RAPAPORT...
Bracing themselves for the worst at the JCK Las Vegas Show, many attendees and exhibitors actually left pleasantly surprised. The American Gem Trade Association (AGTA) GemFair opened May 29, 2009, a day before the JCK Las Vegas show. Despite lowered expectations coupled with a Jewish holiday on the first day, it turned out to be “fairly well trafficked,” according to one exhibitor.
In a move to entice buyers to their show, AGTA offered new-member rebate incentives and colored gemstone identification services via the AGTA Gemological Testing Center (GTC) mobile lab. The onsite laboratory provided exhibitors with a fast turnaround on verifying crucial traits of their colored gems that support their value to consumers. The new- member incentives apparently paid off as well. “We welcomed 25 new members this year,” said AGTA Chief Executive Officer (CEO)Douglas Hucker, noting that “the growth came from the retail and manufacturers sector.”
Value PricingExhibitors sought to cut a path through the current economic crisis by offering value pricing on products aimed at affordability and attractive margins. Still, buyers were cautious when scouring for bargains, exotic stones or unusual cuts. Critical in their decision-making process was the ability to purchase interesting items with higher margin potential. As one merchant reflected, “We don’t know when we’ll move our inventory.”
Award-winning gem artist John Dyer, based in Edina, Minnesota, anticipated a shift in buying habits this year. Making it easier for shoppers, Dyer categorized his gems according to price. The “Baby Dyers” were between $500 and $1,000. Higher-priced tiers were also conveniently grouped together — a real timesaver for harried shoppers. For Dyer, “the show had surprisingly good traffic, about the same amount as 2008. However, the buyers were spending a little less money. We had a lot of interest with expensive, rare collector gems and in the unusual cuts and stones wholesaling under $1,000.”
JOEB Enterprises’ two 7-carat-plus Winza rubies enthralled high-end buyers who have been hampered in securing top ruby goods for their customers since the embargo on Burmese ruby and the halt to gemstone exports from Madagascar took effect. “We were just as busy this year as at previous AGTA shows,” reported company owner Edward Boehm. “We did lots more promotion prior to coming this year. I think it paid off in traffic and orders.”
The steady interest at JOEB’s booth led Boehm to send out goods directly from the show, rather than shipping goods from the firm’s Solana Beach, California, home offices after the show’s closing. Boehm also reported a surging demand for top-notch spinel and prices have risen as a result. Fine spinel around 3 carats in size was wholesaling between $1,000 to $3,000 per carat, still a great value against comparable-quality ruby, which wholesales between $10,000 to $30,000 per carat.
Colored stones were not the only item that merchants sought out with hopes of leveraging inspiration in their buy-shy customers. Pearls, in myriad forms, also served as a catalyst for sales during the current stalemate. For King’s Ransom pearl dealer Betty Sue King, of Sausalito, California, “Our big hit was Good-bye Buys (GBB), which represent older inventory and are priced at 50 percent of wholesale, 75 percent off single keystone. We have regular clients who shop here first to get the best selection of the GBB.” King found that with freshwater cultured pearls, colors both natural and dyed were enthusiastically embraced. “A corporate buyer selected classic round freshwater pearls for his clients, but was actually fascinated by the profusion of color, styles and shapes.”
JOEB’s Boehm was surprised by the upswing in interest in faceted cultured pearls, a niche item that came into vogue some years ago, only to quickly fade away. “The former Chinese faceted pearls had poor facet junctions and were not beautiful. Now, the Japanese freshwater, Tahitian and South Seas faceted cultured pearls are superior and consumers are avidly collecting them again,” Boehm observed.
Showgoers got a once-in-a-lifetime chance to view the world’s largest cut tanzanite, a spectacular 525.55-carat cushion-cut, thanks to Rare Multicolor Gems, Inc., of New York. Ram Khatoria, chief executive officer (CEO), reported continual traffic to the company’s booth to view the stone. “There are talks of showing this extraordinary gemstone on television, but proper security will be foremost in such a venture,” Khatoria said. There are also reports that the gemstone will be sent to auction in late 2009.
Colored gemstones’ easier salability and afforda-bility were shopped at Blue Moon Enterprises, Carlsbad, California. Orders were more conservative than in the past, owner Manu Nichani explained, but he went into the show with modified expectations. What did surprise him were which stones the shoppers took away from the show. Blue Moon customers eschewed “normal stones like tanzanite and ruby, and more pricey colored gems,” he found. This reflects a shift in demographics of newer retail customers, who care less about the costly gems their parents wear and instead opt for interesting and usually lower-priced colored gems that reflect their lifestyle and fashion sense. The best sellers at Blue Moon were star ruby and star sapphire, blue moonstone and rainbow moonstone.
Selling PointsColored gemstone authority Jim Fiebig, of Sell More Color, presented the seminar “Profit from Passion: Get Excited About Colored Gemstones and Pearls.” Fiebig reinforced critical selling points about gemstones and pearls in this new economy. “There has never been a better time in our history to buy color and pearls than now. The merchant has to put customers at the source,” he underscored. “That’s something TV shopping shows excel at.” Putting customers at the source is often a matter of appropriating the support material available through AGTA and International Colored Gemstone Association (ICA). All this takes more work, of course, but selling with enthusiasm and educating the consumer makes the difference in moving inventory, Fiebig said.
As everyone adjusts to the new normal, the role of colored stones within the trade has grown in importance. AGTA’s Hucker surmised, “The trend on the whole is directed to affordability, and color satisfies that both for margins and price points. Current challenges prompt shoppers to look for color clues from the fashion industry too.” By all accounts, the show reflected the times, with lower attendance and slimmer sales. But most tradespeople anticipated that going into the show. “The overall attitude was upbeat. And while buyers were cautious, sellers were pleasantly surprised by good or better-than-expected orders,” observed Hucker.
Article from the Rapaport Magazine - July 2009. To subscribe click here.