Sparkling price hike for yellow diamonds

Gem Diamonds has negotiated a sparkling price hike for its ‘fancy’ yellow diamonds with key customer Tiffany & Co.

Rough yellow diamonds; image by Gem Diamonds

The London-listed diamond mining company this week announced that it has struck a deal with international jewellery brand Tiffany & Co in which the parties agreed to a 25% price increase for their exclusive assortment of rare fancy yellow diamonds from Kimberley’s Ellendale mine in Western Australia.

The price increase comes into effect on 1 October 2010.

Diamonds come in all sorts of shades and colours, with ‘white’ diamonds being the mainstream choice, and the whiter they are the better.

Hence D,E,F colours (actually ‘colourless’ diamonds) are generally more expensive than G,H,I,J colours (‘near colourless’), which in turn are generally more expensive than K,L,M colours (‘faint’), and so on.

The relative expense of colourless diamonds is down to their scarcity in nature – they are simply more rare (although fashion/convention plays a part too, but this is still driven by the underlying scarcity).

But further down the colour spectrum of diamonds colours become rare again, and beyond a certain point – where a tint has become a distinctive colour – diamonds are described as having a ‘fancy colour’.

The rarest (and most expensive) of these natural colours are the reds, pinks, and blues.

But fancy yellows are also in demand and in recent years they have become more fashionable, often set alongside white diamonds which can accentuate their canary yellow colour, with ‘intense yellows’ and ‘vivid yellows’ being especially sought after.

And it’s this demand which is driving up the price of the best of the fancy yellow diamonds from the Ellendale mine in Australia, a mine which Gem Diamonds claims is the world’s single largest producer of rare fancy yellow diamonds.

As well as the underlying demand for such diamonds, there’s another good reason why Gem Diamonds can ask 25% more for these diamonds & the customer is prepared to pay more – that reason is the customer, and the needs of this particular customer.

Tiffany & Co needs no introduction: it’s one of the world’s great diamond & jewellery brands, and as such it can command premium prices for its beautifully-designed and manufactured jewellery product.

But it’s likely that Tiffany are also willing to pay more for these diamonds because of their impeccable source in a ‘first world’ country where consumers will have confidence that first world standards in place in terms of social, environmental, and ethical practices.

Tiffany & Co understands the importance of responsible sourcing (they refer pointedly to ‘Tiffany’s Higher Standards‘) and they know this is an issue which will become increasingly important to their customers around the world: if it’s not important to them already then Tiffany know that it will be.

So sourcing diamonds in this way is a smart move for Tiffany, and if they have to pay a bit more to secure long-term diamond production from a specialist source like the Ellendale mine in Australia, then so be it.

And of course every rare diamond which Tiffany can secure for itself is a diamond denied to its competition…

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Diamondthrills: diamond jewellery hire for weddings, parties, special occasions

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Our diamonds dazzle in the Dragons' Den

Last night’s episode of hit BBC TV show Dragons’ Den featured me pitching Diamondthrills to the famous five Dragons: Peter Jones, Deborah Meaden, Theo Paphitis, Duncan Bannatyne, and James Caan.

As it turned out, we didn’t get investment into the business in the Den, but we’re not going to let a thing like that hold us back!

Anyway, at least the Diamondthrills pitch was easy on the eye and — as Evan Davis’ voiceover put it — added a touch of glamour to the Den.

Our model for the day, Amanda, was adorned by four of our most beautiful pieces of diamond jewellery.

Amanda wore: the Hestia tiara, the Lakshmi earrings, the Aphrodite bangle, and the Eros pendant.

All four pieces are pictured below.

That’s a total of around 600 diamonds, with a total carat weight of about 21 carats, and a retail value of more than £50,000.

We took along a few other pieces too – there was lots of interest in our Flora daisy-chain necklace – but despite all our dazzling diamonds the Dragons could not be persuaded to part with their cash.

Would I do it again?

Yes – with a more aggressive business plan and some more aggressive answers to the Dragons’ questions, I would certainly venture into the Den again.

Does the fact that the Dragons didn’t invest make jewellery rental a bad idea?

Absolutely not!

We continue to generate a lot of interest from brides, from other weddings suppliers, from the press, and also from women going to parties, business events, charity balls and other special occasions.

We’re confident that hiring fine diamond jewellery is the great new way to experience the luxurious thrill of diamonds: we give you access to hundreds of thousands of pounds worth of stunning diamond jewellery in a flexible and affordable way.

If you saw the show we would love your feedback – please comment below!

For the latest in diamonds visit the Diamondthrills Blog

Diamondthrills: diamond jewellery hire for weddings, parties, special occasions

(c) Diamondthrills Ltd 2010

| www.diamondthrills.co.uk

Rima Darwash video documentary features Diamondthrills jewellery

We were thrilled to work with Rima Darwash a couple of months ago on a photoshoot at the Dorset Square Hotel in London. On the day we were also lucky enough to work with Amish Solanki – photographer and cinematographer over from Canada.

You can see some of the results in Rima’s new video documentary here:

We loved working with Rima – a real professional with a great eye for colour and the little details that make a picture special, including of course, our diamonds.

In the footage the model is seen wearing seven of our exquisite pieces (but not all at once…): the Hestia tiara, the Aphrodite bangle, the Turan earrings, the Venus necklace, the Mariana earrings, the Isis bracelet, and the Isis earrings.

You can view Rima’s lovely photographs on her new website and on her Flickr photostream, and more of Amish Solanki’s video work on his Vimeo page.

Full credits:
Model: Sam B
Makeup Artist: Henna-H Bridal
Stylist: Purdip Mutti @ Jasmanique
Outfits: Jasmanique.co.uk
Photographer: Rima Darwash
Cinematographer: Amish Solanki
Location: Dorset Square Hotel, Regents Park, London

For the latest in diamonds visit the Diamondthrills Blog

Diamondthrills: diamond jewellery hire for weddings, parties, special occasions

(c) Diamondthrills Ltd 2010

| www.diamondthrills.co.uk

Rio Tinto's pink diamonds and commoditisation

Mining company Rio Tinto last week launched their annual Argyle Pink Diamonds Tender, a collection which showcases pink diamonds from their Argyle diamond mine in the East Kimberley region in the remote north of Western Australia.

Now in its 26th year, the 2010 sale presents 55 pink diamonds produced by the mine and cut into polished gems. Following a viewing in Perth last week, the collection will tour to Hong Kong, Shanghai, and New York over the next couple of months.

2009 Argyle Pink Diamond Tender; photo courtesy of Rio Tinto Diamonds

The tender is said to include many more “vivid pinks” than in previous years, with individual highlights including a 2.02 carat round brilliant fancy vivid purplish pink diamond, a 1.43 carat fancy purplish red square shaped diamond, and an “exquisite” 0.50 carat fancy purplish red round shaped diamond.

Other ‘fancy’ colours in diamonds are caused by impurities – boron makes them blue, nitrogen yellow, for example – but the origins of pink & red colours are less clear.

It’s thought that pinks & reds are caused by plastic deformation in the crystal structure as the diamonds formed perhaps a billion years ago, but what is known is that the physical conditions that give rise to these colours are very unusual because pink and red diamonds are extremely rare.

And it’s that rarity, of course, which gives them their high value: diamonds of this colour can sell for more than US$1m per carat.

What interests me most about the press release announcing the sale is the fact that these diamonds are being marketed – in part – for their investment value.

Major diamond producers such as Rio Tinto (and even more so, De Beers) have traditionally been reluctant to talk about diamonds as vehicles for investment.

But I reckon Rio Tinto are taking the ‘investment diamonds’ positioning to new levels with this collection.

For example, they talk about the “increasingly rare opportunity” to acquire these diamonds, but if a diamond is beautiful and it appeals on an emotional level then it shouldn’t matter that similar diamonds will become increasingly rare.

Pink diamonds are extremely rare even in a steady state of constant production – hence their great value – but the life of the Argyle mine is limited (current estimates forecast its exhaustion in around 10 years), so these diamonds are running out, and it’s that concept of increasing scarcity which Rio Tinto hopes is a strong motivator to acquire one now in the expectation that its value will increase in the future.

Rio Tinto spell it out fairly explicitly; their press release talks about the “appreciation of the increasing rarity and investment potential of Argyle Pink Diamonds”, and refers to the “increasing propensity for affluent investors and collectors to diversify their portfolios through acquisitions of rare diamonds”.

They go so far as to publish a document which “places this rarity in the context of global supply and demand and the resulting strong price appreciation” [my italics].

Crikey. That sounds to me almost like a promise! Perhaps there should be a disclaimer at the bottom of the page: “Warning: diamond prices can go down as well as up…“.

I can’t recall a major diamond producer going quite this far in terms of talking about diamonds as an investment.

De Beers and others have been reluctant to go down this path because of the fear that it leads to commoditisation, i.e. the idea that people buy might diamonds for their intrinsic value and in the expectation that that value will increase, rather than for their beauty and associated emotional reasons – most obviously in the form of a diamond engagement ring.

Can you imagine a De Beers diamond ad that offered investors the opportunity to ‘diversify their portfolios‘ by buying diamonds? Probably not.

I happen to believe that diamonds can and perhaps even should be treated and traded as a commodity, not least because that would lead to increased transparency in the world of diamonds (especially in terms of pricing) and I think that would be in the consumer’s interest, which in turn would be good for the diamond business as a whole (although less good for many of the middle men within the diamond business).

In addition to the speculative behaviour of investors, there’s another very good reason why diamond miners might not want to talk up diamonds as a commodity: a more liquid and transparent market for diamonds would lead to an increase in diamond recycling.

Imagine all the estate diamond jewellery that would appear from people’s dusty old jewellery boxes if there was a reasonable expectation of getting a good price for those diamonds and a regulated, trusted platform (akin to a stock exchange) to facilitate transactions.

When they say that ‘A diamond is forever‘ they’re not just referring to the lifetime commitment that you’re making to your partner; they’re also making sure that you hang on to the diamond forever because of its emotional meaning, gently steering you away from thinking about its financial value and selling it back into the market in a year or two.

If you and millions of others did that then they wouldn’t need to dig up so many ‘new’ diamonds each year…

Diamond producers and marketers will have their own views on commoditisation, but what’s really prevented it from happening is the lack of benchmark standards for diamonds and a trusted, transparent pricing mechanism.

In other words, we can’t all agree on exactly what constitutes (for example) a 1.00 carat, F colour, VVS1 clarity, Excellent Cut diamond, and we certainly can’t agree today’s price for that exact diamond.

And if we can’t agree on those things within the diamond industry then we don’t have much chance of persuading outside investors to buy derivatives, forward contracts etc. for diamonds, or even to buy physical diamonds in the expectation that they can look up the value of their investment in the FT over breakfast each morning.

All of which is a long way from Rio Tinto’s press release about their extremely rare pink diamonds from Argyle in Australia.

But if major diamond producers like Rio Tinto and De Beers are going to start talking up diamonds as an investment opportunity then perhaps they should also consider the corollary: how benchmarks might be applied to diamonds so that investors can have confidence in diamonds as an investment category.

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Smash & grab raid at London's Royal Exchange

The weekend saw yet another high profile jewel heist in London, this time at the Royal Exchange in the City of London (pictured below).

At about 10pm on Saturday night a red BMW drew up outside a back entrance of the Royal Exchange.

Robbers then managed to get past the building’s wrought iron gates before reportedly using sledgehammers to smash their way into the De Beers and Omega boutiques, grabbing diamond jewellery and luxury watches before making off in the BMW.

It’s understood that an alarm went off at nearby Tiffany & Co but it’s not thought that anything was stolen from there.

The Royal Exchange is just yards from the Bank of England in the financial heart of the City of London.

It was founded in 1565 by Sir Thomas Gresham as a centre of share-dealing commerce for the city, but these days it acts as an upmarket shopping centre for well-heeled bankers and City traders.

The timing of the raid was well chosen: Saturday night is about the only time of the week when the area is quiet, with City traders away from their desks as the world’s markets are closed.

Police are studying CCTV footage and have appealed for help from the public to trace the car, the stolen items, and the raiders. Pending a stock take by De Beers and Omega, no details have yet been released on the stolen items or their value.

This incident follows last year’s record-breaking raid at Graff in Mayfair in which a reported £40m in gems and jewellery were stolen and for which 4 men were sentenced to a total of 71 years in prison earlier this month. The gems were never recovered.

Last August another London raid netted raiders £1m in jewels in less than a minute in a daylight smash & grab at Mozafarian jewellers, located near Harrods in Knightsbridge.

This is the second such incident in London for De Beers this year, following the £2.5m ‘sledgehammer raid‘ at their shop (as well as Tiffany & Co) across town at the Westfield shopping centre in May.

In the wake of that attack the CEO of De Beers jewellery stores, François Delage, commented that this was “yet another reminder of the timeless allure of diamonds”, which showed an admirable talent for turning a crime into a marketing opportunity for diamonds.

Update, 17th August 2010: Police now say that the retail value of the stolen jewellery is around £380,000. This is a slightly more sober assessment of incurred losses than some press reports yesterday which mentioned figures as high as £4 million.

Speaking of peculiar press reports, the front page of yesterday’s Daily Mirror caught my eye:

Apart from the entirely speculative statement “Gang steal £1m gems at shops“, I fail to understand the headline: “De Beers Monsters“.

Is that some sort of pun? Am I being thick?

I don’t see how De Beers can be called monsters as a result of being robbed, even by the Daily Mirror. Am I missing something?

If you can shed some light, please comment below…

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Naomi Campbell and the ‘very small, dirty looking stones’

It’s not often that diamonds dominate the headlines on the TV news and most of the daily newspapers, so we felt that we can’t really let the Naomi Campbell story pass without comment.

On Thursday Naomi Campbell was called to the Hague – apparently against her will – to testify in the war crimes trial of ex-Liberian President Charles Taylor.

Campbell and Taylor were guests at a dinner hosted by Nelson Mandela in South Africa in 1997, and it had been alleged that she was given a rough diamond (or diamonds) by Taylor.

Campbell had previously denied having received a diamond from Taylor (famously throwing a strop on ABC News when asked about it), but under oath at the Hague she finally produced her story, telling the court that two men came to her room after dinner and handed over a pouch containing rough diamonds, with the words, “A gift for you”.

But in a blow to the image of one of the world’s great luxury products, she described them as “small dirty looking stones” and “dirty pebbles”.

(Actually, she might be right about that: rough diamonds can look somewhat underwhelming when compared with the brilliant gems released once they’re cut & polished.)

Mr Taylor is accused of using funds from diamonds mined illegally in Sierra Leone to buy weapons supplied to the RUF rebels in that country’s 1991-2001 civil war.

The rebels in Sierra Leone were especially brutal – one of their trademark ‘punishments’ was to hack the limbs off civilians, including women and children, and there have also been accusations of rape, slavery, and ‘pillage’, much of it allegedly directed and funded by Charles Taylor.

It’s a little ironic that Mr Taylor and Liberia are at the centre of the West African ‘blood diamond’ trade of the 1990s because Liberia itself is not a major diamond producing nation. Instead, it became the smuggler’s route out for diamonds from the neighbouring countries of Côte d’Ivoire, Guinea, and of course Sierra Leone.

Ms Campbell’s testimony is meant to support the case for the prosecution by demonstrating that Taylor had access to rough diamonds and was giving them away in the late 1990s.

But it seems to me (and I’m no lawyer…) that Campbell’s evidence, when viewed in isolation, is not terribly convincing.

Any half-decent lawyer would be able to cast some doubt on the fact that the gift came from Mr Taylor. Then there is doubt that the gift actually contained diamonds (although they have now apparently been tracked down to a charity worker in South Africa so presumably they can be examined — after a gap of 13 years, but, hey, a diamond is forever…).

But even if they are tracked down and traceable to Taylor, he could probably claim that the diamonds were acquired legitimately, or perhaps in South Africa where the dinner took place – a country which has no shortage of small, dirty-looking stones of its own.

It’s not a tremendous leap of the imagination to claim that Charles Taylor was somehow mixed up in diamond trafficking and arms supply to RUF rebels in the late 1990s, but I hope that the prosecution have some rather more convincing evidence than this loose link with a British supermodel who might or might not have taken delivery of three small dirty stones at the other end of the continent from a couple of nameless late night callers.

Much of the coverage has quoted Campbell’s assertion that she had never heard of blood diamonds or of Liberia. But so what? How many young models from Streatham, south London, would have heard of Liberia?

And as for the fact that Campbell hadn’t heard of blood diamonds, well some commentators would like to think that this must be wrong because surely everyone saw the DiCaprio movie, right?

Campbell was making the point that she hadn’t heard of blood diamonds in 1997, but neither had anyone because the term wasn’t coined until later when conflicts in Angola, Zaire, and Sierra Leone prompted a couple of NGOs to publish their reports into ‘conflict diamonds’ in 1998-2000, leading in turn to the establishment of the Kimberley Process which introduced regulation of rough diamond exports/imports from 2003.

The only good to come from Campbell's testimony is that as a result far more people are aware of the horrors of the Sierra Leone conflict and the alleged role of Charles Taylor (and, sad to say, of diamonds) in those horrors.

Perhaps that was the point: that this was a publicity stunt (and not by Campbell because she didn’t want to appear). But I’m not sure that the law and public prosecutions should be used for the purposes of generating publicity.

I wonder what they’ll do next… call Leonardo DiCaprio to the witness stand?

Update: Mia Farrow this morning testified that Taylor gave Campbell a "huge diamond". Is it mischievous to suggest that what Campbell describes as "small stones" and Farrow describes as "a huge diamond" might actually be the same thing? Perhaps they have different standards and expectations when it comes to diamonds...

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Boris and bikes and diamonds

We started to notice some unusual construction going on around us here at Diamondthrills a couple of months ago, and a couple of weeks ago the mystery of the SE1 pavement works was finally solved.

Boris has had the builders in, installing bike stands for London’s new cycle hire scheme which launched at the end of July..

For those that don’t know, the idea is that you can borrow a bike for a quick trip across town and then leave it in one of around 400 docking stations.

So the scheme offers riders convenience (you can pick up and drop off bikes almost anywhere in central London), security (you don’t have to worry about it being stolen once it’s in a docking station), and affordability (for regular short journeys it costs almost nothing).

Plus of course you get a warm fuzzy glow because it’s an environmentally friendly way to get around and it’s good for you physically (apart from the traffic fumes, perhaps, and the constant menace of London’s van & truck drivers).

But what have Boris’ bikes got to do with diamonds?

Well, the scheme caught our eye because it’s pioneering a new way of enjoying a fairly traditional experience: riding a bike.

And we like to think that we’re doing the same thing with diamonds.

Just like Boris’ bikes, we offer convenience because you can pick and choose what to wear and when to wear it on a pay-as-you-go basis.

In addition to convenience we offer flexibility: you can select a piece from our jewellery collection to suit a particular outfit or event (note that Boris’ bikes can’t do that: all the bikes are the same model!).

And in a way we offer the comfort of security because you only have to look after our jewellery for a very short period of time, whereas if you own the jewellery you need to make sure it’s secure all of the time, perhaps by keeping it in a safe, and of course it’s going to pump up your insurance premium year after year…

Lastly: affordability. Perhaps you can actually afford to go out and spend many thousands, or even tens of thousands, of pounds on fabulous diamond jewellery. But why should you have to? If you just want to dazzle with diamonds on special occasions, then why not simply pay a modest amount to borrow what you need when you need some dazzling adornment?

But don’t just take our word for it. Here’s some feedback received from a customer just yesterday, “Thank you so much for the use of the diamonds at such a reasonable price, there would have been no necklace in any jewellery shop which would have sparkled so beautifully at that price!”. Quite.

So bravo Boris! We like your cycle hire scheme for London, and we applaud the fact that it’s spreading the convenience and flexibility of the pay-as-you-go model.

It’s been called rentalism, and we’ve looked at other examples in the past.

It fits in with other trends such as fractional ownership, and although it’s a phenomenon that’s probably been accelerated by the recession over the last couple of years, we think it’s a way of experiencing diamond jewellery (and bicycles) which will outlast the recession and become steadfastly mainstream.

So Londoners: if you’ve got a special occasion coming up you might or might not choose to get there by borrowed bike, but we invite you to be adorned by borrowed bling.

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