Pity the poor jewellers of this world, Vanessa Friedman writes at http://blogs.ft.com. Speaking at the India International Jewellery show, a four-day B2B event in one of the world’s most important gold jewellery markets, David Lamb, managing director for jewellery at the World Gold Council, said the WGC expected gold increasingly to “be treated as a jewel in its own right.”
Compared to gold, by comparison, gems are suddenly more affordable; as a result, jewellery has become more stone-focused. Marie-Helene de Taillac, a French jeweler with stores in Paris and Tokyo who works out of the Gem Palace in Jaipur, said last year that she had started working with less gold and more colored gems in order to keep her prices at par; she has also embraced rock crystal and other alternative materials.
CEO of Bulgari Francesco Trapani noted this year: “We are focusing more than in the past on the combination of different materials. This is an interesting way to introduce something more appealing, more exciting to the final client - a way of proposing things that can be less expensive”.
The WGC’s Mr Lamb said he thought “rising demand levels for gold debunk the myth that consumption is falling in an higher price environment”. My guess is we will see further market divisions, with eastern consumers, who have always viewed gold jewellery as an investment, willing to continue buying, and western buyers looking for more creative solutions, Friedman says. Indeed, in a recent meeting with the Sotheby’s diamonds folk, I was told they could not keep up with demand for 10 carat stones. When I asked why (the number seemed sort of surprising) I was told “10 carats is investment grade.”
We seem to be reaching a crunch time, the author notes. Diamonds or gold: which is the better long-term accessory investment?
According to www.jingdaily.com, the Chinese market research firm Huicong D&B released its annual R.CHC (Chinese High-End Consumers) report on trends currently shaping the Chinese luxury market. Huicong also presented a brief overview of company’s findings in a presentation entitled, “10 things you might do not know about the China luxury market.”
The annual income of Chinese luxury consumers increased 11 percent over the last year.
Luxury consumers are becoming more discriminating and have moved on to a second phase of high-end consumption, in which their purchases are motivated by a desire to improve quality of life rather than simply show off.
Expenditure on jewelry and accessories currently accounts for 20.5 percent of total luxury consumption in China.
As of this year, 51 percent of respondents chose Hong Kong as their preferred city for purchasing luxury goods, followed by major cities like Beijing, Shanghai and Guangzhou.
The Chinese government of Chengdu, a second-tier city in south-west China, spearheads infrastructure projects such as massive railway development, that will promotes luxury consumption. The ostentatious signs are Louis Vuitton and Cartier in its downtown.
Online shopping finally catching on, 67 percent of regular luxury consumers cite online shopping as their primary motive for Internet use. The importance of the Internet and print media for brand awareness and high-end consumer education has increased over the past year. Luxury consumers trust television commercials, print media and the Internet more than radio.
While respondents know how to spend money, they also know how to save and invest it. 32.8 percent of respondents invest a significant amount of their savings in stocks and funds. Huicong finds that gold is also becoming more popular among luxury consumers, accounting for around 20 percent of their total investments.
Huicong finds that the three top deciding factors that drive luxury consumption are brand (with 79.2 percent saying it’s important), style (68.6 percent), and after-sales service (30 percent).
With parts of the world still battling economic woes, the demand for luxury goods is still very much par for the course for Korean consumers, says www.moluxury.com.au, pointing out that sales of Louis Vuitton, Chanel, Hermes, Prada and Gucci in Korea jumped 17 per cent compared with the last year.
Poland market and demand
KPMG has recently released a report on the Polish luxury market, saying its customers are getting richer at a fast rate and well aware of major luxury brands. They are willing to spend a substantial proportion of their income on items with a high price tag. During the past 10 years the number of affluent and rich Poles, i.e. those earning over EU 1,775 a month, has more than doubled, about 590,000 people. This group includes approximately 50,000 of the most affluent Poles, with liquid assets exceeding USD 1 million. This year, Poles may spend up to EU 6.75 billion on luxury goods, potentially raising this figure by up to a half within the next 2–3 years. Most clearly, many customers treated the purchase of jewellery as a good investment for uncertain times. Versace and Hugo Boss enjoy the highest awareness among luxury clothing brands in Poland.
Luxury leader
Luxury giant Louis Vuitton has spent the last several years in China ramping up its inland expansion and rethinking its strategy in top-tier cities “at least 25 times more,” the company says in its statement, according to www.jingdaily.com.
Last month, Louis Vuitton’s “big store strategy” became more apparent than ever, as the luxury giant opened its largest-ever store in China, an 1,800 square meter behemoth at Guangzhou’s Taikoo Hui Mall.
LVMH is also making significant progress and in the Indian market by acquiring stakes in local stores.
L Capital Asia, the private equity arm of the world's largest luxury conglomerate LVMH Group and Groupe Arnault, has been making significant advances in India, first with acquiring a stake in leading jeweller Gitanjali Gems and recently with the acquisition of a 25.5% stake in Genesis Luxury Fashion.
Watch brands
The price of gold reaching record levels, already higher than platinum and the ever increasing strength of the Swiss Franc are having a direct negative impact on the performance of Swiss luxury watch companies. Some have already increased prices several times in 2011, with 10 to 15% and are considering further increases this year. If the price of gold, raw material for luxury watches, continues to grow many companies will be forced to accept smaller margins. Speaking to WWD, the CEO of Hublot, Jean-Claude Biver ''I can't adjust my prices from one day to another. I must adjust progressively, step by step - but before I have made a full adjustment, I will have lost some margins”.
Patek Phillippe is among the top luxury watch brand which have already made two price adjustments this year, 10% in February and 7.5% in July. The company's CEO of its US subsidiary said his company which is family owned is very cautious about making a third increase.
According to www.sfgate.com, Girard-Perregaux, the 220-year-old Swiss watch brand controlled by PPR SA, wants to expand in the U.S. and South America as it aims to reduce its reliance on China.
Girard-Perregaux expects shipments to rise 12 percent this year, about the same pace as in 2010.
“My impression is that Europeans, even if they have money, maybe today are focusing on other kinds of spending” such as travel, said Stefano Macaluso, managing director of Girard-Perregaux. “We need to balance our business in other countries.”
Girard-Perregaux produces about 12,000 timepieces a year, ranging in price from 7,000 Swiss francs to more than 1.1 million francs. Its best-selling haute horlogerie model is a Tourbillon with three gold bridges with estimated price 144,000 francs.
Jewellery Brands
Leader in creating, producing and distributing high-end jewelry and design in Italy and abroad Damiani S.p.A., approved the Interim Report for the half year’2011. The revenues of Damiani increased on average by about 39%. Wholesale foreign sales have registered a good performance and also the domestic market, which in the recent past had shown signs of weakness, showed double-digit growth through both mentioned that good performance shop signs of recovery in wholesale.
Gucci opened its first mono-brand boutique with surface of 200 sqm in the capital of Italy's Lombardy region, in the historical city centre of Varese, on Via Cairo.
Bogue-Art is the new wager of the Boghossian family to create jewelry pieces representing "the art of jewelry." The fashion house, based in Geneva, since 1980, excites the most exclusive clientele all over the world.
A dream of his creations, contrasting colors and materials, along with an innovative technique, which allows you to embed a gem inside another, then further carved and decorated, were the weapons to seduce the guests attending the event, which was held in Porto Cervo in Sardinia.
Beautiful young Russian sisters Sonia and Katia Gaydamak have launched a line of unique and decadent fine jewelry collection, Prive Jewellery, which includes a hand bracelet collection. Instead of encircling your wrist, the unique hand bracelet is worn at palm level. The entire collection is inspired by the elegance of yesteryear from famous creator Cartier 1940s.
The elegant bracelets are available in white gold, yellow gold, black rhodium and paved with the choice of rubies and white, brown or black diamonds, retail price between $6,000 and $22,000.
New records
A new price record was set last month at a Sotheby's auction held in Geneva for a rare pink diamond, The Ponk Graff, 24.78 carats in size, noted for its unique chatoyancy. The buyer is Laurence Graff, dubbed by the Forbes Magazine as the "King of Bling," who paid $46.2 million to have this stone. The Sotheby's auction will go down in history having earned $105 million.
A gold pendant of Tipu Sultan, the Indian king of the 18th century, will be auctioned on September 28 at Bonhams in London. Known as the "Tiger of Mysore", the king was one of the richest men of that time. The history books will remember his opposition to the extension of British rule in the land of Maharajas, contrasted with a stubborn determination to death. The relic, which could recover up to 120 000 pounds, sports a 38 carat emerald surrounded by precious trimmings, such as topaz, blue sapphires, rubies, diamonds and pearls.
New technology
The AnchorCert Gemstone Certification Service has introduced a Gemstone Carat Weight Estimator App for smart phones. The modern tool has been created to help jewellers, valuers and jewelry lovers to estimate gemstones. The program can easily calculate the estimated carat weight of diamonds and gemstones, as well as measurement of the length, width and depth of the gemstone. The App contains detailed information about each individual gemstone including its Specific Gravity, Mohs Hardness and Refractive Index. A free demo version currently available for Android phones shows how easy the app is to use and provides full functionality. The full version will be released shortly and can be downloaded for around $20 from the Android Market and the Apps for iPhone store.
In the jewellery fantasy world
The DKNY brand has created fragrance for one million dollars. A really unique perfume bottle in yellow gold, on which stands the profile of the New York skyline, created by designer Martin Katz. The precious perfume with more than 1500 hours of work using 2,909 precious stones after completing a promotional tour around the world will be sold and all proceeds will go to humanitarian association Action Against Hunger, which is fighting for the hungry in the world.
The most expensive vodka in the world, “Billionaire Vodka,” costs $ 3.7 million per bottle. The bottle containing five liters of liquor and encrusted with three thousand diamonds atop a fake fur collar was created by designer Leon Verres, a member of PETA, an association fighting for animal rights. This simple piece of uniqueness will soon be available for lovers of luxury in a few selected localities.
Veronica Novoselova, Rough&Polished correspondent in Italy
