Rise in luxury markets creates gap for ‘billionaire’ vodka

Isaac Mostovicz writes that that the taste for extreme luxury has not dampened...

A couple of months ago I wrote a blog post on luxury bathrooms, and the increase in demand for luxury bathroom products from Chinese consumers.

It seems as though the taste for extreme luxury has not died down.  ‘Billionaire Vodka’ – a vodka which costs a cool $3.7m – is set to be released onto the market. To help justify the cost, the bottle is encrusted with diamonds – 3,000 to be precise. Leon Verres, the luxury brand that makes the vodka, even says the drink is filtered over diamonds. This is just one of the latest in a long line of products, such as this crystal studded airplane trolley, or these $18,000 flip flops, which are expensive for the sake of being expensive – and exclusive.

The growing range in products are out of reach for all but the super rich, indicating that even as the financial situation in Europe becomes less certain, the rich are determined to keep spending on new products designed for the few.

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Janus Thinking Announces the Launch of Kahro Diamonds

Isaac Mostovicz writes...

Janus Thinking is happy to announce the launch of Kahro Diamonds.

Kahro Diamonds is about the uniqueness of people and the power of diamonds. We put the fun and enjoyment back into diamonds by assisting you to find that diamond that truly represents who you are.

A diamond should reflect your personality, worldview and values. Our mission is to help you find the right diamond through this unique approach, using tools exclusive to Kahro and based on the logic behind Janus Thinking.

Kahro Diamonds enables our customers to connect with the “right” diamond, which helps them connect to the past and present as well as to their values and desires, whether it is for a once-in-a-lifetime proposal or simply a well-deserved treat for oneself.

Visit the Kahro Diamond Facebook page and take our quiz to see what kind of diamond might suit you!  If you like the page, become a fan and check back for more interactive games on the site.

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Diamonds help luxury shoppers connect with how they see the world

Isaac Mostovicz writes that diamonds help purchasers connect authentically to their values and personal qualitites...

I came across an interesting press release from the International Diamond Manufacturers Association (IDMA) this week calling for the international diamond manufacturing community to restructure diamond financing. They are worried because while demand for rough diamonds remains greater than the rough supply, the same cannot be said for consumer demand for polished diamonds, particularly in the US.

Stores are closing or having a hard time turning a profit, and the focus is on lower prices and lower quality. The supply of diamonds going to retailers will decrease, but for now consumers have not yet returned to retail stores. Nevertheless IDMA are calling for retailers to pay their suppliers fair prices, necessitating keeping their prices up for consumers. Said Moti Ganz, the president of IDMA:

“Consumers can still buy three pieces of diamond jewelry for the price of one Louis Vuitton bag. The price of diamonds today should be at least 200 percent more than their price in the 1990s. Just look where gold and platinum are and look where we are!”

Should we ask ourselves why the price of diamonds has not kept pace? Actually that’s the wrong question–there is no direct link between the price of rough diamonds (based on the internal considerations of the diamond industry) and the price of polished diamonds (dictated by the consumer of diamonds and diamond jewellery, a population that was forgotten by the industry).

In my view, luxury retailers must first understand why someone goes out and buys a diamond in the first place. In my PhD research, I found that luxury shoppers are looking to express themselves and connect with how they see the world. The better a retailer can help the luxury purchaser understand her goals and connect authentically to her values and personal qualities, the more successful the retailer will be. Walking out of the store, the lucky woman or man should feel empowered, special and unique, respected and feeling free.

Providing the right service doesn’t come easily. A jeweller should be able to detect first who the client is. A Theta woman seeks diamond to help her be ‘truly her’ in a world where most things are temporary and dependent on social setting and circumstance. A Lambda woman wants a diamond that helps her to be unique and genuine; her diamond is unlike any other diamond on the planet, an individual selection that will make her exceptional. As for price, do not underestimate yourself. If you fell confused, the only reason is that the offer of the diamond was not done correctly. When the luxury customer is presented with the right offer, he or she knows exactly what the value of it should be.

Following these values for many years we found that we can properly help the luxury customer, and together with our colleagues we were very successful doing so in the last 25 years. However, the diamond industry failed in respecting the need for luxury and tries to turn the luxury consumer into a diamond dealer when the effort should be done in the other direction.

We hope that we have enough practical knowledge to start offering the luxury consumer what he or she wants. We are aware that this practical knowledge is in the hands of very few people, yet the entire world could appreciate this freedom of expression and choice. Recently we started an initiative that will bring our message to the luxury customer and enable him or her to properly purchase his or her special and unique diamond that can fit only her or him. We will need your help to check our luxury hypotheses and to see whether what we say is really convincing you. In the coming days we will address you again and ask you to be our ambassadors to help us spread our important luxury message. Stay tuned!

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British Diamond Heist: Diamonds Still At Large

Isaac Mostovicz writes that Graff hasn't found its diamonds...

Last August a team of diamond thieves stole 1,500 diamonds (in 43 jewelry pieces) worth £40 million from Graff Diamonds on New Bond Street in London. This week four of the thieves were found guilty of carrying out the raid, but the diamonds still haven’t been recovered. The two gunmen who had entered Graff Diamonds had handed off a black bag containing the stolen pieces to a motorcycle rider in a concealing helmet, who rode for two blocks then disappeared on foot in Green Park.

There isn’t much hope for finding the gems any time soon. Ivy Cutler, a diamond grader at the Gemological Institute of America, said

“I have spoken with Scotland Yard and the Flying Squad and we have them marked in our system. Sometimes pieces come back very quickly, sometimes it takes years. The criminals involved in this are extremely clever, unfortunately. I think they have probably changed hands many times and possibly been moved between countries. We can only hope the diamonds eventually turn up when an innocent buyer asks for their authenticity to be checked.”

The stolen diamonds were all certified and should be recognizable, but it’s possible that the diamonds have now been recut or falsely recertified. It will be interesting to see if any reappear, or if Graff would publicise their reappearance — my guess is probably not on both counts.

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Zimbabwe and the Kimberley Process

Isaac Mostovicz writes that the export ban on diamonds from Zimbabwe remains in place...

Diamonds from Marange fields in Zimbabwe have been all over the news of late. Diamonds from Zimbabwe are not currently certified by the Kimberley Process (which works to stop the trade in diamonds that finance conflict), and the Zimbabwean military has been accused of seizing control of these fields and organizing smuggling operations. There’s currently an export ban on Zimbabwean diamonds because they aren’t certified conflict-free, and this week the ban was upheld by Kimberley Process members, but Zimbabwe is now considering exporting diamonds anyway.

It’s a difficult situation, because if these diamonds were sourced ethically and formally allowed to be exported, they could greatly benefit Zimbabwe’s economy and put its diamond production efforts on par with Botswana. And while it appears that efforts are being made to improve the situation, Kimberley Process members weren’t confident that the sourcing of the diamonds met its standards because the fields remain under control of the Zimbabwean military, which is accused of committing human rights abuses in addition to smuggling the diamonds out of Zimbabwe.

A subgroup of the Kimberley Process is meeting next month to try to reach a compromise on Zimbabwe; we’ll have to wait and see if this impasse can be resolved.

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Sotheby’s 29 carat flawless diamond will test the market

Isaac Mostovicz writes that whether a flawless 29 carat diamond ring sells will determine the state of the diamond industry...

At its New York headquarters on October 19, Sotheby’s will take the diamond industry’s temperature when it auctions a 29 carat flawless diamond ring. The price it fetches will be telling of the state of the industry and the prices buyers have a stomach for.

Luxist is reporting that the price is estimated at $1.8 million to $2.2 million or $61,000 per carat. A flawless diamond of this size would be eye-catching to any Theta personality, both because of its rarity and overall perfection.

And while this is a truly remarkable diamond, it’s worth noting that this is yet another example of what I wrote previously about the industry forgetting the consumer. Other items included in the auction are considerably less expensive, with the next highest item expected to go for between $250,000 and $300,000.

It’s an industry test to see what kind of diamonds will sell in this climate and which will not. If the only diamond left standing is the 29 carat one, we’ll know the industry will and will not tolerate.


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Despair in the Diamond Market

Isaac Mostovicz writes that diamonds as investments could destabolize the market...

Chaim Even-Zohar’s latest memo reveals the diamond industry in despair. At the moment Diamonds are not being sold to the market of consumer and what we see is inter-trading only. Banks do not see new money coming in, and while they hail the fact that debt went down by 20%, how much was due to real sales and how much was due to squeezing the empty pockets of the industry? The cancer has reached the producers, who act irresponsibly and pour billions of dollars into the market with the only short-term goal of survival. Alrosa lost half a billion dollars this year and De Beers struggles to finance its debt. All in all, somewhere along the line the industry forgot the consumer.

We all know the truth about diamonds for investment (short answer: they’re not), but the new trend that big players want to establish just shows their level of despair, trying to play on the world’s ignorance. This is not the first time that the trade, championed by De Beers, has done so. The world has believed that “all diamonds come from De Beers” and if you do not have a De Beers diamond, something is wrong with your diamond. I do not blame De Beers for not correcting this perception, but they were happy with this ignorance. What we see now, this attempt to attract investors, is something really dangerous. This raises some painful memories. During the heydays of the diamond boom before 1980, a Belgian worker decided to buy some diamonds for investment. When he came to us some ten years later with his parcel, we looked at it and literally had tears in our eyes. Here was a hard worker with a permanent layer of dirt under his nails and who had bought diamonds with full faith that his purchase was a good value that would appreciate. In actuality if he got 5% of his investment, he would have been lucky.

This was not an isolated case–I have a personal example: When my uncle left our company in 1975, he took, as part his compensation, a few parcels of polished goods that were estimated well below market price. When he tried to sell these goods twenty years later, he hardly recovered his investment even after repolishing and regrading many of the goods.

We also can’t forget the $1 trillion of goods at market price that are in the hands of consumers — these goods will be worth much less when consumers try to dispose of them. Jewellers pay about a third less on average for the same goods when going to their suppliers. When they buy from the consumer market, they pay a lot less for several reasons: they have to pay cash, the goods won’t always sell easily, and sourcing from the consumer market is not always steady.

On top of this, the jewellers’ market is very narrow and quite often they will try to move it up the supply chain to their supplier or supplier’s supplier, reducing the value they can offer even further. If the market tries to market diamonds for investment, they are literally cheating the market. Most of the goods that will be sold will fetch only a fraction of the investment when they are resold, even without any more mining. And even extraordinary large and special diamonds, which might have been a good investment in the past, won’t be a good investment if many of them are sold later on at lost or close to par.

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New, old trend emerging on the diamond market

Isaac Mostovicz writes that imperfect stones are not always considered imperfect anymore...


A new trend is emerging on the diamond market, where rough unpolished diamonds now are being sought after by diamond dealers and used by jewellery designers for their character, uniqueness and authenticity.

However, this trend isn’t actually new, but started nearly a decade ago with underground German stone-cutters creating innovative pieces that pushed boundaries, and have since been in vogue in avant-garde circles around the globe. But it is only now that this trend is reaching a wider audience and is being picked up by big brands such as Tiffany’s, Cartier and De Beers.

Stones with imperfections that previously would have destined them to be thrown on the scrapheap are now used and considered as a source of character.

Tiffany’s vice-president John King told the Financial Times that Architect Frank Gehry is creating rough diamond jewellery for the company. “He is attracted to raw nature which is not neatly faceted, to rough textures and, from his work with wood, to the warm browns and ambers of rough diamonds”

Some argue, however, that jewellers may use such gems as a way of squeezing extra value from stones that previously had little use; and now that they are in vogue, prices of rough or included stones has indeed rocketed.

In the end it comes down to supply and demand, and it is up to the customers to decide whether they are prepared to pay for these traditionally overlooked stones. My guess is that Lambda personalities, who generally seek originality and challenge, are the ones most attracted to the distinct and unique characters of these stones, whilst Theta personalities, who seeks truth and unity, may dismiss them as un-pure and lacking the brilliance of a perfectly cut and polished diamond.

LuxuryLab Daily Digest « says of this article...

[…] New, Old Trend Emerging on the Diamond District (Janus Thinking) new trend is emerging on the diamond market, where rough unpolished diamonds now are being sought after by diamond dealers and used by jewellery designers for their character, uniqueness and authenticity. Possibly related posts: (automatically generated)Baume & Mercier Watches Lose Their CEO […]

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Dazzling Night of Luxury Chocolate and Bling

Isaac Mostovicz writes that an interesting gimmick might be counterproductive due to conflicting messages....

Diamonds and chocolate both carry connotations of indulgence and luxury, although each in very different ways, and they are not usually consumed simultaneously. Mervis Diamond Importersberry-ritani is looking to change this by inviting their customers to an out of the ordinarily shopping experience on the 22nd of July. They offer an evening where customers can drizzle fresh fruit in a diamond topped chocolate fountain and sip chocolate martinis while pursuing a selection of diamonds at reduced prices.

This is an interesting gimmick, which should offer distinctiveness and help generate interest in a slow market. However, positioning an event as an upscale luxury experience, while simultaneously marketing it as a chance to bargain hunt at reduced prices might be counteractive due to the inconsistent messages it sends out.

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Recovery in sight for the diamond industry?

Isaac Mostovicz writes that De Beers is cautiously optimistic...


The diamond industry may be beginning to recover, according to De Beers executives who spoke at the Diamond Town Hall Meeting at the Antwerp World Diamond Centre earlier this month.

Gareth Penny, De Beers managing director, said “diamond inventories have fallen to levels which have justified increasing the mining production of the De Beers mines after it had been reduced by some 90 percent in the first quarter of the year.” He also said “The demand for De Beers rough diamonds is picking up,” and that “De Beers production is increasing to keep pace with demand. Retail sales have also shown an improvement.”

He noted that in the period from 1970 to 2009 there were four major recessions in the US, and in the five year period following each, rough prices rose sharply. Penny expects the same to happen this time. I do hope he’s right, and that demand truly is rising. It would be all too easy for him to just tell the crowd at the town hall (including sightholders) things they want to hear.

Photo by Hamza Hydri

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