THE GEMSTONE FORECASTER VOL. 16, NO.1 - PART TWO

TABLE OF CONTENTS PART TWO

IN THE NEWS

National Jeweler, January, 1998
"Colored gemstone sales increase slightly in 1997, despite the whims of the world's manic depressive stock markets. Better yet, many gem dealers and retailers agree that this upward trend will continue throughout 1998. While rubies, emeralds and sapphires are big sellers, customers either want the cream of the crop or settle for low quality, highly included stones. High quality rubies are hard to find above three carats unless dealers are willing to shell out large sums of money. World imports of cut ruby have risen steadily during the past three years, according to the U.S. General Statistics Reports. Ruby imports totaled $84.5 million in 1995, $85.6 million in 1996, and surpassed $63.5 million as of July, 1997.

There has been more of a demand for exotic stones including cat's eyes above 7 carats, fine star rubies above 6 carats and fine Kashmir sapphires above 4 carats."

Colored Stone Survey, Jan./Feb. 1998
Here are some interesting results according to a new survey of retail jewelers conducted by ICT Research:

What is the most important factor in buying colored stone jewelry?

Quality22%
Beauty18%
Color14%
Design12%
Price12%

(This seems to indicate a trend towards quality and away from price in buying decisions. ED)

What is the greatest problem facing the jewelry industry today?

Disclosure of Treatments18%
Competition14%
Low-End Discounters14%
Misrepresentation of stones14%
Economy10%

(Clearly, the disclosure of treatments is the number one concern of retail jewelers in America. ED)

Predicted Top 10 Bestsellers

(The " Big Three" and the rest. ED)

Rapaport Diamond Report
December 5, 1997
"Dateline Gem Expose Draws Industry Fire"
"NBC's prime-time news magazine show, "Dateline NBC", recently ran a story on the fracture filling of gemstones. Complete with hidden cameras, token experts, and major jewelry chains, the reporters, feeding on recent court cases involving undisclosed emerald treatment, set out to expose a thrilling scandal. Jewelers, and those involved in the gemstone business, however, were not so thrilled.

New York's International Gemological Institute (IGI) immediately issued a press release, with no mention of "Dateline", detailing the current state of emerald treatment in the jewelry business. "It is common knowledge that emeralds usually have been exposed to some form of enhancement," said the release. "This is not earth-shattering news."

"It is our experience at IGI," continued the release, "that most of the emeralds that we test currently are `clarity enhanced.'" "Dateline's" gem expert, C.R. "Cap" Beesley, President of the American Gemological Laboratory (AGL), estimates that 70% of emeralds sold today are fracture-filled. Shane McClure, manager of identification services at the Gemological Institute of America (GIA) Gem Trade Laboratory, has said in the past that at least 90-95 percent of the emeralds that GIA sees "are treated with some kind of filler".

Douglas K. Hucker, executive director of the American Gem Trade Association (AGTA), is quick to point out that many of the statistics reported by "Dateline" and Beesley himself are undocumented, and that the reporting had a definite slant to it. Experts argue that because gemstones are such individualized items, it is impossible to place an exact percentage on the difference in value of the same emerald treated versus untreated, a difference that Beesley estimated at between 25 and 40 percent. "The report was slanted and sensational," continued Hucker. "The misinformation and omissions were rampant."

In its report, "Dateline" intimated that such well known retailers as Bailey, Banks, & Biddle, Tiffany and Co., and Macy's have all withheld information about the treatment of gemstones they sell. The show took hidden video of both jewelers and an appraiser denying the existence of resins in stones that had them. Each of the retailers responded with apologies when told that they had been victims of a "Dateline" expose. Each retailer promised to become more aware of the products they sell, while the appraiser admitted that although there was a good probability the "Dateline" stones were filled, there was no way he could accurately test for filler.

"If there is one sliver of good that comes out of this, it is that jewelers have learned that they need to disclose enhancements," said Hucker. "The issue of disclosure is one that needs to be continually addressed." The IGI agrees. "What needs to be understood is that treatment must be disclosed to all parties, starting with the source. The end result to the consumer, is that one would be able to afford to purchase a natural emerald that has been treated for less money than a similar stone not treated." The emerald industry could grow to be bigger than ever with the addition of these more affordable, yet still beautiful stones."

(NBC's "Dateline" aired the program, "Romancing the Stone" on national television November 21, 1997. The controversy continues. ED)

Rapaport Diamond Report
January, 1998
"Trade Inaction Paves Way for Exposes"
By Cap Beesley
"Your recent article entitled "Dateline Expose Draws Industry Fire", represents an unfortunate excursion into the murky waters of trade and lab politics/press releases by the ill advised and/or the inexperienced. The "Rapaport Diamond Report" has generally taken a more objective and thorough view of important industry issues. The responses summarized in this article are typical of the kind of rhetoric that has fostered disclosure problems and precipitated the unfortunate Washington Emerald Case fiasco, as well as the predictability of the "Dateline" expose. The industry was a prime target because of its failure to effectively put aside politics in favor of protecting the buying population it was supposed to serve. After decades of deliberating, the industry is still grappling with whether or not the buyer or the industry can handle the truth about fracture filling and other treatments.

To "Dateline's" credit, they stayed focused on the customers' and retailers' right to know what they were buying without exception. After extensive interviews with AGTA's pointman for media interaction and GIA staff, "Dateline" concluded that neither organization had a handle on the issue of detection or disclosure and as a result they were both excluded from the segment. "Dateline" did not consider IGI a viable informational option in the preparation of this report. In reality "Dateline" could have been much more critical of the jewelry trade and the labs for their dismal record of treatment disclosure and detection.

Your article confirmed that many in the industry have missed the point. If AGTA and others were serious about full disclosure, they would have been more supportive of the content of the "Dateline" story. Few in the industry are apparently aware that is was the AGTA tampering with the original enhancement guidelines that has predictably stimulated this flurry of legal complications and media interest. The changes they implemented in the original guidelines specifically focused on the fracture-filling of emerald and rubies. Their modifications enable suppliers to manipulate both the retail jeweler and the general public. The "Dateline" story was a valuable service to those committed to full disclosure. However to the population that is more concerned with PR than performance, there is no choice but criticism. Potentially, the sources you referenced in this article may find it more appropriate to have their walk match their talk in the reality of the marketplace. We hope that the 25 million people who viewed this segment will have a clearer picture of how to buy more intelligently."

Prime Time Live's "All That Glitters"
In another piece of bad public relations for the jewelry industry, "Prime Time Live" aired a show in which ABC bought synthetic gems that were sold as natural from the chain stores of Service Merchandise and J.C. Penney's, plus the large retailer, Bergdorf Goodman. ABC bought a $400 diamond and emerald bracelet sold as natural from Service Merchandise and all the stones turned out to be synthetic. This happened in three out of four Service Merchandise stores. They also bought a synthetic star sapphire from J.C. Penney's for $270. The TV show remounted the gems and tried to resell them to the stores. They refused to buy them because they recognized the stones as synthetic. If that was not bad enough, Diane Sawyer even announced that the ruby necklace purchased by her husband turned out to have synthetic stones mixed with the real stones. The producers admitted some jewelers passed the ABC "sting", but that ended up on the cutting room floor! The show concluded by stating if the price for a so called "genuine" stone sounds too good to be true, it probably is.

You can read the entire transcript of the show at: http://www.abcnews.com/onair/ptl/html_files/transcripts/ptl0204b.html

GEM TIDBITS

Scottsdale Robbery
On January 6, 1998, three people robbed Helzberg Diamonds in Scottsdale. A well dressed man with two women entered the store at 9:00 p.m. and ordered the three employees to the ground. The robbers wore no masks and did not attempt to conceal their identities. The man brandished a gun and ordered the clerk to fill the bag he brought with diamonds. The robbers cleaned out the cases and took jewelry estimated at $2 million.

Waldorf-Astoria Burglary
The H. Stern store at the Waldorf-Astoria was recently burglarized. A male broke into the store at 5:30 a.m. He smashed a display case and stole a necklace of unspecified value.

New York Ambush
Two gem dealers were robbed on Thanksgiving on the Long Island Expressway entrance ramp. The gem dealers had just picked up their goods from the Zurich Depository Corp. The robbers sandwiched the dealers' car between two of their cars and forced them to stop. Six men forced the gem dealers from their car. The robbers stole their car and their briefcases filled with gemstones estimated at $245,000.

Winston's To Be Sold?
The two sons of Harry Winston, Ronald and Bruce, may sell the legendary company. They have been fighting legally for 7 years over the estate. It is believed to be worth $100 million.

Valentine Carat Candy
In a unique promotion, Godiva, the chocolate maker, gave away an emerald, ruby, and diamond necklace in San Francisco. The piece of jewelry was once owned by Jacqueline Kennedy Onassis. The necklace has five emerald beads, 44 small Burma rubies and diamonds weighing 34 carats. It was designed by Van Cleef and Arpels and bought by Aristotle Onassis. The necklace was sold at Sotheby's in 1996 for $156,000 and later purchased by Godiva for an undisclosed amount. Inside the box of winning chocolates a coupon said, "Congratulation, you won."

Zales Personality Profile
Zales' Jewelers recently interviewed 400 women to find out what the shapes of their stones reflected about their personalities. Here are the results:


The information provided in this newsletter has been derived from research and sources believed to be reliable. However, no guarantee is expressed or implied as to their validity. Opinions included herein are subject to change without notice. The gem market is speculative and unregulated. Certification does not eliminate all risks associated with the grading of gems. Recommendations are meant for those who are financially suited for the risks involved. Past performance is not a guarantee of future performance. Neither NGC nor The Gemstone Forecaster guarantee a profit or that losses may not be incurred as a result of following its recommendations. They may also hold positions in areas they recommend. Subscribers should not view this publication as investment advice, nor is it intended as an offer or solicitation with respect to the purchase or sale of any security.
The following is for snail mail only:
Write:
NGC
P. O. Box 42468
Tucson, AZ 85733
Call: 1-800-458-6453 or (520)-577-6222

NAME_______________________

ADDRESS____________________

CITY________________________

STATE______________________

ZIP_________________________

PHONE______________________

For comments, questions or price quotes E-mail NGC, Attn: R. Genis

Return To Home Page