Harry Winston 'Martian Pink' Diamond Sells for $17.4 Million

Photo Credit: CHRISTIE'S IMAGES LTD. 2012

The largest round fancy intense pink diamond to ever appear at auction sold for $17.4 million at Christie’s Hong Kong Magnificent Jewels sale Tuesday.

Known as the “Martian Pink,” the extremely rare 12-ct. diamond was owned by a private collector. It was purchased from Harry Winston in 1976—the same year, the United States launched its first satellite on a mission to Mars: The Viking Landers. Ronald Winston named the diamond to honor the historic event. It sold for approximately $1.5 million per carat. Its estimate was $8.4 million to $12.3 million. The diamond is mounted on a size-7, 18k gold ring.

Other significant diamonds sold at the auction include:

* A pair of brilliant-cut unmounted diamonds, weighing 10.88 and 10.88 carats, sold for $4.8 million. Both diamonds are of D color, flawless clarity, with excellent cut, polish and symmetry.

Photo Credit: CHRISTIE'S IMAGES LTD. 2012

* A three-diamond ring from JAR sold for $2.9 million. It consisted of a 10.67-carat D color, internally flawless, oval-shaped diamond at its center is flanked by two D color, internally flawless diamonds of 6.07 and 6.04 carats. The estimate was $2.5 million – $3.5 million.

Photo Credit: CHRISTIE'S IMAGES LTD. 2012

* A second large diamond with ties to Harry Winston, an 11.85-carat D VVS1 potentially flawless round brilliant-cut diamond, sold for just under $2 million, within its is estimate.

Photo Credit: CHRISTIE'S IMAGES LTD. 2012

* It was mostly diamonds that stole the show, but one other gemstone elbowed its way into being one of the top items sold Tuesday. A 6.04-carat Burmese ruby and diamond ring by Etcetera sold for $3.4 million, just within its high estimate. This no heat cushion-shaped stone possesses the most desirable “pigeon’s blood red” color.

London Exhibit Paves British History in Gold

Between Queen Elizabeth II celebrating her diamond jubilee and the upcoming Olympics, there’s a lot going on in London this summer. Here’s one more reason to pay a visit.

A new exhibition at London’s Goldsmiths’ Hall titled,“Gold: Power and Allure, 4,500 Years of Gold Treasures from Across Britain,” will open on June 1. It looks at the role this precious metal has played throughout the ages in Britain. The project showcases more than 400 gold items ranging in date from as early as 2,500 BC to the present day. All the exhibits have been loaned from distinguished institutions and private collections, both in the UK and abroad, and many have rarely been seen in public before.

The exhibition includes:

* Golden Royalty: Pieces featured in the exhibition have been loaned from Royal Collections, including a gold ring taken from the deceased finger of Queen Elizabeth I; and The Chaplet of George, Prince of Wales, created in 1901-1902. At George's own coronation, the Chaplet was worn by his son, Edward who, when King, took the chaplet with him in exile in France.

* Olympic Gold Medals: Two 24K gold medals from the 1908 London Olympics, one of only four modern Olympic games to award sold gold medals.

* The exhibit also looks to the future of gold jewelry and artistry with two pieces commissioned by the World Gold Council, a sponsor of the exhibit.

The exhibition runs till July 28. It’s open Monday through Saturday from 10 a.m. till 5 p.m.

The Goldsmiths’ Hall—at the junction of Foster Lane and Gresham Street, northeast of St. Paul’s Cathedral—is the home of the Goldsmiths’ Company, one of the “Twelve Great Livery Companies” of the City of London. It received its first royal charter in 1327 to regulate the craft or trade of the goldsmith. It is responsible for testing gold, silver, platinum and palladium.

Diamond Tiara from Maureen Swanson Could Fetch $235,000

Diamond tiara from the late Countess of Dudley, also known as the actress and dancer Maureen Swanson.

With the ongoing celebration of Queen Elizabeth’s Diamond Jubilee, it seems fitting that Christie’s London sale of Important Jewels on June 13 would focus on royal and aristocratic jewels.

A total of 368 lots include jewels from the collections of Princess Soraya Esfandiary Bakhtiary, Beatrice Countess of Granard OBE, and the late Countess of Dudley. Spanning four centuries, the sale has rare historic rings, diamonds and pearls. The roll call of signed jewels by the leading houses and designers includes: Boucheron, Cartier, Chaumet, Chopard, Graff and Van Cleef & Arpels.

One of the top pieces of the sale is an Art Deco diamond tiara by Cartier (pictured above) from the collection of the late Countess of Dudley, also known as the actress and dancer Maureen Swanson, with an estimate of £100,000 – £150,000 ($156,850 – $235,270). It is one of 17 jewels offered from the collection up for sale. The tiara is “composed of five graduated shield shaped clip brooches, each resembling the Pylon, the tapering monumental towers of ancient Egypt whose bold form inspired so much 1930s design,” Christie’s said. “Together, mounted atop the simple diamond line frame, these clips are transformed into a modern soaring geometric skyline, their design recalling both the architectural innovations of the era together with its inimitable style.”

The sale also will be led by the Cowdray Pearls, a rare natural pearl necklace, composed of a single row of thirty-eight graduated natural grey pearls, with an estimated price of £280,000 – £350,000 ($440,000 – $549,000). It is from the collection of the late Viscountess Cowdray, Lady Pearson (1860-1932).

Leading the small group of jewels formerly from the collection of Princess Soraya Esfandiary Bakhtiary is a 12.15 carat diamond circular single-stone ring (estimate: £70,000 – £100,000; $110,000 – $156,850). Another ring with notable provenance is an Edwardian sapphire and diamond ring, circa 1905, which was formerly in the collection of Beatrice Countess of Granard OBE (estimate: £30,000 – £40,000; $47,000 – $63,000).

A selection of 40 lots from Cartier, including jewels, cufflinks, watches and clocks, is a highlight of the auction. This portion of the sale is led by an Art Deco diamond and gem bracelet of Oriental inspiration, circa 1925 (estimate: £100,000 – £150,000; $156,850 – $235,270), and a pair of platinum and diamond ear pendants, composed of a graduated line of three brilliant-cut diamonds, suspending a pear-shaped diamond drop (estimate: £100,000 – £150,000; $156,850 – $235,270).

For information on all the lots offered in the sale, view the online catalog.

Wanna Rock in Sales? Read This and Learn How

This is one of a series of articles by Mónica Arias, Excellence Expert specialized in Sales & Customer Service for luxury brands based in Buenos Aires, Argentina. These articles will focus on ways that jewelry and luxury sales and marketing professionals can improve their techniques.

Dear Jewelry lovers, I am back! You may or may not have missed me, but this does not change the fact I really missed getting in touch with all of you. I will not hide myself under naive excuses for not being able to write you more often. I am, as everyone else these days, caught up in hectic agendas and endeavors … but I am also investing time and effort to improve the quality and value of my articles (OK, I accept this was a good, original try to say I am sorry!) 

Anyway, I am happy to reconnect, and having said the above, hope you will forgive my absence and find the following tools really useful in your daily routine : )

OK, time to get to work: You are already aware of the fact that I am a “question-like-kind-of- fan.” So, the first and most important step you need to address to rock in sales is to have your own, unique, personal and strategic list of questions to make. Most of them will certainly be open questions, like the ones starting with the words: “What, when, where, which, etc,” which in time will help you craft your personalized list of likes, dislikes, pros and cons about each of your customers and prospects.

But you also need to have a good deal of close-phrase questions ready because, these help many times to define a deal (they get the client´s answer easier) Do not roll your eyes please … remember I am speaking out of my own experience!

Now, you will definitely use these questions at the very end, when there has been strong reluctance from your client to say “Yes” to your proposal for more than five minutes. For example, a close question to define a sales presentation could be: “Certainly, let´s agree this piece is by far the most adequate pair of earrings to match your lovely, colorful necklace, but, most importantly, it simply highlights your beauty and show the best of your refined taste …don´t you think so?”

Or, you may say something like: “I am pretty sure your wife (lady, love, etc) will certainly adore the idea of wearing this matching piece, but what is more important, from my point of view, is the fact that you are here, taking time to choose something lovely for her as her next gift from you, and that makes all the great detail and the difference…don’t´ you agree?”

Secondly, I am going to introduce you (again!) to taking your job as joyfully as possible. You see, to work surrounded by beautiful pieces, most of them one-of-a-kind, has to make you think of the privilege of serving customers in this segment of the industry, in a moment when all seems to be falling apart. Your clients are your treasure, as they are for the company you work for, of course. But you have a double responsibility towards them, because the first contact they make with the company is through you.

What do I mean by this? Am I saying you need to suffer if you are not happy with your results … or maybe I am stating that you should be a servant and say “Yes” to all your customers to avoid confrontation? Not at all. Customers love to have a sound, intelligent word crossing with a salesperson who calmly states their point of view. I am not suggesting you need to quarrel or enter into an argument with them. I am just warning: Do not think that always saying OK to your customers (eg: when they ask for a discount, say something that looks down on any part of your presentation, speak badly about your product, etc– yes, customers can be very rude sometimes) makes you a great salesperson or will definitely drive them to the cash-register.

When you have done a good job, and have kept control of the sales process, showing empathy, being kind, understanding your clients’ needs, allowing room for their objections, discussing frankly on the price options, offering adds-on to your possible sale, it is just a matter of believing firmly in yourself to close the deal. No need to run to your manager and ask for discounts (unless this is extremely necessary or the sales is huge). Or tremble and show your fears to the customer, or even worse: to say “okay” when you know it is not okay. Sometimes, a frank dialogue to discuss your client´s point of view will open up a window through which you will see a different landscape to the possibility of closing. And the client (provided he or she is not a lunatic, of course) will greatly appreciate your point of view, even if it is completely different from theirs.

If you love selling jewelry, start enjoying going to the edge sometimes. It makes sales so much fun and rewarding. It makes your working life so much wonderful and joyful. Your bank account will be happy you do this on a consistent basis.

Mónica M. Arias
Excellence Expert: Helping you discover how to reach your next level through excellence.
contacto@monicaarias.com.ar
Copyright 2012

New Luxury Jewelry Shows Slated for This Year

Two trade show organizations are partnering to create a joint jewelry tradeshow that will appear at two locations this year.

The Select Show and Centurion Jewelry By Initiation Only have created a new partnership to jointly produce the SELECT shows, beginning with the events in Dallas at the Ritz Carlton, September 9-10, and in Connecticut at Mohegan Sun, September 23-24. The new name for the shows will be "Select by Centurion."

Both companies operate invitation-only luxury jewelry tradeshows.

The Select by Centurion shows will continue the hallmarks of the Select shows, launched in 2010, with 40-50 exclusive exhibitors, breakfasts, seminars, lunches and evening receptions. The company will be overseen by Joe Carullo and Bryan Cohen, founders of Select, and Howard Hauben, founder of Centurion. Centurion will act as day-to-day management beginning after the 2012 shows.

Montblanc Sparkles at the 2012 Cannes Film Festival

In a bit of old time movie glamor with modern action behind, actress and model, Magdalena Ghenea, is photographed wearing the "Riviera" necklace, "Etoile" full pave ring, and small Montblanc 4810 earrings. Photo credit: Olivier Borde

The luxury brand Montblanc was sparkling among the stars during the 73rd Cannes International Film Festival in southern France. Jewels from the “Collection Princesse Grace de Monaco” and TimeWalker men’s timepieces were among the most prominent Montblanc pieces worn during the 12-day festival that came to an end Sunday.

Below are photos of some of the stars wearing Montblanc collections for women and men.

Nastassya Kinski wears the Montblanc Collection Princesse Grace de Monaco limited edition necklace, earrings and bracelet. Photo credit: Olivier Borde

Adrien Brody on the red carpet wearing Montblanc cufflinks and a TimeWalker TwinFly chronograph. Photo credit: Olivier Borde

Actress Laura Weissbecker adorned in a Montblanc "Collection Princesse Grace de Monaco" tales de Roses neckalce. Photo credit: Olivier Borde

Actress Whitney Able wears the Montblanc Riviera necklace. Photo credit: Olivier Borde

Jeremy Irons shows his Montblanc Star Worldtime timepiece. Photo credit: Olivier Borde

Actor Jimmy Jean Louis looks at his Montblanc Nicolas Rieussec chronograph on the red carpet. Photo credit: Olivier Borde

 

Actress and model, Sarah Marshall adorned in “A Petitis Pas" necklace and "Amour" bracelet and fashion designer, Jean Claude Jitrois, wears a Montblanc TimeWalker. Photo credit: Olivier Borde

 

Julie Gayet, President of the Queer of Jury, actress and producer, wearing Montblanc “Collection Princesse Grace de Monaco" Pétales Entrelcés red gold earrings and bracelet. Photo credit: Olivier Borde

Jewelry and Watch Sales Kick off Christie’s ‘Luxury Week’

Christie’s New York will begin its bi-annual “Luxury Week” series of auctions with jewelry and watch sales. The four-day sale devoted to jewelry, watches, wine and 20th Century design from will be held June 12 - June 15. More than 1,000 items will be offered, with a combined week-long total expected to realize in excess of $23 million. The auctions are as follows:

New York Important Jewels: Auction June 12 at 2 p.m.; viewing, June 9-11
More than 180 items, including investment-quality diamonds, rare gemstones, and period jewels will be offered. Highlights include an array of large top-quality diamonds, with more than a dozen colorless stones rated as D, E or F, the finest color quality possible. The largest in the group is a 22.46 carat rectangular-cut E-color diamond ring by David Webb (pictured), with an estimate of $1.2 - $1.8 million. The sale also features signed jewels from vintage and modern periods, including an Art Deco diamond bracelet by Cartier circa 1930 (estimate: $200,000 - $300,000) and a selection of designs by Van Cleef & Arpels, Jean Schlumberger for Tiffany & Co., Cartier and Marina B. from the estate of Lucille E. Davison, a prominent New England philanthropist. The total sale is expected to achieve in excess of $10 million.

Important Watches: Auction June 13, 10 a.m. and 2 p.m.; viewing, June 9-12.
Comprised of nearly 300 timepieces, the sale features a selection of investment-quality Patek Philippe wristwatches. The star lots of the sale include a rare Patek Philippe reference 2523, an 18k gold world-time wristwatch with two crowns, manufactured in 1963 (pictured), with an estimate of $700,000 - $1.2 million), and a vintage Patek Philippe reference 1436, an 18k pink gold split-seconds chronograph watch manufactured in 1950 (estimate: $300,000 - $550,000). Other sale highlights include vintage and modern timepieces from Breguet, Vacheron Constantin, Rolex, Panerai, Jaeger-LeCoultre, Audemars Piguet, and Patek Phillipe that include pocket watches, dress watches and sports watches for men, jeweled wristwatches for women, and antique desk clocks.

Other auctions will be dedicated to 20th Century decorative art and design (June 14) and fine and rare wines (June 15). The e-catalogs and other information are on Christie’s website.

The Jewelry Industry is Better Prepared to Handle a Downturn

The opening day crowd during the 2011 JCK Las Vegas tradeshow held at Mandalay Bay. Photo credit: Anthony DeMarco

Not since 2009 has the global economy and the jewelry industry’s place in it been so unstable. This comes as the international jewelry industry descends on Las Vegas for a series of tradeshows beginning Monday (led by JCK Las Vegas at Mandalay Bay and The Couture Show at the Wynn Las Vegas) where retailers will purchase their inventory for the all-important holiday season. It’s one of the largest jewelry trade events on the global calendar and it will be a real test on whether the U.S. jewelry industry can withstand the latest onslaught of mixed economic news.

I think the jewelry industry will prevail. The industry itself has done little to exacerbate the fragile global economic situation. In fact, it has performed admirably during these difficult economic times—outside of the diamond industry with its mishandling of the Zimbabwe human rights issue and now diamond grading scandals at two labs. 

After the contraction of the U.S. jewelry industry in 2009, it has been posting mostly positive numbers and showing consistent, incremental growth. Unlike the banking industry, it has learned from its mistakes. The jewelry industry is not as leveraged as it was in 2008. It is doing better at using the Internet and social media instead of treating it as the enemy. Creativity has taken over as well. As the cost of materials increased, designers and manufacturers have created objects of adornment using more color, a variety of materials and high-quality craftsmanship. The jewelry industry as a whole is a smarter and more humble industry than it was prior to 2008.

However, it must get past an economic situation that is again rising to a boil led by two factors that just won’t go away: Wall Street’s reckless behavior and its defiant stance against any regulation; and the Euro crisis.

The Facebook IPO debacle managed by Morgan Stanley and JPMorgan Chase’s $2 billion-plus trading loss by taking large positions in credit default swaps show that Wall Street has learned nothing from the 2008 financial crisis that nearly took down the world economy.

Meanwhile, the end of the Euro or at least a serious contraction of the European Union now seems a possibility. Greece is on the brink of outright rejecting the monetary union and other countries are saddled with outrageous debt that member countries seem unable or unwilling to resolve. There are an endless number of theories as to what will happen if the Union disbands or shrinks, which tells me that no one really knows what will happen. But everyone in Europe seems to be scared.

The jewelry industry has its own challenges and victories, some of which were revealed this week. Among them:

* Tiffany & Co., the luxury retailer jeweler that has performed like a juggernaut throughout this recession, downgraded its outlook Thursday based on a softening of sales in the U.S. and abroad.

* Meanwhile, it’s the mid-market jewelers that are showing resiliency. Signet Jewelers, the largest specialty retail jeweler in the U.S. and U.K., whose brands include Kay and Jared, reported modest growth in the first quarter Thursday (sales up 1.4 and comps up 1.2 percent). Zale Corp., the long-struggling North American specialty retail jeweler, showed significant growth in its first quarter report Wednesday (8 percent increase in sales and comps).

* Online jewelry and diamond retailer, Blue Nile, reported a 3.6 percent first quarter increase in sales. However, lower markups led to a 9.7 percent decline in gross profits.

* The Swiss watch industry, which appeared invincible throughout the recession, is reporting that its phenomenal growth is slowing to just robust levels. Watch exports increased 9 percent in April, down from 16.1 percent for the first four months of the year, according to the Swiss Federal Customs Office.

* However, the large luxury conglomerates are still poised for strong growth throughout the world. For example, LVMH reported that its Watch & Jewellery division sales increased by 141 percent increase, year-over-year, to $826.6 million. This is misleading as LVMH acquired Italian luxury jewelry house, Bulgari, in March 2011. Excluding the Bulgari acquisition, sales increased 17 percent. Richemont, reported that jewelry and watch sales rose 32 percent for the year, with overall sales in the Americas up 26 percent.

Despite the uncertainty, I expect to see a positive environment and exciting new jewelry designs at the tradeshows. Most importantly, I anticipate business to be strong. Unlike 2008, the industry is better prepared today to meet these challenges.

Birks Honors Two Canadian Actresses

Emily Hampshire, Jean-Christophe Bedos and Sarah Gadon at Cannes.

Actresses Emily Hampshire and Sarah Gadon received the Birks Canadian Diamond award, which honors “individuals whose professional accomplishments allow Canada to shine beyond our country’s frontiers.” The inagural award was presented by Birks, the largest luxury jewelry chain in Canada, during the Cannes Film Festival in souther France.

Jean-Christophe Bedos, Birks president and CEO, presented the trophies to the actresses Thursday during Telefilm Canada’s inaugural Tribute To Canadian Talent press event and reception.

The two actresses appear in the film, Cosmopolis, a scathing critique of capitalism and the financial industry, directed by David Cronenberg. The film made its world premiere Friday at Cannes.

“Sarah and Emily’s talent can now be celebrated not only across Canada but around the planet,” Bedos said. “They are an asset to the Canadian film industry and help our country shine abroad.”

Audemars Piguet CEO Abruptly Leaves

Philippe Merk attends Royal Oak 40 Years: From Avant-Garde to Icon at Park Avenue Armory on March 21 in New York City. Photo credit: Jason Kempin/Getty Images North America

Swiss luxury watch brand, Audemars Piguet, put out a brief statement Thursday saying that its CEO, Philippe Merk, is no longer with the company. The board of directors named François-Henry Bennahmias as interim general manager. The company did not say whether it would seek a permanent replacement.

“Due to differences in company strategy, the board of directors and Mr. Philippe Merk, Chief Executive Officer, have decided to terminate their collaboration,” the company said in its statement. “The board appreciates the work accomplished these past years and wishes Mr. Merk continued success in his future endeavors.”

Bennahmias, 48, began his career at Audemars Piguet in 1996 and since 1997 he was assistant marketing and sales manager for Asia-Pacific and Europe.

In 1999 he was promoted to president and CEO of Audemars Piguet (North America Inc.) in New York.

Signet Jewelers Sales Up 1.4%; Comps Up 1.2%; Calendar Shift Affects Sales

Signet Jewelers Ltd., the largest specialty retail jeweler in the U.S. and U.K., said Thursday that sales for the first quarter increased 1.4 percent to $900 million. Same store sales for the period, ended April 28, increased 1.2 percent. The company said a calendar shift due to a late Mother’s Day adversely impacted sales by an estimated $32 million or 370 basis points.

The Bermuda-based company reported that income before taxes rose 9.1 percent to $128.5 million and diluted earnings per share increased 10.3 percent to $0.96.

“We anticipated the impact of the Mother’s Day promotional calendar shift and managed our business accordingly,” said Mike Barnes, Signet CEO. “In the second quarter to date, which benefited from the calendar shift, our same store sales, including Mother’s Day, were up strong double-digits.”

The retailer said it provided guidance in the second quarter “due to the complexity of the calendar shift.” It expects same store sales in the second quarter to high single digit range and fully diluted earnings per share are expected to range from $0.78 - $0.84 based on an estimated 84 million weighted average shares outstanding.

In the company’s U.S. division, (which generally accounts for about 80 percent of the company’s total sales) sales increased 1.8 percent to $751.5 million. Same store sales were up 1.2 percent and were impacted by 440 basis points due to the calendar shift. Signet’s brands in the U.S. include Kay and Jared jewelry stores and several regional brands.

In the UK division, sales declined 0.8 percent to $148.5 million. Same store sales were up 1.2 percent (13 weeks ended April 30, 2011: 0.2%). Signet’s brands in the U.K. include H.Samuel and Ernest Jones.

Other financial highlights for the first quarter include:

* The gross margin was $353.7 million, representing 39.3 percent of sales.

* Gross margin in the U.S. increased $5.8 million compared to the first quarter of the prior year, driven by a favorable gross merchandise margin movement of 40 basis points, leverage on store occupancy expenses and increased income from credit related fees, partially offset by an impact of $4.7 million on the U.S. net bad debt expense, due to a change in the number of credit billing cycles included in the quarter.

* Gross margin in the UK was $1.8 million lower than that of the first quarter of the prior year, primarily as a result of an unfavorable foreign currency impact and a decline in gross merchandise margin of 170 basis points attributed to the level of promotional activity and merchandise mix, which were partially offset by lower store occupancy and store operating expenses.

* Selling, general and administrative expenses were $264.5 million, or 29.4 percent of sales.

* Other operating income, net, increased to $40.2 million, or 4.5 percent of sales.

* Net operating income was $129.4 million, up $10.7 million or 9 percent.

* In the US division, net operating income was $137.7 million, up $11.5 million or 9.1 percent.

* In the UK division, net operating loss was $3 million, up $2.8 million.

Tiffany Q1 Sales Up 8%, Comps Up 4%; Downgrades Outlooks

Tiffany & Co. said Thursday worldwide net sales increased 8 percent, year-over-year, to $819 million and same store sales rose 4 percent for the first quarter of 2012. The luxury retail jeweler also downgraded its outlook for the year based on a softening of sales in the U.S. and abroad.

Net earnings in the period, ended April 30, for the New York-based company increased 1 percent to $82 million, or $0.64 per diluted share, compared with $81 million, or $0.63 per diluted share, for the same period in 2011. Net earnings in the first quarter of 2011 had been reduced by $0.04 per diluted share for nonrecurring items related to the relocation of Tiffany's New York headquarters staff. Excluding those items, net earnings in the first quarter of 2012 declined 5 percent from last year.

“In terms of our sales for the first quarter, regions outside the Americas performed generally as expected,” said Michael J. Kowalski, chairman and chief executive officer. “However, the Americas region underperformed, continuing a soft trend that began in the last quarter of 2011 and compounded by the difficult comparison to substantial sales growth in last year's first quarter. These sales results led to net earnings modestly trailing our expectations.”

Net sales by region are as follows:

* In the Americas region, sales rose 3 percent to $386 million. On a constant-exchange-rate basis, total Americas sales rose 3 percent and comparable store sales were flat (comparable branch store sales increased 1 percent and sales in the New York flagship store declined 4 percent) on top of a 17 percent increase in comparable store sales in last year's first quarter. Combined Internet and catalog sales in the Americas increased 1percent. The Americas region represents slightly less than half of worldwide sales.

* Sales in the Asia-Pacific region increased 17 percent to $195 million. On a constant-exchange-rate basis, total sales rose 16 percent, while comparable store sales rose 10 percent (on top of 26 percent comparable store sales growth in last year's first quarter) due to increased sales in most countries.

* In Japan, sales rose 15 percent to $142 million. On a constant-exchange-rate basis, total sales and comparable store sales rose 13 percent and 12 percent, respectively; comparable store sales had declined 3 percent in last year's first quarter.

* Sales in Europe increased 3 percent to $88 million. On a constant-exchange-rate basis, total sales rose 7 percent while comparable store sales were equal to the prior year (versus 15 percent comparable store sales growth in last year's first quarter) with no meaningful difference between the U.K. and overall continental Europe.

* Other sales declined 14 percent to $9 million due to lower wholesale sales of finished products to independent distributors.

“We are updating our forecast for the full year to reflect these first quarter results and to reflect lower near-term expectations,” Kowalski said. “Although we are very early into the second quarter, worldwide sales are currently increasing by a low-single-digit percentage, reflecting difficult year-over-year comparisons and decelerating rates of economic growth in many countries. In 2011, we achieved extremely strong sales growth in the second and third quarters, especially in the Americas and Asia-Pacific regions.”

The company now expects worldwide net sales (in U.S. dollars) to increase 7-8 percent, versus the previous forecast calling for 10 percent growth with its operating margin modestly below the prior year.

The company also is forecasting net earnings per diluted share in a range of $3.70 - $3.80. This compares with the previous forecast of $3.95 - $4.05 per diluted share; approximately $0.20 of the decrease is tied to a reduction in operating expectations and $0.05 is related to the additional debt incurrence. All of the annual earnings growth over 2011 is expected to occur in the fourth quarter, with net earnings in the second and third quarters expected to be below last year.

The company opened four stores in the first quarter: in Mexico City, Montreal, Salt Lake City and Wuhan, China. It now operates 251 stores (105 in the Americas, 59 in Asia-Pacific, 55 in Japan and 32 in Europe), compared with 232 stores a year ago. For the year, Tiffany plans to add 24 company-operated stores including nine in the Americas, eight in Asia-Pacific, two in Europe, and commencing operation of five stores in the United Arab Emirates.

Other financial highlights for the first quarter of 2012:

* Gross margin (gross profit as a percentage of net sales) declined to 57.3 percent in the first quarter, from 58.3 percent a year ago, due to higher product acquisition costs.

* SG&A (selling, general and administrative) expenses increased 9 percent in the first quarter. Excluding nonrecurring costs related to the relocation of Tiffany's New York headquarters staff in 2011, SG&A expenses increased 11 percent primarily due to increased labor, store occupancy and marketing costs.

* The effective income tax rate was 34.5% in the quarter, versus 35.6 percent a year ago.

* Net inventories increased 27 percent to $2.2 billion at April 30, 2012 from $1.7 billion a year ago. Finished goods inventories increased 16% year-over-year due to higher product acquisition costs, expanded product assortments and new store openings, as well as some effect from the lower-than-expected sales growth. A 44 percent increase in raw material and work-in-process inventories reflected higher product acquisition costs, expanded rough diamond sourcing and internal manufacturing.

* Capital expenditures were $44 million in the first quarter, versus $52 million a year ago.

* The company spent $46 million in the first quarter to repurchase approximately 700,000 shares at an average cost of $66.42 per share. At April 30, 2012 there was $171 million available for future repurchases under the currently authorized share repurchase plan which expires in January 2013.

* Cash and cash equivalents and short-term investments totaled $343 million at April 30, 2012, compared with $622 million a year ago. Short-term and long-term debt totaled $834 million at April 30, 2012 and represented 35% of stockholders' equity, compared with $687 million and 30% a year ago.

Last week, the company's board of directors approved a 10 percent increase in the quarterly dividend rate, marking the 11th increase in the past 10 years.

Tiffany in Stalled Buyout Talks With Elsa Peretti

Elsa Peretti by Francesco Scavullo,
originally published in
Francesco Scavullo on
Beauty in 1976.

Jewelry designer, Elsa Peretti, who has created pieces for Tiffany & Co. for nearly four decades, is attempting to end her relationship with the luxury retail jeweler, according to a U.S. Securities and Exchange Commission filing Wednesday.

Peretti’s jewelry—which specializes in relatively simple figures, such as open hearts, teardrops and rounded shapes that are striking in its execution—is among Tiffany’s most popular brands, accounting for 10 percent of the retailer’s net sales in 2009, 2010 and 2011. Peretti, 72, receives a royalty for Tiffany’s use of her property rights, the retailer said in the 8k filing. Since 1974, Tiffany has been the sole licensee for the intellectual property rights (Peretti Intellectual Property) necessary to make and sell Peretti-designed products under her trademarks.

The two sides cannot agree on a price for Tiffany to purchase the intellectual property rights of Peretti, according to the 8k report filed by Tiffany in advance of its first quarter earnings report Thursday. If an agreement can’t be reached, Peretti’s advisors told Tiffany that she’d “consider exercising her right to terminate the License Agreement.” Either party can terminate the agreement with written notice.

Elsa Peretti open heart pendant in 18k rose gold.

“If Tiffany ceases to have an exclusive license to use the Peretti Intellectual Property, … operating results may be adversely affected,” Tiffany said in the report.

In the filing, Tiffany said that it “made a firm offer to Ms. Peretti in an amount that is based upon the value of the Peretti Intellectual Property to Tiffany.”

If Peretti exercises her right to terminate the license agreement, Tiffany said it would retain all rights for six months, including the right to make Peretti-designed products, following the date of notice of termination. After the six-month period, Tiffany would have a year to sell any Peretti-designed products it has on hand or on order. Afterward, Tiffany would still be permitted to sell Peretti-designed products it has on hand, subject to Peretti’s right to purchase these remaining products.

Under the current license agreement, Peretti retains ownership of Peretti Intellectual Property and exercises approval rights in regards to promotion, display, manufacture and merchandising of Peretti-designed products. In addition, Tiffany is contractually required to devote a portion of its advertising budget to the promotion of the Peretti-designed products.

Tiffany said in its report that the separation provisions in the contract would soften the blow, at least short-term. For example, marketing and merchandising requirements to promote and sell Peretti designs could be moved to other existing products. And, Tiffany said it would be “relieved” of advertisement and royalty obligations.

But Tiffany still warns of the possibility of difficult days ahead if an agreement between the two sides can’t be reached.

“Tiffany has enjoyed significant success and profitability from its longstanding relationship with Ms. Peretti, and there can be no assurance as to whether or the extent to which such mitigation efforts would offset the results realized under the License Agreement.”

Zale Corp. Q3 Sales and Comps Up 8%

U. S. specialty jewelry retailer Zale Corp. reported a year-over-year revenue increase of 8.1 percent to $45 million for the third quarter of 2012, which includes $8.5 million resulting from a previously disclosed change in warranty revenue recognition.

Same store sales for the period rose 8 percent during the period, ended April 30. This increase follows a 15.2 percent rise in the same period last year. At constant exchange rates, which exclude the effect of translating Canadian currency denominated sales into U.S. dollars, comparable store sales increased 8.3 percent for the quarter.

The Dallas-based company owns and operates the following jewelry retail brands: Zales, Zales Outlets, Gordon’s Jewelers, Peoples, Mappins and Piercing Pagoda. By market segment, the company reported the following for the third quarter:

* U.S. Fine Jewelry brands (70 percent of revenues), consisting of Zales Jewelers, Zales Outlet and Gordon’s Jewelers, had an increase in comparable store sales of 10.9 percent. This increase follows a 15.9 percent rise in the same period last year.

* Canadian Fine Jewelry brands (17 percent of revenues), consisting of Peoples Jewellers and Mappins Jewellers, had an increase in comparable store sales of 3.8 percent. This increase follows a 21.6 period rise in the same period last year. At constant exchange rates, Canadian Fine Jewelry brands comparable store sales increased 6 percent following an increase of 15 period in the prior year period.

* Kiosk Jewelry (13 percent of revenues) comparable store sales decreased 1.1 percent. In the same period last year, Kiosk Jewelry comparable store sales rose 6.7 percent.

Gross margin on sales for the quarter was $228 million, or 51.3 percent, an increase of 10.5 percent, compared to $206 million, or 50.1 percent, in the same period last year. Selling, general and administrative expenses were $213 million, or 47.9 percent of revenues, for the period, compared to $202 million, or 49.1 percent of revenues, in the same period last year. Operating earnings for the quarter were $6 million, or 1.4 percent of revenues, compared to an operating loss of $5 million, or negative 1.3 period of revenues, in the prior year quarter.

For the quarter, income tax expense was $1 million, compared to a benefit of $4 million in the comparable quarter last year.

Net loss from continuing operations for the quarter was $4 million, or $0.14 per share, compared to a net loss from continuing operations of $10 million, or $0.31 per share, in the comparable quarter last year. The change in warranty revenue recognition improved the net loss per share from continuing operations for the third quarter of fiscal 2012 by $0.25.

Inventory at April 30, 2012 stood at $779 million, compared to $756 million in the same period last year.

“The six consecutive quarters of positive comps, coupled with continued momentum through the Mother’s Day selling period, demonstrates that the strategic initiatives we’ve undertaken are resonating with our guests,” said Theo Killion, Chief Executive Officer. “In addition, the improvement in operating earnings this quarter is another indication of the progress we are making as we accelerate towards bottom line profitability.”

Hublot Creates Watch For Usain Bolt

Usain “Lightning” Bolt, the world's fastest man, has a Swiss watch named in honor of him and featuring his image. Hublot, for whom he is an ambassador, has developed a model in close consultation with the three-time Olympic champion. The timepiece is aptly named the King Power Usain Bolt.

“It's perfectly natural to be associated with the fastest man, not just on the planet, but the fastest since the Big Bang,” said Jean-Claude Biver, Hublot chairman.

The 25-year-old Jamaican sprinter prepares to defend his titles and world records in the 100, 200 and 4-x-100 meter races at the London Olympics (July 27 - August 12). 

Bolt’s silhouette pose in an anthracite grey on a black background is located at 9 o'clock in the center of the movement's small seconds counter. The chronograph movement features a central 60-second hand and a 30-minute counter at 3 o'clock. A 12-hour chronograph counter sits at 6 o'clock and is decorated with a touch of green in a nod to the colors on the Jamaican flag. A date window at 4:30 completes the design.

The 48 mm-diameter watch, in micro-blasted ceramic, is predominantly black, with gold—Bolt's personal color and that of his lucky running shoes. The strap is made from exactly the same gold-colored synthetic leather as his shoes. This is stitched onto Hublot’s signature black rubber strap.

Graff’s IPO May Reach $1 Billion

The Graff Diamonds store on New Bond Street, London.

Arguably the most exclusive jeweler in the world, Graff Diamonds, is shopping its IPO as it prepares for a June 8 listing on the Hong Kong Stock Exchange. According to reports, the diamond jeweler to the 0.1 percent of the 1 percent is expecting to raise $1 billion, which would value the retailer, and diamond and jewelry producer at $3 to $4 billion.

The London-based firm, known for its luxury diamond jewelry and for its owner’s penchant to buy some of the world’s most expensive gemstones, is expecting to raise $25 - $37 Hong Kong dollars ($3.22 - $4.76) per share, according to reports.

Laurence Graff, Graff Diamonds founder and chairman, and Francois Graff, CEO, met potential investors Monday, according to reports.

The money raised will primarily be used for expansion of the Asian retail network, development of Graff as an "iconic brand" (isn’t it already an iconic brand?) and developing the watch business, according to reports. The company currently has a network of more 30 stores, including five in China.

Graff Diamonds said it made $623.5 million in retail sales last year compared with $454.3 million the year before. However, a total of 20 customers accounted for 40 percent of its sales for the past three years. The company is also one of the few that have a mine-to-market operation that includes sourcing its own diamonds and gemstones and making its own jewelry.

The success of the IPO will not only be based on investors belief in the strength of the company, but their assessment of the increased growth among the world’s wealthy, particularly in China.

Girard-Perregaux Gives Desmond Tutu 1966 Collection Watch

Nobel Peace Laureate Archbishop Desmond Tutu was in Los Angeles Thursday for a public conversation with author Robert V. Taylor titled, “How to be Happy, Change the World and Embrace a New Way to be Human.”

More than 500 guests attended the event at the Los Angeles County Museum of Art’s Bing Auditorium, which was followed by a private reception.

Also in attendance as an event sponsor and supporter of the Desmond Tutu Peace Foundation was Girard-Perregaux. The luxury Swiss watch brand presented Archbishop Tutu with an engraved 1966 collection watch in honor of his philanthropic accomplishments around the world.

The Desmond Tutu Peace Foundation helps people and societies create cultures of peace by developing programs that focus on young people through the use of new media and traditional methods.

Final Judges Named, Entries Deadline Extended for JNA Awards

New judges for the JNA Awards. From left: Lin Qiang, Biju Patnaik, Hidetaka Kato and Vichai Assarasakorn.

The final judges for the JNA Awards have been selected and the deadline for entries has been extended due to demand, said Jewellery News Asia, organizer of the inaugural event.

The awards, an industry-wide event that honors and recognizes excellence and achievement in the Asian jewelry trade, are open for entries until May 21. Interested parties may obtain details on the categories, rules of entry, judging criteria and judging process on the JNA Awards website.

The new members of the judging panel are: Lin Qiang, president and managing director of the Shanghai Diamond Exchange; Biju Patnaik, regional head, Asia, International Diamond & Jewellery Group, ABN AMRO Group; Hidetaka Kato, honorary dean of the Tokyo Diamond Exchange; and Vichai Assarasakorn, secretary general of The Thai Chamber of Commerce & Board of Trade of Thailand.

With the new appointments, the panel is now comprised of eight of the most recognized names in the global gemstone and jewelry industry. The new judges join Albert Cheng, managing director, World Gold Council—Far East; James Courage, CEO, Platinum Guild International UK Ltd; Matthew Runci, President and Chief Executive Officer, Jewelers of America; and Wilson Yuen, president, International Colored Gemstone Association

“To receive support from such recognized names is an encouraging sign of the guaranteed success of our inaugural event,” said Letitia Chow, founder of Jewellery News Asia and director of Business Development—Jewellery Group at UBM Asia. “The high number of entries, urging us to extend the entries' deadline to 21 May, is also a good indication of the excellent feedback received from the industry.”

The awards ceremony and gala dinner will be held on September 20 at The Ritz-Carlton, Hong Kong, during the September Hong Kong Jewellery & Gem Fair. The event, the first of its kind in Asia, is organized by Jewellery News Asia of UBM Asia in collaboration with UBM Awards.

Rio Tinto, Chow Tai Fook, Robert Wan Tahiti, Israel Diamond Institute and the Shanghai Diamond Exchange are the leading partners for the event.

Geena Davis Wears Mattoli

Oscar-winning actress Geena Davis attended the World Childhood Foundation USA Gala in New York on March 8 wearing jewelry by the Italian luxury brand, Mattioli.

The annual event, hosted by Queen Silvia and Princess Madeleine of Sweden, helps raise funds to support the foundation's work with children victim of abuse, families at risk and street children in over 16 countries around the world. Davis was the guest of honor and delivered a speech during the event.

The following day Davis wore Mattioli again, this time to a symposium by the World Childhood Foundation hosted by Queen Silvia.

The actress, who is an advocate for gender equality in the media and entertainment, founded the Geena Davis Institute on gender in media.

 

Mattioli, the Torino based jewelry brand, is known for its use of rose gold with gemstones.

Eastern China Jewelry Event Targets New Luxury Consumers

Hangzhou—the capital city and political, economic and cultural center of Zhejiang province—will host, Treasures Hangzhou, a new jewelry event in Eastern China October 24 to 26 at the Hyatt Regency Hangzhou.

The event will give the province’s jewelry consumers, private collectors and high-end jewelry retailers the opportunity to purchase jewelry, diamonds, gemstones, pearls and jadeite from international jewelry designers and manufacturers. Among these exhibitors are Hini Star Ltd, Golden Dynasty (HK) Ltd, Shenzhen Color And Diamond Jewellery Co Ltd, SYM Jewellery Co Ltd and Houlang Jewellery (Shanghai) Co Ltd.

The show is jointly organized by UBM China, the International Colored Gemstone Association and the Jewelry Jade Industry Association of Zhejiang.

Hangzhou, located about 100 miles southwest of Shanghai, is one of China’s second-tier cities whose consumer market is growing. Like in the rest of China, there are a growing number of high-end consumers in Hangzhou eager to enjoy a better lifestyle. According to the 2010-2011 World Luxury Association survey, Hangzhou ranks first among China’s second-and third-tier cities as having the highest consumption of high-end goods apart from Beijing, Shanghai and Guangzhou. A report released by Goldman Sachs showed that over the next five years, second-and third-tier cities including Hangzhou, Wenzhou and Ningbo, will account for much China’s high-end consumer market.

Nationwide, total consumption of gems and jewelry reached 70 billion Chinese yuan renminbi ($11 billion) in 2010. Of this figure, diamonds account for more than $1.1 billion, making China potentially the world’s largest diamond consumer market and the world’s second largest diamond processing country, according to the World Luxury Association. Jade also accounts for a large part of the total figure.

Treasures Hangzhou will be held concurrently with the “Liang Zhu Bei” Zhejiang Jade Carving Exhibition, also at the Hyatt Regency Hangzhou. This prominent carving art event in attracts art lovers and collectors throughout China, including high-net-worth individuals. During the Fair, a series of professional seminars will be held to give visitors the chance to enrich their knowledge of collecting and investing in high-end jewelry.