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Big Prices, Big Demand at Jewelry’s High End

Fine jewelry continues to boom this holiday season, with demand heaviest for pieces in rich, saturated hues.

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NEW YORK — What tough economy?

This story first appeared in the December 12, 2011 issue of WWD.  Subscribe Today.

Fine jewelry continues to boom this holiday season, with demand heaviest for pieces in rich, saturated hues — think sapphires, emeralds and garnets, as well as classic gold, diamonds and high-end statement pieces.

“Overall, the market has really sustained momentum so far in the third quarter, even into October and November. This time last year, we saw a pretty strong third quarter, but we’ve seen even more robust growth this year. There is no price resistance,” luxury retail analyst David Wu of the Telsey Advisory Group said, despite findings from a survey he conducted in September that comparatively analyzed fine jewelry and watch prices from March 2010 to September 2011. Looking at products from Bulgari, Cartier, Tiffany & Co., Chanel and Dior, he found that prices, on average, went up by 23 percent, with the biggest increases implemented at Cartier and Bulgari.

He noted that many of the major players, including Compagnie Financière Richemont SA, LVMH Moët Hennessy Louis Vuitton and Tiffany & Co., have seen high double-digit growth this year.

As for how gold prices —which reached record highs this summer but have since declined — are affecting retailers and consumers, Wu believes the impact of gross margins on the brick-and-mortar level has yet to be felt. “Brands are still seeing [pricing] pressures with regards to rising gold and diamond prices from when they purchased the inventory last year when the costs were already rising,” he said, adding that the magnitude of 2011’s rising commodity prices won’t be reflected in product pricing until spring to summer of 2012.

Particularly strong categories across the board include statement items, bridal jewelry and timepieces.

Tiffany & Co. continues to perform well with high-end jewelry, and designer jewelry offerings have also seen a substantial increase in the third quarter, helped by the introduction of Paloma Picasso’s Venezia collection, according to Wu. He said “innovation and exclusive design,” such as the Tiffany Keys collection (which remains a top seller) and the Tiffany Locks line, which launched earlier this year, has resulted in strong demand from customers.

Wu added that Cartier and Van Cleef & Arpels have both seen a surge in sales this quarter, listing higher-end jewelry and timepieces as instrumental in their growth. The former’s Sortilege collection and the latter’s Les Voyages Extraordinaires lines — which both launched this year — have been well received. Cartier maintains that its Ballon Bleu range is its most successful watch line to date, and Van Cleef’s watch sales were driven by the Charms Mini line, which features the brand’s signature Alhambra motif dangling from the face of the timepiece.

Linda Fargo, Bergdorf Goodman’s senior vice president, fashion office and store presentation, has seen a resurgence in charms as a trend with holiday shoppers. She cites new resource and London-based designer Annina Vogel as being popular for reworking vintage charms and chains into modern silhouettes. She deems it a strong seller “because you can pick specific and relevant charms and create a very personal gift.”

Fargo said earrings are the best-selling classification at every price point, listing Paul Morelli’s confetti diamond hoops and Ted Muehling’s Queen Anne lace earrings as “perennial favorites” at the retailer — but it is Kimberly McDonald’s geode earrings that she labels as a “must-have” because “they transition easily from day to night and add sparkle for the holidays.” The in-store Lorraine Schwartz boutique, which opened in late August, has surpassed sales expectations, giving the store a platform to showcase higher-end jewelry, which Fargo said has resonated well with shoppers.

In addition to all colors of gold and white diamonds, a mainstay for the retailer, customers are drawn to blue and green stones — with a recent interest in paraiba tourmalines, a rare stone known for its bright blue or blue-green color, according to Fargo.

At Saks Fifth Avenue, Cody Kondo, senior vice president and general merchandise manager of accessories, has found the same to be true. Diamonds are “always popular,” but it’s silver with colored gemstones — including labradorites and jade — that is increasingly popular. He said, in addition to bold colored necklaces, bangles and earrings have been one of the strongest categories since the holiday season kicked off last month.

Two-tone necklaces and gold architectural earrings have done well, as has a recent sapphire collection featured in the retailer’s trunk shows. Ippolita’s earrings — including the sterling silver Wonderland Crazy 8’s that have a trio of moss-colored, faceted quartz crystals and a pair of 18-karat gold Lollipop drop earrings with garnets — are among the store’s bestsellers.

Ippolita has opened four shop-in-shops in Bloomingdale’s locations in New York, Boston, San Francisco and Bal Harbour since October, with plans to open 20 more in the coming year. Its Lollipop earrings in assorted colors (in both gold and silver) are bestsellers, said chief executive officer Joe Cavalcante. These range from $295 to $3,000 in price and some of the most popular color gemstones include blue topaz, mother-of-pearl, clear quartz, turquoise and onyx. “Customers are buying more bangle sets, which is great, as this is how the brand is meant to be worn. We curated sets this holiday season exclusively on our Web site, but customers have gotten inspired and have been making their own creations,” Cavalcante said, calling this the “It” item of the season — whether in silver, yellow or rose gold — and containing hand-faceted Brazilian amethysts or peridots.

He added that while self-purchases might drive the business, he’s definitely seeing an influx of men buying jewelry for gifting, particularly earrings in a variety of metals and colors. Fargo has seen the same at Bergdorf Goodman.

At De Beers, which has 60 freestanding stores worldwide, ceo Devon Pike has noticed something different with respect to holiday gifting. “Women are not only empowered to buy for themselves, but they are showing up and influencing the gifting. It’s very clear that a woman’s fingerprint is on the gift that’s being purchased for her this holiday season,” Pike said.

Among these gifts: stackable rings that range from $750 to $6,100 each and the Enchanted Lotus Band, a $6,200 ring that’s available in entirely white diamonds or a combination of white with pink diamonds, which launched in fall 2010.

“In our world, we have an interesting sweet spot for product that’s between $5,000 and $10,000. It’s very affordable when you consider the lifetime value you’re getting,” Pike said.

Although white diamonds remains the strongest category for De Beers, the brand has concentrated on increasing its color offerings for a while, Pike said. She noted that there’s been a warmer-than-expected reception to the introduction of black gold within the brand’s collections, and that there’s been a “nice adoption” of yellow diamonds. However, it’s pink diamonds that customers are gravitating toward — in the first week of December alone, three pink diamond rings were sold.

Black diamonds are strong sellers for Ivanka Trump Fine Jewelry, which opened the doors to its SoHo flagship in New York last month. According to ceo Andrea Hansen, black diamond drop earrings were one of the first items to sell out, and diamond hoops in black and white diamonds have also been popular with shoppers.

Buccellati’s Macri bracelets — adorned with rubies, sapphires and emeralds — are among the fine jewelry brand’s best-selling items, along with the $17,500 Eternelle ring, a handcrafted, engraved piece with precious stones, according to ceo Alberto Milani.

At Mauboussin, white gold has consistently been a top seller since the brand opened its first Stateside boutique on Madison Avenue in 2008. Pieces from the Premier Jour collection have been in high demand — and an $875 white gold ring with a row of diamonds has been a “steady bestseller,” according to chairman Alain Nemarq.

He noted that the launches of several moderately priced collections this year — including 18-karat gold and Swiss made watches with mother-of-pearl and diamonds in the $400 and $500 ranges — have allowed the brand to gain market share, increasing sales from the same time last year.

At luxury e-tailer Net-a-porter, buying director Holli Rogers hasn’t seen any price resistance with respect to fine jewelry this season.

“Some of the highest-priced items [are] going first, in fact. We have sold out of some of the most precious pieces from Ileana Makri and Diane Kordas, but at the same time we are finding strong sales of collectible items from Solange Azagury-Partridge for every day,” Rogers said of Kordas’ $1,515 18-karat gold diamond ring and Makri’s $3,295 eagle feather 18-karat gold and diamond necklace — both of which have since sold out.

Faraone Mennella co-founder Amedeo Scognamiglio said yellow gold continues to “fly” off the shelves, driven by the spiralling price of the metal. “When gold prices are through the roof, it’s always the all-gold pieces [that] sell. Gold jewelry becomes an investment again and an asset. Our stubbornness in keeping the gold production has proved successful.”

The signature Stella chains and Contessa necklaces both sold out at Bergdorf Goodman, Neiman Marcus and at the brand’s own stores.

“We are still so busy with many trunk shows around the country, and have none to show to our clients, our most signature style,” Scognamiglio said, adding that diamond pavé is also strong within the collection, and in high jewelry, there’s been an increased demand for emeralds.

 

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