Rising value of diamonds raises interest in estate jewelers July 13, 2008 – Posted in: Press
By ROBERT JANJIGIAN
Published: July 13, 2008
Palm Beach Daily News
Like other watering holes of the wealthy, Palm Beach is rightly perceived as a place filled with acquisitive residents who make an island location a must for the most famous names in high-end retail jewelry from around the world.
Estate jewelers and the major auction houses, too, have found the island to be a great source of supply and for their collector-buyers over many decades.
Recently, however, with the price of gold and diamonds soaring, island jewelers and firms who buy jewelry for cash are seeing more customers coming in to trade in unwanted pieces. One established Worth Avenue jeweler also has stepped up his efforts to acquire diamond and other precious-stone jewelry.
Gold prices, according to statistics posted at the Web site goldprice.org, have risen from $675 an ounce in July 2007 to more than $960 an ounce by Friday.
Suggested asking prices for diamonds were raised 25 percent alone just months ago by the Rapaport Report, the diamond industry’s price-reference bible.
Pricescope.com, another Web site devoted to diamond pricing, has tracked a 40 percent to 80 percent increase in the price of high-quality diamonds over the past 20 years.
Retail jewelry sales have been on a consistent upswing over the past decade, said Helena Krodel, spokeswoman for the Jewelry Information Center, a nonprofit trade association based in New York City that is concerned with educating consumers about jewelry and watches.
Jewelry sales over the past 10 years are expected to jump from $43.9 billion to just under $70 billion, she said. The average annual increase in retail jewelry and watch sales is at least a billion dollars a year, with the only downturn coming in 2000 and 2001, with a 2002 return to growth.
Diamond jewelry and loose diamonds represent 50 percent of the retail sales as reported in a 2007 Jewelers of America Cost of Doing Business Survey on the distribution of sales that Krodel provided. The same survey noted that estate and antique jewelry sales account for only 2 percent of the total retail sales in the United States.
Upward trend
Adele and Edward Kahn, who have been buying and selling estate pieces out of their Peruvian Avenue salon for the past 37 years, have seen about 20 percent to 30 percent more sellers come through their doors over the past 12 months.
“When the economy is troubled, as it has been recently, there is always an increase in the number of people who come in to sell,” said Adele Kahn, recalling that in the early 1990s there was a downturn in the economy and an upturn in the jewelry-buying aspect of her business.
“Now, I think they see that they have these old pieces sitting around, and either they don’t want them or are looking for cash, maybe to buy something else, maybe even a piece of jewelry.”
For Kahn, jewelry has turned out to be a “safe” currency that retains its value.
“Look at the price of gold, of diamonds, even silver,” she said.
Kahn’s observation: “Whenever the Middle East gets rich, the price of diamonds goes up.”
“But there are always customers for big diamonds,” she added.
The Kahns, who also operate a House of Kahn Estate Jewelers in Chicago, run by their daughter Tobina, have bought numerous pieces from Palm Beach estates and from royal families and Hollywood sources.
“We buy here. We buy in Chicago,” said Adele Kahn. During the summer months, most pieces are shipped to Chicago for resale, she said.
The Kahns also maintain a network of dealers and collectors around the world to whom they sell some of the jewelry they purchase from customers.
“We are always looking for diamonds, but are also attracted to Art Deco, Victorian and Edwardian things, unusual pieces especially,” said Adele Kahn. “If it talks to me, I’ll definitely buy it.”
“We never take on consignments,” said Edward Kahn. “We always buy. That’s how we’ve established a following here and in the business.”
House of Kahn does not purchase “ordinary” gold chains, costume, mass-market or commercially produced jewelry or pieces featuring synthetic stones.
“We used to have an auction house in West Palm Beach, but since we got out of that business, we no longer take on china, glass, furniture, rugs or home furnishings,” said Adele Kahn. “I also hate cameos.”
The offers made are based on what Edward Kahn refers to as the demand for a particular type of jewelry or stone. They consult the Rapaport Report as a guideline, but say they follow no general rule in coming up with an amount to offer a seller. “We try to buy pieces at a price that allows us to make 15 to 20 percent when we resell it,” said Adele Kahn.
“It’s always better if a seller has an idea of what the value of the piece is, what they want to get out of it,” she said. “That saves a lot of aggravation and disappointment.”
Adele Kahn suggests shopping around, though her strategy is to offer a higher price if it’s something she likes or knows she would have a potential buyer for.
Big diamonds — 10 carats and over — colored diamonds and Deco are hot right now,” she said.
Price point
New York City-headquartered Circa, which opened a satellite buying office at the Palm Beach Towers in April 2006, is strictly focused on buying jewelry and has also seen an increase in traffic over the past six months.
“I’d say there have been about 25 percent more clients coming in since January,” said Tracy Sherman, director of Circa’s local operation.
Though Circa was closed for the week of July 4, the agenda of daily half-hour appointments has been full through June, with the past week especially busy.
“It’s really been nonstop,” she said, recalling that her firm was hesitant at first to operate on the island year-round. “Our stream of customers through the off-season has been steady since we opened.”
Though unable to identify clients by name because of the promise of confidentiality to Circa customers, Sherman has seen sellers with island addresses.
Sherman credits the increase in the number of people coming in to the higher awareness of price hikes for precious metals and diamonds among the public.
“I think many people are looking at their jewelry collections and noticing things they haven’t worn that might be of value,” she said. “I don’t think it’s about need as much as it’s about clearing out things that aren’t necessary to them.”
Lately, however, Sherman has noticed an increase in repeat customers and clients coming in on referrals.
We give them a price on the spot and write a check if they find the figure acceptable,” she said.
“We don’t sit with any of the pieces we buy and thus can be more aggressive with our offers,” said Sherman. Circa’s mission, she said, “is to make offers that clients would be hard-pressed to get anywhere else.”
“Our profit margins are comparatively lower,” said Sherman, explaining how the company is able to offer what she sees as better prices. “We own things on the short term and make the short-term profit.”
Circa ships pieces to its Manhattan headquarters, where they are dispersed to collectors, dealers and international buyers.
The island office, one of four Circa satellites around the country (others are in Chicago, Washington and San Francisco) takes in a large number of signed jewelry pieces from such makers as David Webb, Verdura, Van Cleef & Arpels, Tiffany & Co., Cartier and Rolex, which Sherman views as what would be expected from the Palm Beach market.
“I also buy a lot of diamonds,” said Sherman, who points out that she is not solely interested in high-end pieces. “I’m happy to look at anything — sweet 16 necklaces, what have you.”
But Circa will not deal with costume pieces. “If it’s real, I make an offer,” she said.
Sherman said she always assumes that clients are “shopping around” their pieces, looking for the best price. “Sellers are pretty savvy customers here,” she said. “Thus, our more aggressive offers, and I’d say, our increase in business.”
Icing up
Kaufmann de Suisse has been a Worth Avenue presence for 15 years, with a second Avenue store that opened last season. During that time, jeweler Christopher Kaufmann has allowed clients to sell him jewelry or stones, but in the past few months, in light of the rising prices and what he sees as a more limited supply of diamonds in the marketplace, he has amplified his efforts to purchase jewelry from clients and nonclients alike.
“It was always a service we offered,” he said. “Now, we want to make it a little better known and open it up to a wider audience.
“I am looking primarily for top-quality diamonds,” said Kaufmann. “But I’ll consider anything — rubies, emeralds, sapphires — but no fakes.”
“Diamond prices are the highest they’ve ever been,” he said. “A person selling me one can usually receive more than what they originally paid for it.”
Kaufmann, a certified gemologist, gives an appraisal of a piece or stone he’s interested in purchasing.
“As a buyer myself, I am aware of what the rates are for pieces of a certain quality. If it’s not up to our quality standard, we won’t buy it,”
Kaufmann’s intention is to acquire diamonds, all of which were crystallized 50 million years ago, “so there is no such thing as a ‘new’ or ‘old’ stone,” he said. He uses them for new signature creations.
But Kaufman says he is not becoming an estate jeweler. “I’m just interested in acquiring stones.”