Colored Gems Profit

RAPAPORT…
For many exhibitors at the American Gem Trade Association’s (AGTA) GemFair pavilion at JCK Las Vegas, sales surpassed their expectations for the first year in its new home at Mandalay Bay Hotel. Like all major moves, exhibitors were unsure if their new location would successfully draw buyers. Adding to their caution was a lingering uncertainty as to whether the economy is truly on an upswing and whether jewelers are motivated to buy. In the end, vendors said buyers had little trouble finding their lower-level pavilion and that it was a destination for many attendees. When they did arrive,  buyers were ready to dive into color, with particular interest in top-quality gems, rare stones and unusual cuts. Everyone agreed sales were up from 2010, anywhere from “slightly” to “best show ever.”

Testing the waters with extended show dates, the AGTA section was open one day before and after the main event. According to Doug Hucker, AGTA chief executive officer (CEO), the first day went like gangbusters. “We had phenomenal traffic on our opening day, with plenty of active buying taking place,” he said, noting that typical ebbs and flows in business followed on subsequent show days. Hucker said the jury is out as to whether AGTA will stay open an extra day at the end of  JCK in 2012, pending response from a vendor survey.

Upbeat

Overall, the mood was upbeat. Rich Barker of Barker & Co., a gem wholesaler from Scottsdale, Arizona, was happy with sales. “People were buying without much talk about the economy,” he said. “Buyers knew what they wanted and were ready to buy.” While a little of everything sold, the family-run firm’s strength in rubellite proved a winner for buyers stocking up on this pink-to-red tourmaline.

Bill Larson, president of  Pala International, also reported selling large lots of hundreds of carats of tourmalines. The Fallbrook, California–based company is known for its extensive selection of tourmaline, particularly in neon blue to mint green colors. “We also sold lots of different gemstone species from a fine 4-carat alexandrite to top gem-quality, 10 carat-plus blue zircon.”

Vegas show results for Larson were about on par with those of the Tucson GemFair held in February, which he had described as a “monster” event. “Most of our clients told us that fine jewelry is selling again.” He said several foreign buyers who closed big purchases with him in Tucson were back in Vegas for another round. “Some were from Thailand, but most were from Mainland China and Hong Kong. But we also saw our regular jewelers and manufacturers. We had a very busy show.”

Many vendors said they saw more buyers from China and India at AGTA. Ron Rahmanan of Sara Gem Corp. in New York City said that as the middle-class grows in these markets, demand for gemstones increases. In particular, he said colleagues selling tourmaline reported that the Chinese were buying up the gem, which is highly prized in their culture for its use by the royal family in the Qing Dynasty. “Their run on the gem has turned the tourmaline market upside down.”

Moreover, Rahmanan said Indian buyers are scooping up natural yellow sapphire. It is the most popular gem next to diamonds in their culture due to its astrological significance as a stone of prosperity. “We can’t even touch it,” he said. “Our stock in yellow sapphire is the lowest it’s been in 25 years. The combined buying power of emerging markets like China and India has made it difficult for U.S. dealers to compete.” But his business — specializing in ruby, sapphire and emerald — has been solid this year and  Vegas sales were good.

While experienced gem-savvy buyers had AGTA on their radar, exhibitors are always happy to find new clients. “The best part of a great show for us was the new people we met,” said Niveet Nagpal, vice president for the Los Angeles–based
Omi Gems. “The new location, combined with the launch of our new color- stone bridal line, helped bring new buyers to our booth.” He said most buyers he met with were serious. “There were not so many lookers as in the past few years.”

Nagpal said his company’s new bridal line, set in platinum and 18-karat gold, was developed in response to customer demand, evolving from Omi’s luxury jewelry line launched in 2008. Recognition of its success was the first-place honor Omi took in the 2011 AGTA Spectrum Awards bridal category and Best Use of Platinum and Color for its nearly 6-carat tsavorite ring with yellow diamond accents set in platinum and 18-karat gold. While sapphire, ruby and emerald are top engagement-ring choices, Nagpal noted demand for other gems such as spinel and alexandrite.

Special Stones

Undoubtedly, top-quality gems remain best sellers as the high end of the market continues to do well. Ed Boehm, president of RareSource, based in Chattanooga, Tennessee, touted a great show with important sales of large blue sapphire, padparadscha sapphire and Paraiba tourmaline, although spinels have been his mainstay.

Specialty cuts were also in demand, according to Bella Campbell of Kaiser Gems in New York City. “We had a fantastic show, one of our best ever, with all our new designer cuts selling well, including our random flat table quartz, gem doublets like Rose de France amethyst over hematite and confetti rock crystal, as well as our oval and round domed honeycomb-faceted gems.”

Also hailing the biggest show in its history was Rare Earth Mining Co., Trumbull, Connecticut. Owner Bill Heher said he sold everything from loose stones to finished gem jewelry, mineral specimens and objects like knives inlaid with dinosaur bone.

Among Heher’s most popular products at the show were drusy, especially set in exotic wood and sterling silver designs mixed with other gems like watermelon tourmaline; golden quartz; meterorite; obsidian infused with bronze and zinc; and a variety of opal, including new material from the Santa Rita Mountains in Arizona that is candy-striped in shades of pink, gray, white and blue, with flashes of fire.

Heher said that unusual gem merchandise affordably priced between $65 and $200 wholesale was his sweet spot, giving jewelers something beautiful and different that they can sell for a healthy profit, while maintaining attractive retail prices for their customers. He said awareness has risen for a greater variety of gems, which sell as much for their uniqueness as the stories behind them.

This was proven to be true at the booth of Columbia Gem House. Earl Allen, marketing director for the Vancouver, Washington, firm said clients from leading jewelers to young designers came specifically for its Fair Trade Gems. It’s been over a decade since Eric Braunwart, company president, established mine-to-market protocols for his supply chains. “People are seeking us out, as sustainability and transparency become paramount in our industry,” Allen said, also noting continued interest for the firm’s Gem America collection.