De Beers contract. Trade is advised to buy polished instead of rough and stop adding fuel to the fire. Basel shows slow. ALROSA 2014 revenue +23% to $3B, loss of $284M. Signet 4Q comps +4%, sales +46% to $2.3B, profit +30% to $228M. Tiffany 4Q sales -1% to $1.3B, profit of $196M vs. $104M loss. Antwerp diamond police chief found with confiscated diamonds, arrested on money laundering charges.

RapNet Data: Mar. 26

Diamonds 1,347,543
Value $8,086,869,366
Carats 1,269,532
Average Discount -23.19%

www.rapnet.com

The RapNet Diamond Index (RAPI) has been revised to reflect the average price of the ten best priced diamonds in each category.

Get Current Price List | Subscribe to Rapaport | Join RapNet

RAPAPORT ANNOUNCEMENTS

Mar-Apr 24-1 Tue-Wed

Rapaport  Melee Auction 

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

April 12-15 Sun-Wed
Rapaport Single Stone Auction

Israel

www.rapaportauctions.com
April 18-20 Sat-Mon

The Smart Jewelry Show 

Chicago, Illinois

Visit Rapaport Booth: 413
View the shows website
QUOTE OF THE WEEK
While the fact that the gold price is quoted in U.S. dollars... its relevance is overstated. Gold’s moves are sometimes linked to the dollar, with the metal often trading inversely to moves in the greenback. Changes in global markets and the structure of the gold market should soften the dollar’s influence on gold in the long run.

Juan Carlos Artigas | World Gold Council

INDUSTRY

ALROSA Records a Loss

ALROSA reported a loss of $283.8 million (RUB 16.8 billion) ‎in 2014 as a result of foreign-exchange losses on the companys U.S. dollar-denominated debt, following depreciation of the ruble in 2014. Revenue from diamond sales grew 23% to $3 billion, while total group sales rose 23% to $3.5 billion.‎ The quantity of gem diamonds sold during the year rose 4% to 39.6 million carats. Group ‎production declined 2% to 36.9 million carats. ALROSAs cost of sales increased 20% to $1.8 billion, while group debt increased 42% to $3.3 billion. ALROSA noted that the average price of its gem-quality diamonds ‎fell 3% to $171 per carat during the year. In 2014, rough diamond prices peaked at $199.98 per carat in the second ‎quarter.

Diamond Jewelry Demand +3%

Global diamond jewelry demand rose 2.9% year on year to $81.4 billion in 2014, according to industry insight data published by De Beers. Consumer spending on diamond jewelry continued to rise, despite a fragile world economy, according to Stephen Lussier, De Beers executive vice president of marketing. “The other positive is that retailers across all key diamond jewelry markets are optimistic they will continue to see that level of growth in 2015,” he said.

De Beers revealed
• U.S. diamond jewelry demand increased 7.2% to $37.3 billion.
• Demand in China grew 5.2% to $10.1 billion.
• Demand in India was flat at $3.6 billion.
• Japan’s diamond jewelry demand fell 12.1% to $5.8 billion.
• Demand in the Gulf grew 2.5% to $4.1 billion.
• Everywhere else demand was flat at $20.5 billion.

Data on the U.S., specifically, revealed that market demand is driven by the bridal sector and among affluent consumers who earn more than $150,000 a year. “The U.S. market is a bit narrower than it was before the 2008 crisis, but those two segments have been pretty healthy,” he said. “Bridal, which accounts for about 30% of U.S. sales, has provided a strong foundation for growth that other competitive products don’t have.”

Growth in China is being driven by expansion into tier III and tier IV cities where income levels and price points tend to be lower, influencing growth in demand for VS-SI diamonds.

RETAIL & WHOLESALE 	  

Signets Comps +4%

Signet Jewelers Ltd. reported that sales rose 45.5% year on year to $2.276 billion in the fourth quarter that ended on January 31 and included the Christmas season. The increase was mainly due to Zales contribution of $636.7 million. Signet purchased Zale in May 2014. One year ago, Zale reported revenue of $656.4 million for the same period. Signet groups cost of sales surged 49.1% to $1.364 billion and profit rose 30.1% to $228 million.

Same-store sales across the group improved 4.2%, which included revenue from the groups ecommerce channel and that jumped 89.4% to $149.6 million. Comparable-store sales across the Sterling division, which includes Kay, Jared and regional brands, rose 3.7% in the fourth quarter and the Zale division also improved by 3.7%. U.K. division same-store sales jumped 7.6%.

Signets fiscal year sales increased 36.3% to $5.736 billion, while the cost of sales rose 39.3% to $3.662 billion. The groups profit improved 3.6% to $381.3 million. The value of inventory increased 63.9% year on year to $2.439 billion.

Tiffanys Comps Flat

Tiffany & Co.s sales fell 1% year on year to $1.3 billion during the fourth quarter that included the Christmas season and ended on January 31. Same-store sales were flat. Measured on a constant-exchange-rate basis, worldwide sale rose 3% due to growth in Europe and the Asia-Pacific. Profit rose to $196 million, or $1.51 per share, from a loss of $104 million one year ago, which was the result of the companys arbitration with the Swatch Group. Gross margin as a percentage of sales rose to 60.8% from 60.5% one year earlier.

In the Americas, revenue fell 1% to $653 million in the fourth quarter, while comparable-store sales were flat. Across the Asia-Pacific region, sales increased 4% to $284 million and same-store sales rose 3%. Tiffany & Co. noted strong growth in China, Australia and Singapore. Meanwhile, in Japan revenue fell 13% to $148 million and comparable-store sales declined 5%. In Europe, revenue was flat at $162 million, but same-store sales increased 4%.

For the full fiscal year, worldwide sales improved 5% year on year to $4.25 billion, while comparable-store sales increased 4%. On a constant-exchange-rate basis, worldwide revenue rose 7%. Profit increased 167% to $484 million, or $3.73 per diluted share. Tiffany & Co. had recorded a charge of $473 million in the previous fiscal year due to the Swatch arbitration. Gross margin as a percentage of sales increased to 59.7% compared with 58.1% in 2013. The value of inventory was $2.4 billion as of January 31, representing an increase of 2% from one year earlier.

U.S. Jewelry CPI Drops

The U.S. consumer price index (CPI) for jewelry fell 3.4% year on year to 165.6 points in February, which was the lowest reading for the month since 2010. Comparatively, the CPI for watches rose 1.4% to 124.18 points in February, which resulted in a new index high for the month.

Meanwhile, diamond prices during February contracted, according to the RapNet Diamond Index (RAPI), the global benchmark for polished prices. RAPI for 1.00-carat diamonds plunged 9.6% year on year, while RAPI for 0.30-carat stones fell 12.7%, RAPI for 0.50-carat dropped 6.5% and RAPI for 3.00-carat diamonds contracted 7.8%. Gold prices in February softened as the dollar rose against world currencies, leaving the metal about 8% lower than one year earlier. Platinum, on the other hand, remained under tremendous pressure, falling about 18% in February compared with 12 months ago. Silver plunged 15%.

Christies Completes Watch Sale in Dubai

Christies important watches sale that was held in Dubai on March 19 achieved $3.3 million. All 185 lots offered were sold and the sale marked Christies first 100% sold auction in the Middle East, according to the auction house. The top lot was a rare platinum and 18-karat pink gold, Patek Philippe minute repeating perpetual calendar Ref 5104P, which sold for $461,000. The watch is the most expensive watch ever sold at auction in the Middle East, Christies said.

Stellar Holds Tender in Antwerp

Stellar Diamonds achieved $417,122 from the sale of 4,414 carats in Antwerp. The sale included excellent-quality white stones with a 5-carat rough diamond achieving an average price of $5,000 per carat. The company added that it was pleased with the revenue generated from the sale, especially given that the market for rough diamonds remains very challenging at the moment. Stellar withheld 1,617 carats from the sale as a result of low bids on those lots. The diamonds will be included in future sales. The companys next rough diamond sale is expected to take place in May 2015.

Fewer Buyers Attend Basel

Baselworld 2015 closed after eight days, with organizers noting that 1,500 brands unveiled and showcase new innovative creations, while the number of buyers in attendance fell 3% compared with 2014. The show attracted about 150,000 from 100 countries. In addition, Basel has become somewhat of a media staple as a record number of media personnel attended, more than 4,300 journalists from 70 countries, setting a new record. In addition, livestreaming from the show was followed by some 3,000 journalists.

Sylvie Ritter, the managing director of Baselworld, concluded that the show is strengthening its position as "the leader" in tradeshows each year. "This envied and enviable position has to be defended untiringly; thats why Baselworld moves forward every year, improving convenience and impact and never ceases to innovate to meet the constantly evolving requirements," she said.

GJIIE Attracts More Exhibitors

The 11th edition of the business-to-business Gem & Jewellery India International Exhibition (GJIIE) concluded on March 22, having hosted 300 exhibitors, or nearly 40 more than one year earlier. The shows organizers, UBM India, stated that this platform was important for tapping into the potential of South Indias jewelry market. The diamond pavilion attracted 80 exhibitors, mostly from Gujarat, Mumbai and Hong Kong. Across the entire venue, exhibitors included retailers, artisans and wholesalers that showcased gold, diamonds, pearls, gemstones, silver and allied machinery products. In addition to India-based firms, jewelry exhibitors were also present from Turkey, Dubai, Hong Kong and Thailand. The machinery section of the show attracted manufacturers from Germany, Italy and Japan.

ABN AMRO to Re-enter India

ABN AMRO Bank is planning to serve clients in India and has received "in principle" approval from Indias Central Bank to establish a subsidiary. The Gem & Jewellery Export Promotion Council (GJEPC) has been lobbying for the bank and made a recommendation to the government to grant a banking license to ABN AMRO.

Tiffany & Co. Makes Best Employer List

Forbes named the top 500 best employers in the U.S., ranking Google as the most favored place to work, as scored by its employees. Of those companies on the list that sell jewelry, Costco Wholesale not only topped the retail category, but it was scored as the second-best employer overall. Online auction website eBay, which enables jewelers to sell direct to customers, was ranked at 166, while Nordstrom was ranked at 208. Employees of Coach delivered feedback that resulted in a ranking of 247, Amazon.com was ranked at 329, department store chain Boscovs was ranked at 330, Tiffany & Co. was ranked at 400 and J.C.Penney scored the lowest of all retailers at 494.

Bonhams Builds Its Jewelry Team

Bonhams confirmed four new appointments to its jewelry division in Los Angeles, New York, Geneva and Hong Kong. Dana L. Ehrman, a graduate gemologist, joined Bonhams in the U.S. as a director of fine jewelry in Los Angeles, where she will be based. In November, Bonhams hired Caroline Bostock as its senior specialist in the jewelry department at the companys U.S. headquarters in New York. In Europe, Claire-Laurence Mestrallet, a graduate gemologist, joined Bonhams as specialist within the international jewelry team based in Geneva. Bonhams Hong Kong hired Ellen Sin, a graduate gemologist, as the director of jewelry and jadeite.

Suit Seeks Return of Princie Diamond

Heirs of the late Senator Renato Angiolillo sued Christies International for the return of the "Princie Diamond," which sold for nearly $40 million in April 2013. The suit claims that the diamond still belonged to the family and that Christies failed to conduct due diligence before selling the stone. Christie’s vowed to defend itself, claiming that ownership of the diamond was properly transferred under Swiss law and the suit stemmed from a highly contentious inheritance dispute between family members.

U.S. Affluent Spending Drops for Luxury

Unity Marketing revealed that affluent U.S. consumers spent 26.5% less on luxury goods in the first quarter of 2015 compared with the fourth quarter of 2014. However, in the groups recent Luxury Consumption Index, which measured the spending habits of those with an average income of $266,900, economic confidence improved.

"This is the luxury drought," said Pam Danziger, the president of Unity Marketing, who authored the new report. "People with high incomes have changed their shopping habits, focusing on brands that represent a good value, rather than high-status brands." Danziger told luxury goods marketers that they must regroup and understand how to appeal to affluent consumers since "luxury" has grown into a negative theme.

Marketers must convince affluent shoppers that a product is "worth the price," since premium logos no longer interest consumers and high-quality merchandise is readily available to everyone online. "Technology is leveling the playing field for competitors. It is the ultimate democratic force for consumers. It equalizes all through the power of information," Danziger said. "By contrast the whole concept of luxury brands is based upon a plutocratic idea, or power and influence based upon wealth and prestige. With the idea of luxury brands the ultimate smoke and mirrors of marketing, techno-powered consumers can now pull back the curtain and uncover the myths behind these brands."

Affluent consumers are choosing function and performance over ostentatious style, giving emerging luxury brands a foothold that almost didnt seem possible a decade ago. Affluent consumers are also valuing a personal connection with the artists and designers of those products they buy, driving growth for such brands as jeweler Alex and Ani and platforms such as Etsy. Furthermore, a cultural desire for "responsible consumerism" is creating opportunity for fair trade products.

Police Arrest Antwerp Dealer

Antwerp police arrested a 57-year-old diamantaire on suspicion of diamond fraud in connection with the investigation of a federal police commissioner who was suspected of money laundering, according to the Public Prosecutors office of Antwerp. The commissioner, Agim De Bruycker, who was detained on March 20, was responsible for investigations into diamond industry fraud and he headed the Diamond Squad. He was arrested after authorities allegedly found $549,542 worth of diamonds and gold on his property and $54,954 in cash. Bruycker, 46, allegedly declined to clarify how he had obtained the diamonds and gold.

While the Antwerp World Diamond Centre (AWDC) declined to comment on the specifics of both arrests, they hoped that the judicial investigation is quickly clarified. According to reports from the Belgian press, Bruycker allegedly claimed that he kept diamonds that belonged to the arrested diamond dealer at his home in an effort to conceal them from tax authorities. Belgian press also alleged that there have been numerous irregularities in Bruyckers department and that Brussels authorities recently reopened a diamond fraud case dating back to 2004 that involved two Antwerp firms that had been cleared of any wrong doing.

MINING 	  

Merlin Receives $5M

Merlin Diamonds Limited received a refund of approximately $4.5 million in relation to a research and development expenditure grant for new mining techniques at the companys flagship Merlin diamond mine in the Northern Territory, Australia. The company confirmed that these funds, from the Australian Taxation Office (ATO), provide a significant portion of the capital required to bring the mine into production. Over the past 12 months, Merlin has completed a bankable feasibility study on the Merlin diamond mine and it plans to recommence mining kimberlite ore from eight existing open pits this year.

ALROSA Approves Field Plan

ALROSA’s executive committee approved the development of the Verkhne-Munskoye field during the first half of this year. The project involves building a new diamond mining enterprise, anticipates an annual capacity of 3 million tons of ore and expects to process the ore at the Udachny mining and processing divisions plant №12. The Verkhne-Munskoye primary deposit is located about 160 kilometers from the Udachny plant. The deposit includes four kimberlite pipes with aggregate mineral reserves of 65 million tons of ore. According to ALROSAs current production plan, mining operations at the Verkhne-Munskoye will begin in 2018 and reach its design capacity in 2019. The committee also decided to transport ore from its Zarnitsa pipe to the processing facilities of Udachny using line-haul trains.

Peregrine Transfers Three Projects

Peregrine Diamonds Ltd. transferred the Lac de Gras project in the Northwest Territories and the Nanuq and Nanuq North properties in Nunavut to its wholly-owned subsidiary, Peregrine Exploration Ltd. In addition, Peregrine Diamonds granted Peregrine Exploration an exclusive license to utilize its North American diamond exploration database, which includes information from over 38,000 kimberlite indicator mineral samples that have been collected across Canada over a 10 year period. The Lac de Gras project hosts the nine hectare DO-27 kimberlite, which has an indicated mineral resource of 18.2 million carats and is open at depth, according to Peregrine Diamonds. The Nanuq and Nanuq North properties currently host four diamondiferous kimberlites and the company considers it to have excellent exploration potential.

Botswana Diamonds Receives New License

Botswana Diamonds was awarded a new prospecting license in the Orapa region of Botswana as part of the companys ongoing exploration joint-venture with ALROSA. The Botswana government granted the license to Atlas Minerals, the local subsidiary of the two companies. The license covers 316-square-kilometers directly northwest of PL 207, which is already held by the joint venture. John Teeling, the chairman of Botswana Diamonds, noted that the new license is a small but important step as the company concentrates on specific targets in the area. "We feel that there is a very good chance that unknown kimberlites exist in the area covered by our existing block PL 207 and the new block PL 085," he said.

ECONWATCH 	  

Diamond Industry Stock Report

Industry firms came under pressure, driving stock prices lower for 32 of 50 public companies on the global Rapaport Stock Watch list. Some exceptions were Blue Nile (+3%), Signet (+7%), Lucara (+5%), Rockwell (+10%) and Anglo American (+3%). View the detailed industry stock report.
Mar. 26 Mar. 19 Chng.
$1 = Euro 0.918 0.939 -0.021
$1 = Rupee 62.84 62.52 0.3
$1 = Israel Shekel 3.96 4.04 -0.08
$1 = Rand 11.99 12.32 -0.33
$1 = Canadian Dollar 1.25 1.27 -0.02

Precious Metals
Gold $1,204.10 $1,171.90 $32.20
Platinum $1,150.00 $1,121.00 $29.00

Stock Indexes Chng.
BSE 27,457.58 28,469.67 -1,012.09 -3.6%
Dow Jones 17,678.23 17,959.03 -280.80 -1.6%
FTSE 6,895.33 6,962.32 -66.99 -1.0%
Hang Seng 24,497.08 24,468.89 28.19 0.1%
S&P 500 2,056.15 2,089.27 -33.12 -1.6%
Yahoo! Jewelry 1,343.14 1,350.95 -7.81 -0.6%

Rapaport Weekly Market Comment April 3, 2015

Last weeks De Beers sight estimate revised to $500M as buyers refused about 30% of rough diamonds offered for sale. Rough buyer price resistance is rational and healthy for the market as it protects cutter liquidity and profitability, while reducing oversupply of diamonds during period of relatively weak polished demand. Sightholders have done the right thing by refusing to overpay for rough to safeguard future allocations. Mining companies are encouraged to lower rough prices to levels that ensure reasonable manufacturer profitability and a sustainable diamond trade. THE RAPAPORT PRICE LIST WILL NOT BE PUBLISHED ON APRIL 10 DUE TO THE JEWISH HOLIDAY OF PASSOVER.

RapNet Data: Apr. 2

Diamonds 1,352,299
Value $8,196,976,162
Carats 1,273,731
Average Discount -23.45%

www.rapnet.com
The RapNet Diamond Index (RAPI) has been revised to reflect the average price of the ten best priced diamonds in each category.

Get Current Price List | Subscribe to Rapaport | Join RapNet

RAPAPORT ANNOUNCEMENTS

April 12-15 Sun-Wed

Rapaport Single Stone Auction 

Israel

www.rapaportauctions.com

April 18-20 Sat-Mon

The Smart Jewelry Show 

Chicago, Illinois

Visit Rapaport Booth: 413
View the shows website

April 21-29 Tue-Wed

Rapaport  Melee Auction 

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

QUOTE OF THE WEEK
I was in Dubai last week. I could have been in New York or Shanghai -- the malls all look the same. Homogenization of the luxury model, in a way its good, because it keeps consistency. But it becomes tiring -- and boring.

Uche Pezard | Luxe Corp.

INDUSTRY 	  

Polished Prices Fall in March

Polished diamond prices softened in March as demand was weak and diamond market sentiment deteriorated. Retailers avoided large inventory purchases and buying was focused on just satisfying specific demand for immediate orders. The RapNet Diamond Index (RAPI™) for 1-carat laboratory-graded diamonds fell 2.5% in March. RAPI for 0.30-carat diamonds declined 2.4%, while RAPI for 0.50-carat diamonds dropped 2% and RAPI for 3-carat diamonds fell 1.5%.

Retailers have been largely absent from the market during the first quarter and polished dealers have been focused on buying polished rather than manufacturing rough as they sought to deplete inventory. Manufacturers have lowered their polished diamond production by approximately 30% by volume, 50% by value, since the Diwali holiday. Turnaround times at the Gemological Institute of America (GIA) have subsequently improved from three months to within two weeks as a lower volume of goods is being sent for grading.

Refusals Increase at De Beers Sight

De Beers March sight closed with more than 30% of goods refused and an estimated value sold of $500 million. While there is business underway, dealer sentiment is negative and there is a common perception that polished sales and prices are unlikely to increase in the second quarter. De Beers prices have not been reduced enough to restore profitability in the industry’s midstream and there were no significant changes in the assortment quality of boxes.

Sightholders also noted that a very small amount of ex-plan goods was made available. De Beers concurred that the trading is slow but it expects improvement by the third quarter and believes that jewelry sales are growing at a decent pace. For the new contract period, which began April 1, sightholders who demonstrated strong, sustainable demand for specific box categories will be able to secure similar or increased amounts of rough for the following year. Similarly, sightholders who displayed weak demand for certain categories may have their supplies reduced in the following year’s intention to offer (ITO).

De Beers selected 84 sightholders this week, company names of which will be published in a directory in early May. The current directory happens to list the same number of sightholders; however, new or renewed contract holders will begin to receive rough diamond supplies under a three-year contract. Of the total, 82 firms will receive supplies as part of De Beers global sightholder sales, while 20 in all will receive beneficiation supplies in Botswana, eight in South Africa and 11 in Namibia. Two companies were awarded accredited buyer status, which provides them with the opportunity to purchase rough from De Beers on an ad-hoc basis, depending on the availability of ex-plan, which is supply that is in excess of sightholders ITO.

AWDC Notes Trade Initiatives

The Antwerp World Diamond Centre (AWDC) stated that Antwerp Diamond Bank (ADB) extended the period for clients to secure a new bank by two months (until June 30). However, the AWDC noted that the banks clients must sign a contract before April 27, otherwise the original closing deadline of April 30 will be enforced. The AWDC is assisting companies with the transition.

Separately, AWDC confirmed that the Royal Decree on the Transport of Valuables, which began September 1, 2014, has been adjusted so that the unlimited and unlicensed personal transporting of diamonds by diamantaires, staff, diamond cutters and diamond dealers is again permitted.

In addition, the AWDC said the government introduced a tax system that is calculated on a lump-sum basis. Diamantaires would be taxed according to a fixed percentage of the turnover, for profit and losses, rather than on a percentage of the profit. While the introduction of this tax will mean that diamond traders will pay higher taxes than they do currently, the introduction of this tax will ensure the requisite stability and legal certainty, according to the AWDC. Ari Epstein, AWDCs CEO, said, “Because the new system is a tax on turnover instead of profit, diamond traders know precisely what to expect when they close their financial year.”

RETAIL & WHOLESALE 	  

U.S. Jewelry, Watch Sales Flat

U.S. jewelry and watch sales across all channels were basically flat, or down 0.2% year on year, at $6.188 billion in February, according to preliminary figures. Data revealed that jewelry sales were unchanged from one year ago at $5.464 billion, while sales of watches contracted 1.2% to $724 million during the month. In addition, February became the fifth consecutive month to reflect weaker sales for the sector. As expected, sales totals were revised for January; however, jewelry and watch sales still recorded a 1% year-on-year decline at $4.595 billion. Jewelry sales were down 0.7% to $4.057 billion, but sales of watches fell 2.5% to $538 million.

Chow Sang Sang FY Sales -23%

Chow Sang Sang Holdings International reported that group revenue fell 23% year on year to $2.5 billion (HKD 19.25 billion) in the fiscal year that ended on December 31. Sales were impacted by weaker consumer purchasing power, according to the jeweler. The group observed that even though there was no reduction in the number of mainland visitors to Hong Kong, sales were lower especially during the festive season as visitors spent less on high-value items. Company profit decreased 11% year on year to $139.3 million. Jewelry retail sales declined 15% to $2.2 billion, with same-store sales declining 23% in Hong Kong, but rising 20% in Mainland China.

Chow Sang Sang expects demand for higher priced items to continue to decline, so it does plan to concentrate resources on developing affordable luxury, or dailywear, products to accommodate changing consumer spending habits.

Kingolds Profit +67%

Kingold Jewelry Inc. reported that sales fell 6.9% year on year to $1.11 billion in 2014. The integrated manufacturer cited lower gold prices for the decline in revenue; however, Kingold processed 17.6% more gold product during the year. Gross profit increased to $76.3 million in 2014 compared with $47 million in 2013 and gross margin as a percentage of sales rose to 6.9% from 3.9% one year earlier. Company profit surged 67.1% to $47.3 million or 72 cents per share.

Movados 4Q Profit +40%

Movado Group reported that revenue improved 1.2% year on year to $133.9 million, based upon generally accepted accounting principles (GAAP), for the fourth quarter that included Christmas and ended on January 31. However, revenue declined 4.4% when compared with adjusted net sales during the prior year, due to the impact of a $7.8 million charge for the anticipated sales returns related Movados ESQ reallocation strategy. This year, cost of sales rose 5.6% to $66.5 million and profit jumped 35.5% to $9.9 million, while net income attributable to Movado Group increased 39.7% to $10.1 million or 40 cents per share.

DGSE Records a 4Q Profit

DGSE Companies Inc. reported that revenue fell 13% year on year to $18.1 million in the fourth quarter that ended on December 31. Nonetheless, DGSE stated that it continues to experience growth across its jewelry business, although depressed prices for precious metals market drove a lower volume of bullion and scrap categories. DGSE recorded a profit of $272,000, or 2 cents per share, compared with a loss of $405,000, or 3 cents per share, one year ago. The companys revenue for the full year fell 19% to $70.7 million; however, gross profit as a percentage of sales improved to 17.9% compared with 16.3% in 2013. DGSE recorded a loss of $4.5 million, or 37 cents per share, which was up from a loss of $2.7 million, or 22 cents per share, the previous year.

Bacall Auction 100% Sold by Lot

The Lauren Bacall collection of personal items fetched $5 million and was 100% sold by lot at Bonhams New York and Bond Street. Several jewelry pieces were included in the late actresss estate sale. An 18-karat gold, diamond, amethyst and turquoise ring that was designed by Jean Schlumberger, Bacall’s favorite designer, sold for $52,000 -- well above the high presale estimate of $9,000 -- and an 18-karat yellow gold ropework bracelet by Schlumberger sold for $50,000. A 14-karat yellow gold, long chain by Tiffany & Co. sold for $52,500 and with it, heart-shaped pendants each inscribed with a letter that spell out the words: To my own beautiful star from her proud director Ron. It was stated that the necklace was a gift to Bacall from Ron Field for her Tony Award-winning role in "Applause." Lastly, A Cartier 14-karat gold double picture frame sold for $9,375 against a presale estimate of $1,500.

Forevermark Operations Open in Surat

The De Beers Group opened its newest Forevermark diamond inscription and grading operation, the International Institute of Diamond Grading and Inscription facility, in Surat, India. The facility represents a $10 million investment by De Beers; it is the largest facility of its kind for Forevermark and it has been equipped with leading proprietary diamond technology. Primarily, this facility is where Forevermark diamonds will be selected and inscribed with a unique serial number, symbolizing the brands "promise," and it will perform grading services for Forevermark-branded diamonds. At full capacity, the facility it will be able to process $500 million worth of diamonds annually, according to De Beers.

Tiffany Launches CT60 Watch

Tiffany & Co. unveiled its new vintage-design CT60 watch collection that was inspired by New York City, made in Switzerland and is meant to pay tribute to the brands history of watchmaking. The collection includes timepieces for men and women, a chronograph and limited edition with prices ranging from about $4,000 to $16,000. Tiffany & Co. created the CT60 with pure lines, a clean aesthetic and high-quality craftsmanship. The watches are offered in stainless steel or rose gold, with the women’s line offering diamond accents.

Kenneth Cole Debuts Smartwatch

Kenneth Cole and the Geneva Watch Group launched the Kenneth Cole Connect™ Smart Watch Collection, joining the wearable technology craze. This smartwatch will be available in stores beginning April 2015. Cole said, "Wearable technology is one of the fastest growing fashion categories today and I am excited to be on the forefront of embracing this platform." The Kenneth Cole Connect assortment of mens and womens smartwatches was introduced at the Basel show and prices begin at $135. The collection features Bluetooth smart technology and offers 12 styles.

Walmart Invests in Improvements

Walmarts U.S. president, Greg Foran, visited more than 110 of the chains 4,500 national locations since August and concluded that stores need to be cleaner, better managed and stocked -- and that employees must be more engaged. Foran told investors this week that Walmart must improve its image, grow sales and market share -- all of which begins in the store. Walmart expects to invest in improving its customer experience and inventory offerings, while redesigning store layout and better integrating physical and digital channels before Christmas 2015. Walmart recorded revenue of $473 billion in 2014, with U.S. revenue up 2% to $274 billion; however, comparable-store sales contracted slightly.

Net-A-Porter to Merge With YOOX

Richemont will merge Net-A-Porter with YOOX Group in an all share deal that will take effect in September. The combined entity will be YOOX Net-A-Porter Group and incorporated in Italy, while listing on Borsa Italiana. Richemont will own a 50% share in the combined entity; however, its voting rights will be limited to 25% in order to maintain YOOX Net-A-Porter Groups independence. Federico Marchetti, the founder and CEO of YOOX, will serve as CEO of the new group, while Natalie Massenet, the founder and executive chairman of Net-A-Porter, will serve as executive chairman. The deal is subject to the YOOX shareholders approval at a meeting to be held in June 2015. YOOX Net-A-Porter Group will launch a capital increase of up to $214.8 million (EUR 200 million) to fund future growth opportunities once the transaction takes effect in September.

MINING 	  

Shore Gold Narrows Loss

Shore Gold Inc. recorded a loss of $3 million for the financial year that ended on December 31, compared with a loss of $5.6 million in 2013. Losses were primarily due to ongoing operating costs and exploration and evaluation expenditures, which exceeded interest and investment income and cash equivalents. The company is the operator of the proposed Star-Orion diamond project in Canada. The company closed a bought-deal private placement of 21.9 million flow-through common shares on December 30, for aggregate gross proceeds of $5.5 million. Shore Gold continues to seek capital, but ended the year with working capital of $6.4 million.

Stellar Narrows Loss

Stellar Diamonds reported a loss of $934,928 for the six months that ended on December 31, compared with a loss of $1.55 million one year earlier, primarily due to lower administrative costs. During the fiscal period, Stellar Diamonds began trial mining at its Baoulé kimberlite pipe in Guinea and reached the target capacity of 50 tonnes per hour. Diamond recovery was enough for the junior miner to hold its first sale recently, resulting in proceeds of $417,122 from 4,414 carats. At the Tongo kimberlite dyke-1 project in Sierra Leone, bulk sampling resulted in a diamond parcel of 1,182 carats and the program enabled Stellar Diamond to increase the projects inferred diamond resource to 1.45 million carats.

Stellar began the application process to acquire a mining license for the Tongo dyke-1 kimberlite project and hopes to fast track Tongo into production given its positive resource definition work, mining studies and financial modeling.

Catoca Appoints New CEO

Sergey Amelin, the former deputy CEO of Severalmaz, was appointed the CEO of Catoca Ltd. Mining Co. in Angola. Amelin has been a deputy CEO of Severalmaz since March 2014. Previously, he was the deputy CEO for ALROSA-AFRICA and the deputy head of ore processing department at ALROSA. Catoca conducts diamond mining operations in the Lunda Sul Province in Angola; its shareholders include ALROSA and state-owned Endiama, each with a 32.8% share, LL International Holding B.V., which is owned by China-SONAGOL and holds an 18% stake, and Odebrecht Mining Services with a 16.4% share.

Peregrine Acquires DES Botswana

Peregrine Diamonds Ltd. entered into an agreement to acquire all of the shares of Diamexstrat Botswana (DES Botswana), a private diamond exploration and development company, from Diamond Exploration Strategies (DES UK) Ltd. DES Botswanas primary assets include eight prospective diamond prospecting licenses, which cover 5,746 square kilometers and where modern diamond exploration techniques could result in kimberlite discoveries that were overlooked by previous techniques, Peregrine stated. In addition, three other areas have unresolved geophysical and kimberlitic indicator mineral anomalies with very good mineral chemistry. Many of the targets require only limited ground geophysical surveys in order to be drill ready.

Pangolin Raises $404K

Pangolin Diamonds Corp. completed a non-brokered private placement of 8,087,500 shares for $404,375. The funds will be used for drilling and sampling programs at the companys fully owned diamond projects in Botswana. Aberdeen Gould Capital Markets Ltd. arranged the placement. The shares issued under the placement are subject to a four-month and one-day hold period. The offering is subject to final acceptance of the Toronto Stock Exchanges Venture Exchange.

Rockwell Sells Tirisano

Rockwell Diamonds Inc. agreed to sell the Tirisano diamond project in the North West province of South Africa for $6.3 million to a consortium of miners. Tirisano was placed on care and maintenance in December 2012 and Rockwell subsequently brought in royalty contract miners to continue operations, resulting in average production of between 1,500 to 2,000 carats per month. Rockwells 12.5% royalty on the sale of the diamonds was applied to the care and maintenance costs of the property and a portion of the overhead. The consortium will assume debt, amounting to $3.5 million, and related environmental liabilities.

STATS 	  Israel 

1Q $Mil. %Chng.
Polished exports $1,610 -30%
Polished import $904 -12%
Net exports $706 -44%

Rough imports $827 -23%
Rough exports $694 -23%
Net imports $133 22%

Net diamond account $573 50%

USA

Feb. $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $1,748 10% $3,575 3%
Polished exports $1,785 2% $3,164 2%
Net imports ($37) $411 5%

Rough imports $15 -80% $29 -77%
Rough exports $5 -83% $17 -81%
Net imports $10 -77% $12 -70%

Net diamond account ($27) $423 -2%

ECONWATCH 	  

Diamond Industry Stock Report

Gains outnumbered declines, but Birks (-20%) and Classic Diamond (-11%) took a beating. Movado (+31%) held strong following better than expected results. Others with strong gains: Chow Tai Fook (+12%), Goenka (+16%), Ren. Jewellery (+19%), Kennady (+12%) and Mountain Province (+13%). View the detailed industry stock report.
Apr. 2 Mar. 26 Chng.
$1 = Euro 0.919 0.918 0.001
$1 = Rupee 62.08 62.84 -0.8
$1 = Israel Shekel 3.94 3.96 -0.02
$1 = Rand 11.93 11.99 -0.06
$1 = Canadian Dollar 1.26 1.25 0.01

Precious Metals
Gold $1,201.20 $1,204.10 -$2.90
Platinum $1,095.00 $1,150.00 -$55.00

Stock Indexes Chng.
BSE 28,260.14 27,457.58 802.56 2.9%
Dow Jones 17,763.24 17,678.23 85.01 0.5%
FTSE 6,833.45 6,895.33 -61.88 -0.9%
Hang Seng 25,275.64 24,497.08 778.56 3.2%
S&P 500 2,066.96 2,056.15 10.81 0.5%
Yahoo! Jewelry 1,349.31 1,343.14 6.17 0.5%

Rapaport Weekly Market Comment April 9, 2015

De Beers sight estimate was revised to $500M as buyers refused about 30% of rough diamonds offered for sale. Rough buyer price resistance is rational and healthy for the market as it protects cutter liquidity and profitability, while reducing oversupply of diamonds during period of relatively weak polished demand. Sightholders have done the right thing by refusing to overpay for rough to safeguard future allocations. Mining companies are encouraged to lower rough prices to levels that ensure reasonable manufacturer profitability and a sustainable diamond trade. THE RAPAPORT PRICE LIST WILL NOT BE PUBLISHED ON APRIL 10 DUE TO THE JEWISH HOLIDAY OF PASSOVER.

RapNet Data: Apr. 8

Diamonds 1,370,325
Value $8,228,225,963
Carats 1,274,564
Average Discount -23.05%

www.rapnet.com

The RapNet Diamond Index (RAPI) has been revised to reflect the average price of the 10 best priced diamonds in each category.
Get Current Price List | Subscribe to Rapaport | Join RapNet

RAPAPORT ANNOUNCEMENTS
April 12-15 Sun-Wed

Rapaport Single Stone Auction 

Israel

www.rapaportauctions.com

April 18-20 Sat-Mon

The Smart Jewelry Show 

Chicago, Illinois

Visit Rapaport Booth: 413
View the shows website
April 21-28 Tue-Tue

Rapaport  Buy Now Sale 

New York & Israel
Tel. 1.212.354.9100
www.rapaportauctions.com
QUOTE OF THE WEEK
Right now there is tremendous innovation in [display technology for smartwatche. Next year’s technology will be a step-change from last year’s. And, if you asked me which will dominate in five years, I couldn’t tell you which will.

David Singleton | Android Wear, Google

RETAIL & WHOLESALE 	  

Sothebys Hong Kong Jewels Sale Tops $37M

Sothebys Hong Kong sale of magnificent jewels and jadeite achieved a total of $37,202,244 (HKD 290,177,500). The top lot was a pair of diamond pendant earrings, 12.87-carat and 12.77-carat, each with a stylized surmount set with inverted pear-shaped and brilliant-cut diamonds and mounted in 18-karat white gold for $2,564,122.

A pair of jadeite bangles, each reflecting a translucent celadon tone suffused with intense emerald green color, sold for $2,177,182. Sothebys sold an 11.21-carat fine sapphire and diamond ring, flanked on each side by a shield-shaped diamond with the shank set throughout with circular-cut diamonds, for well above estimate at $2,099,794. Another top lot was a ring set with a brilliant-cut diamond weighing 10.08 carats, mounted in 18-karat white gold and selling for $1,790,242.

In addition, a Bulgari diamond necklace of ribbon scroll motif, with a pear-shaped diamond of 7.04 carats, decorated with pear-shape, brilliant-cut and baguette diamonds of 52.50 total carat weight, sold for above estimate at $1,681,899. Rounding out the top lots, Sothebys sold a pair of diamond ear studs, 6.67-carat and 6.64-carat, mounted in 18-karat white gold for $1,589,034.

India Unveils Foreign Trade Policy

The Union Minister of State for the Ministry of Commerce and Industry of India unveiled the Foreign Trade Policy that will be in effect for the next five year term, 2015 to 2020. Diamond industry experts expressed their satisfaction with the policy, concluding that it was aimed at supporting services and exports and it would boost the "Make in India" initiative, which is a cornerstone of the new government under the leadership of Prime Minister Narendra Modi.

The Gems & Jewellery Export Promotion Council (GJEPC) concluded that the policy provides the impetus to boost exports and offers a critical regulatory framework for the proposed Special Notified Zone (SNZ). The SNZ will have a taxation regime that encourages global mining companies to sell rough diamonds directly in India and once it is operating, mining companies may bring rough diamonds, on a consignment basis, to display and sell to local buyers. The new trade policy also offers a program for providing interest subvention for a period of three years and budget allocation was made available for the 2015/2016 fiscal year. According to the GJEPC, these initiatives will provide Indias diamond industry with a strong competitive advantage against other diamond trading centers, while ensuring a steady supply of rough diamonds.

Kingold Raises $15M

Kingold Jewelry Inc. entered into a convertible note purchase agreement with a majority-owned subsidiary of Fosun International Limited that will result in proceeds of $15 million when the transaction closes. The proceeds will be used to accelerate the construction of the Kingold Jewelry Cultural Industry Park, according to the firm. Kingold agreed to issue and sell a $15 million aggregate principal amount, 6% senior secured convertible note due 2018, while Fosun will have the right to convert the principal amount into shares of common stock at an initial conversion price of approximately $1.15 per share. The note is secured by a letter of credit from a bank and a personal guarantee by Kingolds chairman and CEO, Zhihong Jia.

L2 Selects Three Watch Geniuses

As the wearable device trend disrupts the traditional watch market, there is no room for brands to stumble on an omnichannel strategy, according to L2 Inc. The group measures the digital strengths and weaknesses of various segments, including watches, jewelry and luxury goods through a proprietary methodology. In the latest report, the L2 Digital IQ Index for Mass & Licensed Watches, 73 watch brands were scored for their effectiveness in ecommerce, digital marketing, social media outreach and mobile device compatibility. As is often the case with these metrics, the bottom line for brands is to exceed the best-in-class.

L2 selected only three watch brands as digital geniuses: Michael Kors, Fossil and Shinola. There were, however, 21 brands the group found to be second-best, or "gifted," including Tissot, Gucci, Swatch, TAGHeuer, Movado, Citizen, Timex and Nautica to name a few.

What were the features that made a brand a "genius" or, at least, score second place? For one, direct-to-consumer ecommerce that is simple, seamless on the backend and offers free shipping. Strong email outreach that pushes product awareness and purchases improved a brands score. Those brands that created engaging content about watches -- especially through video -- stood out as clear leaders. Finally, mobile device optimization with ecommerce, video and geolocation are imperative to becoming a digital genius, according to the study.

Omnichannel Gives Leg-up to Retailers

Millennials crowned Amazon.com as their "Customer Service Champion" in 2014, followed by Victoria’s Secret, Best Buy, Nordstrom and Macys, according to Prosper Insights & Analytics. However, when scores are collected from all age groups, the landscape changes. L.L. Bean is in first place, followed by Amazon, Lands End, Kohls, Nordstrom, HSN, J.C.Penney and Sears. Prosper concluded that strong omnichannel initiatives were key to capturing the marketshare of millennial consumers with online and mobile extensions, price matching capabilities and integrating in-store and digital shopping experiences.

"As the millennial generation ages and their spending power and influence grow, it certainly stands to reason that these retailers could continue the positive relationship they’ve established with these shoppers – a proverbial leg-up on the competition," said Pam Goodfellow, the director of Prosper Insights. However, millennials’ loyalty to brands and retailers can be fleeting so continue to expect constant disruption.

Apple Posts Video Watch Tour

Apple will be taking preorders for its new Apple Watch this week, but it has also been launching a series of very compelling product videos that show and tell how the watch works. As of April 8, three detailed videos are live -- seven more are pending -- and these simply take viewers through the devices numerous capabilities in great detail. The Apple Watch is connected so it delivers email, text and voice calls; it supports all Apple apps and Siri -- a voice-activated personal assistant, typist and navigator that is part of Apples iOS.

Alexis Bittars New Model is 93

A.T. Kearney said that consumers older than 60 represent the fastest growing group in the world, with a current population of more than 800 million it will top 2 billion by 2050. So, is your brand missing the boat with youth-obsessed campaigns? AdWeek proposed that older women are becoming the new "girls of fashion."

Jeweler Alexis Bittar created media buzz by featuring 93-year-old Iris Apfel as the face of his new campaign in January. Apfel was then featured in the spring collection for Kate Spade. Similarly, female models who are older than 60 highlight fashion for Céline, Saint Laurent, LOréal, Marc Jacobs and the Gap. AdWeek concluded that personal style and "fearlessness of growing old" are attractive and emerging themes with consumers over 60, so brands must be bold when chasing that demographic.

RJC Restructures Post-CEO

The Responsible Jewellery Council (RJC) restructured its management team and introduced the role of executive director in place of its former CEO, Ashish Deo, who left the organization. James Courage, the chairman of the board, or Charles Chaussepied, the boards vice chair, is expected to address the changes in detail during the annual general meeting on April 13 in Mumbai.

RJC stated that its chief operating officer, Catherine Sproule, will work with the executive director to provide continuity with the organizations structure. There will also be a standards director as RJC rebuilds its standards team due to recent turnover. The annual meeting will also include a standards committee meeting, a conference presented in partnership with the Bharat Diamond Bourse (BDB) and a dinner hosted by the Gem & Jewellery Export Promotion Council (GJEPC). Attendees will also visit the BDB and the SEEPZ in Surat.

Trademarks Issued to De Beers, Zale, Others

The U.S. Patent & Trademark Office (USPTO) issued the trademark "For You, Forever" to De Beers Diamond Jewellers Ltd. on March 31 with registration number 4712952. Zale Delaware, which is owned by Signet Jewelers, received the trademark "Unstoppable Love" on March 31 with registration number 4713900. The USPTO issued the trademark "The Jewelry Academy of New York" to JPK Jewelry LLC of New York on March 31 with registration number 4713154. The USPTO issued the trademark "Ignite Your Love" to I Do Diamond Ring Boutique of Sarasota, Florida on March 31 with registration number 4713538.

In the U.K., the Intellectual Property Office stated that an application has been filed for the trademark "Northern Star Canadian Diamonds" by Corona Jewellery Company of Toronto, Canada. The trademark refers to diamonds and jewelry.

Heist May be Londons Biggest

Police and forensic experts are investigating a well-planned professional burglary on safe boxes at Hatton Garden. While an exact value has yet to be determined by authorities, local diamond dealers and jewelry buyers have told the media that anywhere from $50 million to $300 million worth of goods have been stolen. Furthermore, dealers are growing increasingly impatient by the lack of information from authorities and the Hatton Garden Safe Deposit Ltd. company.

The burglars chose a four-day holiday weekend to break into the main building, disable alarms and use construction equipment to tunnel through walls, access elevator shafts and cut into security doors that led to Hatton Garden Safe Deposit. On Good Friday, it was alleged that one of the buildings alarms sounded, but a security guard who responded did not observe anything unusual and left the premises. On Tuesday morning, when dealers returned to work, the break-in was discovered.

MINING 	  

Peregrine Raises $12M

Peregrine Diamonds Ltd. raised $11.9 million on April 6 at the close of the exercise period of 56,457,618 warrants that were issued October 6, 2014. The company is focused on diamond exploration and development in Canada, where it has discovered two new diamond districts in Nunavut: Chidliak on south Baffin Island and Nanuq in the eastern Arctic region. At Chidliak, it is estimated that the CH-6 kimberlite holds an inferred mineral resource of 7.47 million carats, to 250 meters in depth, and a diamond valuation in February 2014 resulted in an average price of $213 per carat, with a modeled price range of $162 to $236 per carat.

Pangolin Secures Three New Licenses

Pangolin Diamonds Corp. was granted three additional prospecting licenses in Botswana at the companys Malatswae diamond project, which is located 90 kilometers southeast of the Orapa diamond mine. The largest license is PL529/2014 at 651 square kilometers, followed by PL085/2015 at 421 square kilometers and PL083/2015 at 359 square kilometers. All three licenses have an expiration date of March 31, 2018, are contiguous and link with Pangolins PL063/2011 license, which together with PL247/2014 now create a single block of 2,480 square kilometers. Work will begin shortly on compiling historical geological data along with geophysical interpretation of an existing airborne geophysical survey and a regional soil sampling program.

Mountain Province Closes on Loan Facility

Mountain Province Diamonds Inc. closed its $370 million loan facility for the Gahcho Kué diamond mine, with a syndicate of lenders led by Natixis S.A., Scotiabank and Nedbank Ltd., and including ING Capital LLC, Export Development Canada and the Bank of Montreal. The maximum term of the facility is seven years and the interest rate is LIBOR plus 5.5%. The loan has been in the works for the better part of a year and completes the anticipated funding requirements for Gahcho Kué through to production. All equipment and supplies have arrived at the site in preparation for construction. The overall mine development remains on schedule and within budget with first production expected in the second half of 2016, according to the company.

ECONWATCH 	  

Diamond Industry Stock Report

Little change in U.S. and Far East stocks, except for Birks (+7%), Charles & Colvard (+12%), Chow Sang Sang (+3%) and Blue Nile (-3%). Europe all higher except for Damiani (-1%). India mainly higher led by C.Mahendra (+17%). Mining shares all higher except for ALROSA (-6%), Mountain Province (-6%) and Stornoway (-2%). View the detailed industry stock report.
Apr. 8 Apr. 2 Chng.
$1 = Euro 0.927 0.919 0.008
$1 = Rupee 62.20 62.08 0.1
$1 = Israel Shekel 3.93 3.94 -0.01
$1 = Rand 11.82 11.93 -0.11
$1 = Canadian Dollar 1.25 1.26 -0.01

Precious Metals
Gold $1,202.30 $1,201.20 $1.10
Platinum $1,165.00 $1,095.00 $70.00

Stock Indexes Chng.
BSE 28,707.75 28,260.14 447.61 1.6%
Dow Jones 17,902.51 17,763.24 139.27 0.8%
FTSE 6,937.41 6,833.45 103.96 1.5%
Hang Seng 26,236.86 25,275.64 961.22 3.8%
S&P 500 2,081.90 2,066.96 14.94 0.7%
Yahoo! Jewelry 1,364.34 1,349.31 15.03 1.1%

Rapaport Weekly Market Comment April 17, 2015

Polished markets weak with very low trading volume. Polished prices relatively stable following recent corrections but dealers uncertain about the future. Miners keeping rough prices high but selling less goods. ALROSA rough prices +2% to+3% at April sale, but reportedly allows deferrals up to 40%. Dominion 4Q rough sales +3% to $241M. Belgium March polished exports -7% to $1.2B, rough imports +5% to $1.4B. Rapaport Melee Index -4% in 1Q 2015. Sotheby’s HK sells $37M (67% sold by lot). LVMH 1Q watch and jewelry revenue +19% to $765M. U.S. February specialty jewelry store sales -5% to $2.7B. Diamond community mourns the loss of Antwerp Diamond Bourse executive director Yves Diamant.

RapNet Data: Apr. 16

Diamonds 1,352,299
Value $8,196,976,162
Carats 1,273,731
Average Discount -23.45%

www.rapnet.com

The RapNet Diamond Index (RAPI) has been revised to reflect the average price of the 10 best priced diamonds in each category.

Get Current Price List | Subscribe to Rapaport | Join RapNet

RAPAPORT ANNOUNCEMENTS

Rapaport Presentation on Ethics

Martin Rapaport will present "Ethical Challenges and Opportunities in the Diamond and Jewelry Industry" during the American Gem Society Conclave on April 22 at 3:45 p.m. at the New Orleans Marriott Hotel.

Visit the conference website.

April 18-20 Sat-Mon

The Smart Jewelry Show 

Chicago, Illinois

Visit Rapaport Booth: 413
View the shows website

April 21-29 Tue-Wed

Rapaport  Melee Auction 

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

May 13-20 Wed-Wed

Rapaport Single Stone Auction 

Israel & New York

www.rapaportauctions.com

QUOTE OF THE WEEK
Natural pearls achieved very strong prices in New York, where a world record $5 million was realized for a four-strand natural colored pearl necklace. There was spirited bidding for colored pink and blue diamonds along with all of the JAR creations offered in the auction.

Rahul Kadakia | Christies

INDUSTRY 	  

Rap Melee Index -4%

The Rapaport Melee Index (RMI™) for small diamonds decreased by 4% to 124.50 during the first quarter of 2015, while the index is down 9.5% year on year. Polished prices declined as retailers were largely absent from the market and diamond trading remained slow. Jewelry retailers refrained from their usual first-quarter buying and avoided unnecessary buildup of inventory. Diamond manufacturers significantly reduced their polished production in an effort to diminish their existing inventory. Liquidity continued to be tight due to weak demand, manufacturers’ lack of profitability and the increased self-financing of rough purchases as banks restrict and reduce credit limits.

While the second quarter is a traditionally slow period, dealers are hoping that the market will stabilize as supply is reduced and shortages stimulate market demand in the coming months.

U.S. Consumers Curb Spending

U.S. specialty jewelry store sales fell 5.4% year on year to $2.72 billion in February, according to government calculations. The sales decline was much more severe than preliminary totals for jewelry and watch sales across all channels, which fell only 0.2% in February to $6.188 billion. Total jewelry and watch sales are subject to several revisions in the months ahead. During the first two months of 2015, specialty jewelry store sales have fallen 5.8% year on year to $4.673 billion.

Meanwhile, advanced estimates for U.S. retail sales in March -- excluding motor vehicles and parts -- were also disappointing, rising just 0.5% year on year to $346.7 billion. Retail trade sales were even dramatically subdued, rising 0.5%. Department store sales in March, continuing what has become a two-year long stretch of slow and steady declines, fell 2% to $12.95 billion.

RETAIL & WHOLESALE 	  

LVMHs Revenue +16%

LVMH reported that a weaker euro helped to push the sales total of watch and jewelry up 19% year on year to $765 million (EUR 723 million) in the first quarter that ended on March 31. On a constant exchange-rate basis, which LVMH defines as "organic" growth, the increase was 7%. Overall, LVMH recorded group revenue of $8.8 billion, which was up 16% on a reported basis, but when the impact of the weaker euro was removed, organic growth was 3%. The euro has fallen approximately 23% against the dollar in the past 12 months.

The watch and jewelry division experienced strong momentum during the quarter, with the success of Bulgaris new Lvcea watch for women, according to LVMH. Hublot experienced a strong start to the year, while TAG Heuer refocused on its core offering. LVMH introduced several innovations at the Basel show and announced a partnership between TAG Heuer, Google and Intel to launch a smartwatch later this year.

Michael Hills Sales +4%

Michael Hill International reported that revenue rose 3.5% year on year to $290 million (AUD 382.3 million) in the first three quarters of its financial year that ended on March 31. On a same-store basis, however, sales rose just 0.9% to $272 million. In Australia, Michael Hills largest market, revenue fell 1% to $174 million, while comparable-store sales declined 2.1%. Revenue in New Zealand rose 4.3% in local currency to $66 million and same-store sales improved 4.8%. Sales in local currency for the companys stores across Canada jumped 15.5% to $48 million, but comparable-store sales rose only 2.9%. In the U.S., the retailers smallest market, revenue increased 14.2% to $8.2 million and same-store sales rose 7.2%.

Pearl Necklace Sets Record Price

Christie’s New York sale of magnificent jewels tallied up $41,951,125 against a $40 million presale estimate and was 77% sold by lot. The top lot, a 5.29-carat fancy intense purplish pink diamond, which after a round of moderately competitive bidding, sold for $5,765,000 or $1,090,000 per carat to a dealer on the phone. Natural pearls were the stars of the day with a few of these rarities on offer, all of which sold for very strong prices, including a four-strand natural colored pearl necklace. An Asian private paid a hefty $5,093,000 for the treasure, setting a world auction record price for a natural colored pearl necklace. White diamonds sold steadily, but yellow diamonds were having a bad day as most on offer were left on the block. Overall it was a satisfying sale with solid results for collectible and rare items.

Equity Firm Buys Spence Diamonds

Private equity firm Lion Capital LLC agreed to buy retailer Spence Diamonds Ltd. of Canada for an undisclosed sum, according to the equity funds statement. Lion Capital partnered with IVEST Consumer Partners, a Vancouver-based retail investor and operator, which will bring "seasoned operating executives" George Jones and Jim Schneider to lead the jeweler. IVEST vowed to buy a minority investment in Spence Diamonds, as will the jewelers current CEO, Sean Jones, who will also remain on the board. Insiders allegedly told Fortune Magazine that the deal was valued at $125 million. The investors expect to extend the geographic reach of Spence Diamonds, according to Eric Lindberg, a partner of Lion Capital.

Rapaport: Create Ethical Added Value

Martin Rapaport, the chairman of the Rapaport Group, will present a one-hour talk titled “Ethical Challenges and Opportunities in the Diamond and Jewelry Industry” at the annual American Gem Society Conclave in New Orleans. The presentation will take place on Wednesday, April 22 at 3:45 p.m. at the New Orleans Marriot Hotel. Jewelers that ensure legitimate sourcing while honestly representing the quality of what they sell, create “ethical added value” that should be communicated to customers and incorporated into their brand.

“The jewelry trade has the opportunity and obligation to improve the lives of millions of people by ensuring the legitimacy of the products we buy. The emotional investment and social value that consumers attribute to jewelry are highly dependent upon the ethical integrity of the product. Our industry must support ethical trading policies and procedures that ensure the long-term position of jewelry as the ultimate emotional gift,” said Rapaport.

Eco-Friendly & Local Resonate With Consumers

The third annual Conscious Consumer Spending Index, which measures U.S. consumer appetite for corporate social responsibility, found that 32% of shoppers intend to spend more with socially responsible companies this year. The percentage is up from 30% in 2014 and 29% in 2013, according to Good.Must.Grow., which compiles the index. Top terms that resonate with consumers included organic, green and eco-friendly (each measuring 82%), local (79%), natural (74%) and sustainable (71%). But Good.Must.Grow. found that "local" becomes the most likely to influence a consumers purchasing decision.

Additionally, 64% of U.S. consumers believed it was important to purchase products or services from a socially responsible company and that was up four percentage points from 2013. Still, Good.Must.Grow. concluded the data revealed that of those who planned to increase their spending at socially responsible firms in 2014, only 73% followed through, whereas 76% had followed through in 2013. One reason, the group observed, is that knowledge gaps derail consumers who strive to meet their goal because 46% of shoppers admitted not knowing where to find socially responsible products and services.

The company compiled responses to the question, “Name one company or organization that is socially responsible.” Of the 20 top retailers, only three that sell jewelry made the list: Walmart ranked at number eight, Target at number 10 and Costco was number 11. But 28% of consumers failed to name even one socially responsible company, the study noted. Consumers weighed how a company treats its employees, impacts the environment and offers transparency in determining whether it is socially responsible.

Court Remands Pricing Case of 21ct. Stone

Antique dealer Thomas DePrince sued Starboard Cruise Services for breach of contract, specific performance and conversion after he had purchased a 20.64-carat, D, VVS2 emerald-cut loose diamond for $235,000 from a jewelry shop on a Holland American ship. However, the cruise line, citing a pricing mistake from its wholesaler, refunded his payment and never delivered the stone. A lower circuit court sided with Starboards defense that the actual price was $4.85 million ($235,000 per carat) and that the error met the guidelines of "unconscionability" under the "unilateral mistake" defense. DePrince appealed.

The 3rd District Court of Appeal in Miami decided that the lower court erroneously tossed the case. The judges ruled that Starboard had not demonstrated "unconscionability" nor was it entitled to judgment and found it "inexplicable" why the wholesaler, Sophia Fiori, was not a party since the sales contract didnt specify "$235,000 per carat." The case will return to the lower court for another round.

Cowie Collection Debuts at Blue Nile

Blue Nile teamed-up with wedding designer Colin Cowie to create an exclusive collection of engagement rings and fine jewelry that will be available in early May. In addition, Cowie will become a spokesperson for Blue Nile. The new collection will feature a bridal line of solitaire, halo and three-stone style engagement rings with matching bands, as well as a fine jewelry line of stud and drop earrings, pendants, necklaces and bracelets under three brand names: Eternal, Promise, Romance.

The Eternal pieces feature infinity circles to represent "love forever" and price points range from $395 to $5,400. The Promise collection builds upon Cowies signature interlocking "C" design and carries a price range of between $400 and $6,150. Lastly, Romance highlights passion with bright and bold designs and prices ranging from $1,080 to $7,800. Separately, men’s pieces mix metals, diamond accents and the infinity motif and are offered in a price range of $1,380 to $2,720.

Former Jeweler Heads to Prison

U.S. District Judge Karon O. Bowdre sentenced former jeweler Joseph Harold Gandy to three years and nine months in prison and to pay $20,000 in restitution to jewelers and forfeit $1.5 million in diamonds and jewelry to the government, in accordance with a binding plea agreement. In October, Gandy, 65, was charged with one count of money laundering for pawning property worth more than $10,000 that he obtained through wire fraud, which he committed when he submitted an insurance claim on diamonds falsely reported as stolen. Separately, Gandy also faces weapons and drug charges.

Gandy operated the Denman-Crosby Jewelry Store in Mountain Brook, Alabama, where he claimed two men robbed him at gunpoint in December 2004, for which he filed an insurance claim of approximately $2.8 million. He received a payout of $2.6 million. However, between July and November 2013, prosecutors found that Gandy enlisted a friend to market the reported stolen goods to area jewelry and pawn shops

Tiffanys Watch Ads Debut

Outdoor advertising agency JCDecaux S.A. unveiled the latest Tiffany & Co. campaign for mens watches at the Los Angeles International Airport (LAX) Tom Bradley International Terminal and it will be the exclusive digital outdoor media partner for the new timepiece collection. The media incorporates a Digital Clock Tower that provides Tiffany & Co. a four-sided digital display platform and it stands 72-feet tall in the great hall, reaching all departing travelers. The Tom Bradley terminal is home for about 30 airlines and accommodates more than 9.8 million passengers traveling to and from Europe and the Asia-Pacific region each year.

NRF Establishes Research Center

The National Retail Federation (NRF), the largest U.S. organization that represents retailers, invested several million dollars in creating a Retail Research and Analysis Center, which will serve as a hub for economic and consumer spending data and trends, and legislative and regulatory policies that affect the industry. The new division will bring together all existing research within NRF and intends to expand the range of issues in support of retailers. Ellen Davis will serve as NRF’s senior vice president of research and strategic initiatives, overseeing the new center, but will also continue to function as executive director of the NRF Foundation.

GENERAL 	  

Yves Diamant Passes Away

The Antwerp community is mourning the passing of Yves Diamant, one of two executive directors of the Beurs Voor Diamanthandel, or the Antwerp Diamond Bourse. In addition to serving on the board, Diamant founded his own company, Yves Diamant BVBA, more than 35 years ago, which developed the “www.yellow-list.com” in an effort to assist its clients rapidly complete inquiries and orders. Diamant was a fully qualified gemologist who was elected to the bourses board more than 14 years ago and he had stated that the opportunity offered a much wider view into the diamond industry.

Severalmaz Appoints New CEO

ALROSAs chief engineer, Andrey Pismenny, was appointed to the position of CEO of Severalmaz, which operates in the Arkhangelsk region. Pismenny signed a contract for a period of five years. With the current processing capacity, Severalmaz began mining at the Karpinskogo-1 pipe in addition to its existing Arkhangelskaya pipe. Severalmaz anticipates increasing diamond production to 2 million carats this year and then to more than 5 million carats from 2016 forward.

ICA Appoints Blommaert

The International Colored Gemstone Association (ICA) appointed Dirk Blommaert to the position of member services manager in a consulting capacity. Blommaerts role is designed to help better communicate ICAs services and resources to members and the larger precious colored gemstone industry. Blommaert will oversee the groups trade show pavilions, marketing and sales, the ICA International Congress, tours to gem localities, advertising and marketing; and he will act as an industry liaison, create networking opportunities and coordinate member services.

Scott Kay Appoints Sales Executives

Scott Kay appointed Bruce Lake and Cathy Marsh as regional account executives to the brands newly formed regional sales team. Lake was most recently a sales director for Forevermark and has also managed specialty and full service jewelry stores in the past. Marsh rejoins Scott Kay after stints at Tacori, David Yurman and most recently TAG Heuer.

NBF Courts Gulf Diamond Trade

National Bank of Fujairah (NBF) stated that it has hired former industry specialists from Antwerp Diamond Bank, which closed it office in Dubai, to operate a new division that focuses on the diamond industry. Initially, the bank vowed to provide short-term purchase and sales financing to established diamond businesses. The bank already has reputable relationships with jewelers and gold dealers, and developing the Gulfs diamond trade was the next logical step, according to Vikram Pradhan, NBFs head of corporate and institutional banking.

IndusInd Absorbs ABN Amro Clients

ABN Amro will transfer its diamond and jewelry activities in India to IndusInd Bank Limited once regulators approve the move. The business was being conducted under a deal with Royal Bank of Scotland in India. ABN AMRO and IndusInd Bank also agreed to enter into a partner banking agreement to continue cooperation with the diamond and jewelry sector.

Erik Jens, the CEO of diamond and jewelry clients at ABN Amro, said, "IndusInd Bank Limited is a strong and stable partner for our Indian clients. We are, therefore, pleased with today’s announcement. ABN Amro remains committed to its activities in the diamond and jewelry business and to working with IndusInd Bank on the partner bank agreement."

MINING 	  

Dominions Sales +3% to $241M

Dominion Diamond Corporation reported that its sales rose 3.2% year on year to $240.6 million in the fourth quarter that ended on January 31. Cost of sales dropped 10.9% to $179.8 million, driving up gross margin as a percentage of sales to 25.3% compared with 13.4% one year earlier. Profit rose to $3.7 million compared with a loss of $12.3 million; however, the loss attributable to shareholders was narrowed to $546,000, or 1 cent per share, compared with $7.8 million, or 9 cents per share, one year ago. Dominion attributed the consolidated loss to the foreign exchange-rate income tax impact of $29.1 million or 34 cents per share.

For the fiscal year, sales climbed 21.8% to $915.8 million, while cost of sales rose 5.3% to $685.7 million. Gross margin as a percentage of sales improved to 25.1% compared with 13.4% in the previous fiscal year. Profit totaled $72.3 million, down from $471.2 million in the previous year, which included the sale of Harry Winston. Profit attributable to shareholders, however, rose to $66.2 million, or 78 cents per share, compared with a loss of $23 million, or 27 cents per share one year earlier. Diaviks revenue was basically flat during the year at $351.6 million from the sale of 3.014 million carats at an average price of $117 per carat. Ekatis revenue jumped 41.2% to $564.2 million from the sale of 2.166 million carats at approximately $260 per carat

Petras Sales -41% to $96M

Petra Diamonds reported that revenue fell 41% year on year to $96.1 million in the third quarter that ended on March 31. The company sold 826,815 carats during the period, representing a 9% decline. Production rose 6% to 791,443 carats. The mining company lowered guidance slightly and now expects to produce 3.2 million carats in the fiscal year, down from an original estimate of 3.3 million carats.

During the quarter, the companys beneficiation partner completed cutting and polishing a 122-carat blue diamond, which yielded a 26.10-carat radiant-cut, intense fancy blue; an 11.30-carat pear-shape; a 10.30-carat radiant-cut fancy blue and a 7.00-carat cushion-cut fancy blue stone. Petra will retain a 15 percent share of the sales price of these stones once it is determined the best route to market

Gemfields Production Rises

Gemfields reported that production of emerald and beryl from the Kagem mine in Zambia jumped 175% year on year to 9.9 million carats in the third quarter that ended on March 31. An auction of predominately lower-quality rough emeralds generated revenue of $14.5 million in February. In addition, the company generated approximately $450,000 from the sale of high-quality Kariba amethysts. Ruby production from the companys Montepuez operation in Mozambique rose 27.2% to 1.4 million carats. Gemfields didnt conduct a ruby auction during the quarter but plans to hold a sale of lower-quality rough ruby and corundum in April. The company estimated that Fabergés value of sales, whether or not payment had been received on March 31, rose 64% and that operating costs were flat.

NGOs Urge Zim to Rethink Marange

The Centre for Natural Resource Governance (CNRG) and Chiadzwa Community Development Trust (CCDT) requested that all diamond mining cease in the Marange fields, pending a full independent inquiry into mining activities ahead of a planned consolidation. The groups argued that Zimbabwe loses nothing by keeping diamonds underground while it works to end pervasive secrecy, looting and smuggling.

The groups said the government should reach out to global experts to plan how best to ensure Marange diamonds are properly accounted for, produced and sold in a professional and transparent manner. In addition, there must be a geological survey conducted of the entire Marange and Chimanimani region to identify potential resource areas. Finally, the NGOs advised the government to confirm with the Kimberley Process Certification Scheme that consolidating diamond mines will not affect complian

ECONWATCH 	  

Diamond Industry Stock Report

U.S. retail all lower except for Birks (+3%), Blue Nile (+1%) and Charles & Colvard (+8%). Far East mixed, but Sarine (-25%) was lower in heavy trading. European shares higher except for Damiani (-5%), while India was little changed save C.Mahendra (+9%), Goenka (+8%) and Goldiam (-4%). Big swings for some miners: Kennady (+17%), Peregrine (+52%), Gemfields (+23%) and Petra (-10%). View the detailed industry stock report.
Apr. 16 Apr. 8 Chng.
$1 = Euro 0.928 0.927 0.001
$1 = Rupee 62.30 62.20 0.1
$1 = Israel Shekel 3.93 3.93 0.00
$1 = Rand 11.97 11.82 0.15
$1 = Canadian Dollar 1.22 1.25 -0.03

Precious Metals
Gold $1,198.90 $1,202.30 -$3.40
Platinum $1,159.00 $1,165.00 -$6.00

Stock Indexes Chng.
BSE 28,666.04 28,707.75 -41.71 -0.1%
Dow Jones 18,105.77 17,902.51 203.26 1.1%
FTSE 7,060.45 6,937.41 123.04 1.8%
Hang Seng 27,739.71 26,236.86 1,502.85 5.7%
S&P 500 2,104.99 2,081.90 23.09 1.1%
Yahoo! Jewelry 1,375.00 1,364.34 10.66 0.8%

Rapaport Weekly Market Comment April 24, 2015

Polished trading quiet with many sellers refusing low offers. Manufacturers significantly reducing production as sales volume remains low and Indian market heads for vacation. Miners increasing rough production despite weak 1Q sales. ALROSA’s 1Q production +6% to 8.4M cts., De Beers +2% to 7.7M cts., Rio Tinto’s +14% to 4.2M cts. Graff Diamonds 2014 retail sales +30% to $922M, profit +41% to $180M. Sotheby’s NY sells $65.1M (79.9% by lot) with emerald, 100.20ct., D, IF diamond achieving $22.1M ($22,459/ct.). Luk Fook 4Q same-store sales -20%. Chow Tai Fook 4Q sales -9%, gem-set jewelry same-store sales -6%. Lazare Kaplan 3Q revenue -32% to $9.8M. ALROSA appoints Andrey Zharkov as president. HRD Antwerp appoints Peter Macken as CEO.

RapNet Data: Apr. 23

Diamonds 1,441.246
Value $8,558,742,700
Carats 1,360,483
Average Discount -23.52%

www.rapnet.com

The RapNet Diamond Index (RAPI) has been revised to reflect the average price of the 10 best priced diamonds in each category.

Get Current Price List | Subscribe to Rapaport | Join RapNet

RAPAPORT ANNOUNCEMENTS
April 21-29 Tue-Wed

Rapaport  Melee Auction 

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

May 13-20 Wed-Wed

Rapaport Single Stone Auction 

Israel & New York

www.rapaportauctions.com
May 31 Sun

Rapaport Breakfast & Conference at JCK Vegas

Mandalay Bay Resort

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

10 a.m. to 11:30 a.m. | Banyan Ballroom
Rapaport Diamond Grading Conference

3 p.m to 4:30 p.m. | Banyan Ballroom
Responsible Sourcing Conference

View conference details and register. These events are free but seating is limited.

QUOTE OF THE WEEK
The recovery of a 341.90-carat, magnificent stone once again confirms the quality of diamonds contained within the Karowe resource. Timing of the sale of this exceptional stone is still to be decided.

William Lamb | Lucara Diamond Corp.

INDUSTRY 	  

ALROSA Production +6%, Names President

ALROSA’s production rose 6% year on year to 8.4 million carats in the first quarter that ended on March 31. The increase was driven by expanded production at the companys Mir underground mine, the Botuobinskaya pipe and the Arkhangelskaya and Karpinskogo-1 pipes at the Lomonosov deposit. ALROSA sold 9 million carats during the quarter, a drop of 29% year on year, including 7 million carats of gem-quality diamonds at an average price of $161 per carat and 2 million carats of industrial diamonds with an average price of only $8 per carat. The company expects that its first-quarter revenue from rough sales will reach $1.1 billion, compared with $1.5 billion reported in the first quarter of 2014.

In other news, ALROSAs supervisory board elected Andrey Vyacheslavovich Zharkov to serve as company president, with a contract period of three years. Zharkov, 42, most recently served as deputy head of state repository Gokhran and he was the chairman of the board of Directors at Kristall Production Corporation. Previously, he was the chief commercial officer at Prioksky Non-Ferrous Metals Plant; a board member of Novosibirsk Refinery Plant; a project manager at RUSAL Global Management and at En+ Management; the CEO of TsentrStroyRekonstruktsiya, and chief engineer at Norilsk Nickel. Concurrently, from 1995 to 2011, he was the head of precious metals transactions at the Bank of Russia.

The board also recommended that shareholders vote in favor of issuing $212 million (RUB 10.8 billion) in dividends for 2014, an amount per share that is on par with the previous year. ALROSA will conduct its annual general meeting on June 25.

De Beers Production +2%

De Beers Group diamond production improved 2% year on year to 7.7 million carats during the first quarter that ended on March 31. Despite the slight increase in the first three months of the year, Anglo American lowered De Beers full year production guidance to between 30 million and 32 million carats from an earlier projection of between 32 million and 34 million carats in light of weaker trading conditions. De Beers production in South Africa during the period rose 14% year on year to 1.1 million carats, due primarily to higher grades at its Venetia diamond mine. Production fell 2% at Debswana to 5.6 million carats, Namdebs production increased 7% to 462,000 carats and production in Canada rose 25% to 510,000.

Rio Tintos Production +14%

Rio Tintos diamond production grew 14% year on year to 4.155 ‎million carats in the first quarter that ended on March 31. Production at Argyle grew 31% to 3.217 ‎million carats, but even more striking, Rio Tinto registered a 77% improvement in Argyles production as compared with the previous quarter due to plant modifications to underground crushers. Rio Tinto’s 60% share of the Diavik mine in Canada reported production decreased 20% to 899,000 carats. Rio Tinto’s 78% share in the Murowa mine in Zimbabwe experienced a production decline of 42% to 40,000 carats as the company implemented a shutdown in order to reconfigure the processing plant. The company expects to produce 20 million carats in 2015.

U.S. Jewelry CPI -4%

The U.S. consumer price index (CPI) for jewelry dropped 3.5% year on year to 165.6 points in March, which was basically unchanged from February. Comparatively, the CPI for watches was basically flat, or up 0.2% year on year, to 123.23 points in March, which resulted in a new index high for the month.

Meanwhile, prices for diamonds and precious metals experienced broad declines in March. The RapNet Diamond Index (RAPI), the global benchmark for polished prices, plunged 14.4% for 1.00-carat certified diamonds, while RAPI for 0.30-carat contracted 19.8%, RAPI for 0.50-carat fell 8% and RAPI for 3.00-carat diamonds declined 14.7%. Gold prices in March came under pressure as the dollar firmed against world currencies, leaving the metal about 8% lower than one year earlier. Platinum, on the other hand, remained under tremendous pressure, falling about 18% in March and silver plunged 17% compared with March 2014.

The CPI for all consumable product categories in March was basically unchanged from one year ago at 236.12 poin

RETAIL & WHOLESALE 	  

Sothebys Sells 100.20ct. Diamond

Sotheby’s New York auctioned The Ultimate Emerald Cut Diamond, a 100.20-carat D, IF type IIa estimated at $19 million to $25 million, for $22,090,000 or $220,459 per carat to an anonymous buyer on the phone. The jewel has the distinction of being the first 100-carat plus diamond ever sold at a Sotheby’s New York auction as well as the highest per carat price of any colorless diamond sold at a New York auction. It is also the largest perfect emerald-cut diamond ever sold at any auction and it is one of only six diamonds over 100 carats to sell at auction in the past 25 years.

The sale tallied up $65,086,500 against a presale estimate of $59 million to $77 million, setting a new record for a total garnered at a Sotheby’s New York auction. The 368 lot sale was sold 79.9% by lot and 84.4% by value with 294 of the lots changing hands.

Graffs Profit +41%

Graff Diamonds told the Daily Mail that revenue reached $1 billion in 2014, led by a 30% increase in retail sales at $922 million. Profit surged 41% to $180 million. The brand observed strong demand for its jewels in the Middle and Far East. The report noted that expansion plans continue to progress, after adding three locations in 2014, it opened one store in Hong Kong this year and plans to open in Oman, Qatar and Azerbaijan.

Richemont Warns of Weaker Profit

Swiss luxury goods group Richemont anticipates that its profit will drop 36% year on year for the fiscal year that ended on March 31. The company, which will report on May 22, made an unscheduled announcement to alert investors ahead of time, explaining that the decline was a result of losses on financial instruments, including derivatives. The group operates luxury brands Cartier, Van Cleef & Arpels, Piaget, IWC and Montblanc. Last month, the group sold Net-A-Porter to YOOX in an all-stock deal. Richemont indicated that sales in the fiscal year, excluding Net-A-Porter, rose by 4% on a reported basis and by only 1% on a constant-exchange-rate basis. Richemont’s operating profit for the year was anticipated to improve 10%, however.

Lazare Kaplans Revenue -32%

Lazare Kaplan International estimated that revenue fell 31.9% year on year to $9.8 million in the third quarter that ended on February 28. Diamond sales declined 33.8% to $9.2 million, while revenue from other activity rose about 20% to $600,000. The company informed the Securities & Exchange Commission that its financial report would be late, citing the continued inability to resolve material uncertainties pertaining to the recovery of certain assets and the potential obligations under lines of credit. Lazare Kaplan reiterated its intention to file official quarterly and annual financial reports dating back to May 31, 2009, after concludes litigation with Antwerp Diamond Bank N.V. and KBC Bank N.V.

Chow Tai Fooks Sales -9%

Chow Tai Fook Jewellery Group Ltd. reported that retail sales fell 9% year on year in the fourth quarter that ended on March 31, led by a 21% decline in Hong Kong, Macau and other markets, while the drop was only 3% in Mainland China. The retailer did not provide hard totals. Same-store sales for the group fell 16%, with comparable-store sales falling 9% in Mainland China and 26% in all other markets. Gem-set jewelry sales as measured on a same-store basis fell 6% and gold product sales dropped 19%.

Chow Tai Fook opened 14 points of sale during the quarter, comprised of nine for jewelry, one of which was a standalone Hearts On Fire location, and five for watches. Chow Tai Fook operated 2,257 points of sale as of March 31.

Luk Fooks Same-Store Sales -20%

Luk Fook Holdings reported that group same-store sales dropped 20% year on year in the fourth quarter that ended on March 31. The companys same-store sales in Mainland China fell 5%, while comparable-store sales in Hong Kong and Macau plummeted 22%. Gold product same-store sales fell 21%, while gem-set jewelry same-store sales dropped 20% with gem-set jewelry comparable-store sales in Mainland China increasing 11% but in Hong Kong and Macau they dropped 22%.

The group operated 1,383 points of sale as of March 31, including 1,241 licensed stores in Mainland China and one store in Korea, 142 self-operated stores consisting of 48 self-operated stores in Hong Kong, 10 stores in Macau, 79 shops in Mainland China and five overseas.

Festival Sales Surge for SHUBH

Rajesh Exports Ltd.s retail brand SHUBH Jewellers posted record sales during the Akshaya Tritiya festival, in response to introducing several new designs, according to a filing on the Bombay Stock Exchange (BSE). The company did not provide hard totals. Rajesh Mehta, the chairman of Rajesh Exports, told investors that SHUBH has become the "largest gold jewelry retailer in South India" in part due to offering unique merchandise and, secondly, an aggressive expansion strategy. During the most recent financial period, Rajesh Exports stated that it operates without debt and has grown sales to approximately $5.5 billion annually. SHUBH Jewellers operates 83 retail outlets across India.

Gitanjali Streamlines Operations

Gitanjali Gems will consolidate its various jewelry retail subsidiaries as part of the groups effort to streamline operations, therefore reducing costs and improving cash flow. In a note to the Bombay Stock Exchange, Gitanjali confirmed the merger of Asmi Jewellery India Ltd. and Spectrum Jewellery Ltd. with Nakshatra Brands Ltd. All three entities are step-down subsidiaries of the company. Gitanjali Jewellery Retail Ltd. and Gitanjali Lifestyle will be merged with GILI India Ltd., which is also step-down subsidiary. The company explained that the consolidated business model will help unlock future value and enable synergies for sourcing, manufacturing, distribution, exporting and retailing in an efficient manner. The groups consolidation is subject to court and statutory approval.
Sandeep Diamond and IDD Strike a Deal

Sandeep Diamond Corp. merged its independent jewelry division with IDD to bring additional resources that will benefit current clients of both companies. Alok Mehta, the CEO of IDD NY, explained that Sandeep Diamond has a similar customer-centric culture, a strong bridal category and intellectual property that is unrivaled. "We look forward to welcoming their accomplished independent team of professionals and helping create even more value for our combined clients" Mehta said.

Sandeep Shah, the CEO of Sandeep Diamond, added that IDD’s consistency, service and delivering value in diamond basics are an industry benchmark, all of which will open new sources of collaboration in a changed consumer and retail landscape. "Nothing will change for our customers in terms of the people and how they are being serviced," Shah said.

GENERAL 	  

RJC Adds Civil Society Executive

The Responsible Jewellery Councils (RJC) general meeting, held in India, appointed its first executive committee member from civil society -- Estelle Levin of Estelle Levin Ltd., who was also named to co-chair the standards committee. RJC has made significant progress in India, especially over the past two years, and is fully committed to working with the trade and local institutions to fully integrate with this key market. To this end, the RJC appointed Kinjal Shah as its country head for India.

Samsung, World Jewelry Hub to Cooperate

Samsung Electronics and the World Jewelry Hub signed a memorandum of understanding, pledging to cooperate strategically on providing added value to both organizations, as well as their to respective clients and stakeholders in Panama. The two expect to create a strategic alliance in order to develop and implement projects that provide mutual commercial benefits and encourage loyalty to both brands. In addition, the two organizations agreed to develop projects that will serve local communities and expand corporate social responsibility.

Eli Izhakoff, the chairman of the World Jewelry Hub, explained that the deal was a milestone for the hub and for Latin America.

Pasch Joins Simon G., Zeghani

Simon G. Jewelry and Zeghani appointed Terry Pasch as director of sales. Pasch has more than 25 years of experience in all aspects of sales, management and training within the jewelry industry, the firms stated. He will be responsible for developing and executing on new market sales and business plans and supervise the U.S. sales teams to identify new opportunities.

HRD Appoints Macken as CEO

HRD Antwerp appointed Peter Macken as its new CEO. On June 1, Macken will begin the role on a part-time basis, concurrently with his present position as the CEO of Irmaco SA, and assume the HRD post full-time at the end of August. Macken, 53, holds an MBA from the University of Chicago and a degree in civil engineering from the University of Leuven. He is a member of the Belgian American Educational Foundation (BAEF). HRD Antwerp also appointed Yichun Wang (Wayne Wang) as the managing director of operations in China and Ravi Chhabria as managing director of operations in India.

MINING 	  

Lucara Produces 342ct. Diamond

Lucara Diamond Corp. recovered a 341.90-carat gem-quality diamond from its Karowe mine in Botswana, while processing fragmental kimberlite from the central and south lobe interface. The type IIa rough diamond shows exceptional color and clarity, according to the firm. Lucara intends to sell the diamond along with two other stones that are larger than 100 carats. Plant optimization at Karowe and construction activities are essentially completed. Tracer testing of the new XRT diamond recovery machines has been completed and already a small volume of material was processed to check how it handles material, resulting in the recovery of a 7.80-carat diamond. Lucara anticipates that the new recovery and XRT sections will be integrated into the main treatment plant before the end of April.

Gemfields Ruby Sale Achieves $16M

Gemfields plc concluded the sale of mostly lower-quality rough ruby and corundum from its Montepuez ruby deposit in Mozambique, achieving $16.1 million at an average price of $4.03 per carat. The sale was 99% sold by lot. With three ruby auctions now concluded since June, Gemfields has collected $92.9 million in revenue from its ruby operations. The recent sale was held in Jaipur, India, where Gemfields offered lower-quality material to build an understanding of the downstream market in order to optimize its long-term ruby auction format, according to the company.

Lucapa Produces 63ct. Stone

Lucapa Diamond Company Ltd. recovered an exceptional 63.05-carat, type IIa diamond from alluvial mining operations at its Lulo diamond concession in Angola. The large stone was produced from mining area 31 at Lulo, which is north of the companys diamond processing plant. The diamond is the third-largest to be recovered at Lulo, with the two largest weighing 131.40 carats and 95.45 carats, which were recovered during bulk sampling south of the processing plant.

Rockwells Production +3%

Rockwell Diamonds Inc. reported that production rose 2.6% year on year to 6,932 carats in the fourth quarter that ended on February 28. Revenue increased 7.8% to $13.1 million as the average price for goods sold jumped 22.2% to $1,544 per carat. During the fiscal year that closed on February 28, Rockwell Diamonds sold $50.8 million worth of goods at an average price of $1,345 per carat, compared with revenue of $45.2 million and an average price of $1,484 per carat in the previous fiscal year.

Stellars Baoulé Tender Achieves $195K

Stellar Diamonds realized $195,000 or an average $266 per carat from the sale of 733 gem-quality diamonds recovered from trial mining at its Baoulé project in Guinea. The diamonds formed part of larger sale of 4,414 carats. The sale included a 5.55-carat diamond that sold for $5,000 per carat and several diamonds which achieved over $1,000 per carat.

ECONWATCH 	  

Diamond Industry Stock Report

U.S. stocks little changed, except for Birks (+7%) and Blue Nile (-4%). Far East all higher, except Chow Sang Sang (-3%). European shares lower, led by LVHM (-6%) and Indian shares all down except for Lypsa (+1%) and Rajesh Exports (+14%). Mining shares mainly higher, except big declines for Peregrine (-10%) and Stellar (-9%). View the detailed industry stock report.
Apr. 24 Apr. 16 Chng.
$1 = Euro 0.923 0.928 -0.005
$1 = Rupee 63.28 62.30 1.0
$1 = Israel Shekel 3.93 3.93 0.00
$1 = Rand 12.15 11.97 0.18
$1 = Canadian Dollar 1.21 1.22 -0.01

Precious Metals
Gold $1,194.40 $1,198.90 -$4.50
Platinum $1,135.00 $1,159.00 -$24.00

Stock Indexes Chng.
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Yahoo! Jewelry 1,364.52 1,375.00 -10.48 -0.8%