More than 35 years ago, Leibish Polnauer entered the industry, trading in fancy cut diamonds but soon the love for color drew him into the fancy colored diamond sector.
The mid 90s saw him develop his first online website and he eventually became one of the leading online dealers of fancy colored diamonds and jewelry. A visionary leader, Leibish now steers the company in his inimitable way with his children responsible for key sections of the business.
Always striving to increase the business, the Polnauer family also began expanding into gemstones in order to be able to offer more color to their wide range of customers.
In an interview with Rough&Polished, Leibish Polnauer reminisces about his early days in the industry; remains ‘hands on’ about the current issues related to the diamond industry.
Some excerpts:
Starting from the beginning, let’s hear your story. How, where and when did you enter the diamond business? And how has the journey been, in terms of contentment and satisfaction?
I have been in the diamond business for roughly 39 years. I began as a polisher in 1977, and worked my way through until I was managing a factory where we were polishing melees. When I went off onto my own, we started dealing with fancy shapes, and eventually moved into fancy colored diamonds.
Can you walk us through your company Leibish & Co. and its activities for the benefit of our readers?
We were a small family business, and over time became a tight-knit company. We currently employ about 40 people throughout the different offices we have around the world.
The company deals with fancy color diamonds, gemstones, and fine jewelry pieces created with both the diamonds and precious stones. Our jewelry is manufactured in house from start to finish. We sell our goods to both B2B and B2C (retail/wholesale) at roughly a 50% division between the two. Although some sales are done from within the diamond exchange, the majority of our business is online at www.leibish.com. The website is available in English, German, and Chinese.
Are you in trading as well as manufacturing diamonds/jewellery?
The vast majority of stones we purchase are already polished, but we often improve the cut in order to perfect the stones. We then manufacture our own jewelry in house, in our factory.
What colored diamonds does Leibish deal in, and from where do you source your diamonds?
We deal with a wide assortment of color, but focus primarily on Argyle Pinks from Australia and yellow diamonds. We only work with better goods, all of the finest colors and excellent quality. What that means is, for example, although you can find an I1 stone on our site, it will only be added to our collection in order to be sold if it is an excellent stone that excels in its own category.
Popularity of natural fancy colored diamonds continues to grow not only in the East, but even in other parts of the world. What is your forecast for coloured diamonds’ future in terms of demand in comparison to white diamonds?
Take a look at the following link - http://bit.ly/298znb0. It is a magnificent piece of jewelry set with a pear-shaped fancy intense blue diamond weighing 3.13 carats, which sold in the year 2000 for $512,000.
This 3.13ct Fancy Intense Blue diamond, with a VS1 clarity, sold then at Christie's for $170,000/ct. A stone like that today is worth about $850,000/ct. Fine goods like these outperform almost every other commodity in the market, and will continue to do so in the future.
As a dealer in colored diamonds since long, please tell us how the demand pattern changed over the years; and which countries have shown enough promise/potential to grow in color diamond consumption?
Each year, more and more people are introduced to these amazing stones that they were unaware of until now. As awareness is increased the sales grow as well.
Almost every time there is a major colored diamond sale at auction, we get calls on those specific colors.
Besides shown fluctuations over the years, color diamonds prices have been an enigma, mostly depending on demand and supply. How does a buyer know he is not being short-changed? Any price list available that one can follow? Your suggestions please.
Two fancy intense yellow diamonds of similar qualities can look astonishingly different from one another. Fancy colored diamonds are not at all like white goods, as each one is a world of its own. There are no price lists for colored stones as it just wouldn't work.
There are two ways a buyer can know they will not be short-changed. One is with education, which is why we promote hundreds of articles on our website. The other way is finding a dealer they can trust. With the development of the web today, one can compare goods to get an idea, but there is a good reason we have such a high percentage of returning customers. If they received a good deal, with good service, from a company they could trust, there just isn't any point to take a risk by someone else.
Regular white diamonds are now being looked at as an investment vehicle. Also, the price of fancy colored diamonds has been on the rise globally. Where do colored diamonds stand in terms of being investment vehicle? Are investors now looking at colored diamonds to invest?
Investors have been looking at colored diamonds as investment vehicles for quite some time now. As an alternative investment, if they are able to hold onto it for a minimum of 5-10 years, nothing beats the potential gain. However, it is a mistake to assume every stone is a good investment. People absolutely must do research and speak to someone they can trust. My sales team will explain exactly which stones would be a worthwhile investment, and why.
Apparently, the western countries are slow in showing interest in colored diamonds unlike the savvy Asians who are major investors in colored diamonds. According to you, what could be the reason? Again, is it the high price; or liquidity problems; or just that ‘color’ is not their thing? It is said that investors are not very keen on colored diamonds as they are difficult to sell, as the premium prices are sensitive to market demand. Instead, white diamonds are preferred as they are easier to liquidate when necessary. Your take?
Just have a look at the results of the largest auction houses in the world. The highest prices are always paid for fancy colored diamonds. There is no two ways about it. Color is king!
It's true, you will not be able to sell the stone at the click of a mouse like gold. My customers come back to me because I have developed a large database of buyers. It may take time, but the potential gain is so much stronger, that those who can afford the wait, should look into the world of color.
Transparency is the key today in all businesses, more so in diamonds. Is there anything you’re doing differently than other companies to increase/ensure transparency? Besides, selling ‘certified’ stones, what is your USP? In short, what is the secret behind your success?
Honestly, integrity, and excellent service.
As high-end jewellery manufacturers as well, what is your company’s client profile in general? I would imagine jewellery connoisseurs but hard core investors may be fewer in numbers. Your thoughts?
You are right. We have a 70% returning customer rate and 99% customer satisfaction.
What colored diamonds are in high demand currently? And which color loose stones as well as studded in jewellery will you recommend for a new investor, who wants to make some profit now that popularity of colored diamonds is picking up?
Buy the best only in pinks and blues or vivid yellows of the finest clarities and excellent colors.
In the future, the environment conscious and rights-sensitive millennials may prefer to avoid the mined gems altogether and go in for lab-grown diamonds. You think lab-grown diamonds are a threat to natural diamonds? Also, artificially colored diamonds / treated diamonds have been making the rounds. Will all this adversely affect natural diamond business on the whole? Please comment.
I expressed my view on this matter widely and loudly. Women want the real thing. Real diamonds not lab-grown synthetic goods. Something that is grown in a lab, heated, or treated will not retain value - http://www.leibish.com/pure-hypocrisy-article-1297 .
Since the ’90s, colored diamonds have shown immense inflation in jewellery prices. Will this trend continue down the road? Say, in 5 years from now, where do you see demand increase for colored diamonds/jewellery?
I am not a sage, but I am optimistic. The trend will continue further in a positive direction. For the best goods, the sky is the limit.
Aruna Gaitonde, Editor-in-Chief of Asian Bureau, Rough & Polished
