ICA Ambassador to France Report, Las Vegas Fair Results, How Millennials are Changing the Luxury Market

ICA Newsletter - July 2019

Pascale Savigny

Report by Pascale Savigny

ICA Ambassador to France

Following a rather complicated period tainted by terrorism and fear, French gems and jewelry production is again increasing significantly. With a growth of 12%, 2018 was a good year. Jewelry production growth reflects dynamism and solid competitiveness at the international level.

The end of 2018, however, was disrupted by the gloomy climate and the “yellow vest” movement. A significant loss was registered and economic growth slowed down noticeably after the latest and gradual recovery.

The French gems and jewelry market is experiencing a rapid rise in distant sales as more and more new tools of communication and marketing, placed on social media, contribute to the growth and consolidation of the new “digital jewelry market.” There is also a growing demand for traceability, which is now seen as a more sustainable and thoughtful consumption attitude by the end consumer. Clients want to know a more detailed origin of the products they are buying with minimum assurance. Centering on the ecological and social environments, more and more questions are being asked about how and by whom their jewelry has been produced and reached the market.

Therefore, increasing numbers of companies have begun to engage in an ethical approach that echoes these demanding new millennial consumers.

Synthetic diamonds have also been much in the news in France. Business volume of synthetic diamonds is still low, but they are being received with mixed—and even negative—feelings from the trade, which sees the risk of a trend for synthetics that could move into colored gemstones.

The French Gemlab (Laboratoire Francais de Gemmologie, LFG) has recently announced that it will not grade or certify synthetic diamonds. The LFG is part of the BJOP, the French National Gems and Jewelry Trade Association that regroups all the actors in the industry, from gem cutters and dealers to jewelry manufacturers and luxury brands. The BJOP also has training programs for jewelers and craftspeople through the HEJ High Jewelry School on the Rue du Louvre in Paris. The organization has created, with the LFG lab, a high quality gemological school, which is rapidly gaining a good reputation.

The French market is still very conservative when it comes to colored gemstones, concentrating mostly on the traditional Big Three , i.e. Emerald Ruby and Sapphire. There is very little awareness and knowledge of other colored gems and thus a limited demand.

Having said that, however, high jewelry creations by the global luxury brands regularly include other colored gemstones in their international collections. The latest trend is the use of red and cobalt blue spinel.

In conclusion, the French colored gemstone and jewelry sector is gradually adapting to market challenges, but new customers are demanding more urgent changes.

I am pleased to announce that ICA members in France will be invited to get together in early September as part of the ICA Ambassador’s activities in the nation.

*** Las Vegas Jewelry Week: Creative color, mixed sales

There seemed to be a lot of enthusiasm for this year's Jewelry Week as the large JCK show moved to the renovated Sands Expo Convention Center in Las Vegas. The re-location was received positively by retailers who appreciated finally being in proximity to the high-end Couture Show at the Wynn Hotel across the street, and closer to the Las Vegas Convention Center, which housed three other shows. By mid-show, however, this enthusiasm had collided with the reality that the show locations were not the only changes. Lighter foot traffic and mixed business resulted in a generally viewed "slow" week. One section that really felt the pinch was the new Global Gemstone area, a victim of poor signage and apparent lack of prior-show marketing. Read More

*** The International Gemmological Conference (IGC) will be in Nantes

From August 28 to 31, 2019, the IGC will be held in the French city of Nantes. This international gemology conference is the oldest recurring of its kind, as it comes to its 36th edition. It alternates every other year between a gem-producing and a gem-consuming country. Since its very foundation, this conference was deliberately by-invitation-only, with a very limited number of participants per country. To give an opportunity for non-IGC French and English-speaking gemologists to benefit from the foremost gemologists in the world coming to Nantes, a special day of day of talks by them, covering current, and hot, topics, is being organized . This is the Open Colloquium , to which they are invited to participate. Read More

*** The drive to lift the artisanal sti g ma

The wider diamond world is engaging with the small-scale mining sector and taking steps to encourage better standards. The community of Fandehun is not used to pomp and ceremony. The modest village in the heart of Sierra Leone’s Kono District has been sustained by diamond mining for over 50 years but lacks the basics many take for granted — notably, safe drinking water. It was therefore an important step for the townsfolk when local officials, including government ministers, gathered in early February to inaugurate a well for the community. Read More

*** Traders to open precious stones market in Nairobi

A private and public sector attempt to create a national jewelry and precious stones open market is at an advanced stage, with a national forum set to take place in Nairobi between July 11 to July 14. Kenya G em and Jewelry Fair (KGJF) project manager Victoria Wahu said the event, bringing together local and foreign precious stone buyers, seeks to create a platform where miners can dispose of precious stones at higher and known prices. This is against tradition where precious stones are sold in the black market by small-time dealers or exported by multinational mining firms. Read More

*** Three ways Millennials and Gen-Z consumers are radically transforming the luxury market

A new study is out that sets the stage for a radically transformed luxury market by 2025. Millennials are driving this train, and what they expect from luxury brands is radically different from previous generations. Fasten your seatbelts, it’s going to be a bumpy ride into 2025. The study, produced by two powerhouses in luxury circles, Boston Consulting Group (BCG) and Altagamma , completes their sixth annual survey covering more than 12,000 respondents in ten leading countries, with an oversampling of consumers in the United States and China, the world’s two largest markets for luxury brands. Read more

*** GJEPC Chairman expresses concern about overall growth of the gem and jewelry sector

GJ EPC Chairman Pramod Agrawal spoke at the opening of the India Silver & Fashion Jewellery Buyer Seller Meet (BSM), in the pink city of Jaipur in Rajasthan, addressing some of India's gem and jewelry most pressing issues. He reported that the GJEPC had been talking with the Indian government to address major banking issues affecting the gem and jewelry industry. Among the topics raised were the increase in cost of funds; the need for interest subvention; the dollarization of credit limits; the allowance of release of bank guarantees and cash margins of exporters after exports; the reintroduction of Export Credit Guarantee Corporation of India ( EC G C ) and Willingness to Pay ( WTP ) policy for the sector, as well as taxation Issues. Read More

*** GFI: India lost about US$13.0 billion to trade mis-invoicing in 2016

Global Financial Integrity (GFI) recently launched its comprehensive study regarding estimated revenue losses from trade mis-invoicing in India during the year of 2016. GFI analyzed the level of trade mis-invoicing and estimated potential tax revenue losses to the Indian government totaling US$13.0 billion, or the equivalent of 5.5% of the value of India’s total government revenue collection that year. Trade mis-invoicing is the largest source of illicit financial flows (IFFs) and occurs when importers or exporters falsify prices for goods on invoices. Read More

*** GFI: India lost about US$13.0 billion to trade mis-invoicing in 2016

***NAJA announce s pro gram for its 52nd ACE@It Mid-Year Conference

Dallas, Texas is the site of the mid-year conference of the National Association of Jewelry Appraisers (NAJA). In addition to the spectacular line-up of speakers and topics, Heritage Auctions is hosting the 2019 August Conference, so there a number of surprises are also in store for NAJA members in this Texan city. Read More

*** Newly discovered herbivore dinosaur fossils preserved in opals

Scientists found colorful fossils from Australia which were said to belong to a newly discovered species of plant-eating dinosaurs. The remains belong to the first herd or family group of dinosaurs that were discovered in Australia. The fossils represent the most complete dinosaur fossil ever found preserved in opal.The remains were found in the town of Lightning Ridge, 450 miles northwest of Sydney. Scientists believe that they are 100 years old. They have noted that the fossils have a rare blue-gray hue. They have also noted some occasional flashes of brilliant colors that are gem-quality. Read More

*** New stores fuel Chow Tai Fook sales growth

Chow Tai Fook has reported that sales and profit rose during the fiscal year amid increased purchases of gold jewelry and an expansion of the company’s retail network in China. Group sales grew 13% to HKD 66.66 billion ($8.5 billion) for the year ending March 31. Retail sales in mainland China climbed 8% to HKD 30.42 billion ($3.88 billion), while revenue from Hong Kong and Macau jumped 12% to HKD 23.06 billion ($2.94 billion). Other revenue came from the company’s wholesale business, which accounted for 20% of overall sales. Gold was the company’s strongest seller during the period. Group sales of gold surged 13% to HKD 31.89 billion ($4.07 billion) for the year, while revenue from gem-set jewelry rose 4.5% to HKD 12.19 billion ($1.55 billion). Read More

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*** India, key market for colored gemstones, says Gemfields

The global market for rough, colored gemstones is estimated to be over $2 billion (compared with more than $13 billion for diamonds) and Gemfields' recent auction results have given reasons that 2019 would yield positive results according to Sean Gilbertson, CEO, Gemfields Group. He did not quantify the business volume from India but has accorded high importance to India due to growing demand for gemstones and plentiful availability of skilled workforce required for cutting and polishing the gemstones. "India plays a crucial part in Gemfields’ operations,” said Read More