Under the current environment various companies are looking for their own ways to survive the crisis. Some of them are venturing to decrease prices for diamond jewelry. Others are trying to bolster the price level and resort to cutting operating costs.
Tiffany & Co. for instance said it would cut prices for most of its products in Japan by an average of 9 percent, according to Rapaport. The cuts come on top of those, averaging 6 percent, that the company made in its product prices during the runup to the crucial year-end shopping season in late November.
It is extremely rare for the company to reduce its product prices twice in such a short interval, company officials said.
Unlike Tiffany, Bulgari experiencing similar hardships says there will be no decrease in prices on their part.
Francesco Trapani, chief executive officer (CEO) of the Bulgari Group, said, “Also for our company, the nasty economic environment had a strong negative effect on the holiday season’s sales. It is therefore evident that this situation will be inevitably reflected in a decrease of the 2008 profits higher than the one showed at the end of the first nine months of the year. I would like to underline that, differently from what some important competitors have done, Bulgari has not reduced its selling prices and has not changed its discount policy with the final client and trade in order to protect the integrity of the brand in the long term. Considering the results of the last months and expecting a very difficult 2009, the company is further committed to be as efficient as possible by reassessing the costs and investments structure in order to defend its profitability and cash flow as much as possible.”
Love and Pride creator and diamond jewelry designer Udi Behr (specialized in LGBT jewelry) launched a new "value-driven" diamond and platinum collection called the Revolution of Love, on the website www.loveandpride.com. Behr said that the depressed economy has changed the game for designers and retailers. “We, as an industry, must start designing jewelry with our customers in mind if we want to survive in the new millennium,” he explained.
“Now we have the resources to offer our customers the highest quality and style for a fraction of what they would expect to pay," Behr said. The Revolution of Love line includes bridal and fashion jewelry for women and men at prices close to 50 percent less than other stores' prices, the company stated, citing a price comparison with Blue Nile.
Revolution of Love joins 585 platinum — an alloy of 58.5 percent platinum and 41.5 percent cobalt - with natural clarity-enhanced diamonds.
It is noteworthy that some part of the jewelry industry catering to sexual minorities will gain substantially less this year than it is usually due since the California referendum resulted in abolishment of official registration of same-sex marriages.
One of the popular themes promoted in the press by the Diamond Information Center is the investment attractiveness of diamonds. This aspect is particularly highlighted by National Jeweler.
"Historically, diamonds have been a proven asset on multiple levels, and independent jewelers are seeing this trend today," says Sally Morrison, director of the Diamond Information Center. "In extremely soft economic times, people look to very hard assets, and diamonds prove to be less volatile than pretty much anything else I can think of."
Levinson Jewelers in South Florida has seen a 100 percent increase in sales of jewelry for investment purposes, says owner Mark Levinson. He says clients like to add jewels to their investment portfolio - especially because the asset is easily transportable to the best market.
"If the euro is stronger than the dollar, you can have your diamond in pocket and take advantage of that," Levinson says. "You can't put gold or platinum or real estate in your pocket. But you can put millions of dollars of diamonds in your pocket. In that way, it is discreet--it's not like a piece of real estate you have to register. Plus, it's an investment category that is fun and exciting. If you own a stock, you get a certificate. With a beautiful diamond, you can wear and enjoy and have fun with it."
B.W. David Leavitt, owner of Antique and Estate Jewelry in Rancho Santa Fe, Calif., says business has been booming among his high-end customers who are scooping up significant investment jewels.
"All of the biggest diamonds I've ever sold have been to men who buy as investments to hoard," Leavitt says. "If it's over 20 carats, it's for an investment. They don't let their wives wear it - even if it is in a ring. Today, there is more interest in that than in the past. People understand that diamonds are a good investment, and they're hedging against inflation."
Leavitt says his customers are also interested in rubies and sapphires from Myanmar, a country that is the subject of a gemstone embargo. High-quality Burmese stone supplies are increasingly rare and, therefore, increasingly valuable. Leavitt also does swift trade in certified stones.
Morrison, Leavitt and Levinson all attribute this trend to an increasingly sophisticated clientele who are better educated about both finance and jewelry than ever before.
"In the 1987 stock crash, everyone stopped buying jewelry," Leavitt says. "People were just blindsided. But now people are more world-savvy and are looking for other ways to invest."
Leavitt says his very wealthy customers are also buying jewelry simply for the sake of buying jewelry.
"I was worried after the market crashed that we would die this season," he says. "But I've done my best year ever. My clients have lost craploads of money, but they still want a Christmas present."
