The fall jewelry auction season in New York is under way — with five weeks left until what’s been described as the “most polarizing U.S. election in history.”
But despite such uncertainty — jewelry department leaders at Sotheby’s and Christie’s say — politics, American or global, aren’t to blame for the slowdown in white diamond valuations and a diminished interest in midrange jewelry categories.
“I think both [political] parties have plenty of people who can afford plenty of jewelry,” said Frank Everett, senior vice president and jewelry sales director of Sotheby’s, where the Sept. 22 Important Jewels sale failed to move just over 30 percent of its lots. “Maybe people spend a little less [in the lead-up to an election] but I really don’t think that had an impact. It might have an impact on the retail world, but the collectors know they have to come to the table when a piece becomes available.”
Everett cited a cocktail of circumstances — currency shifts, time of year — as the culprit for the sale’s less-than-stellar performance.
Sotheby’s Important Jewels sale realized $8.6 million against a presale estimate of $10.4 to $13.9 million. Its priciest lot — a 27.35-carat white diamond ring, estimated at up to $2.5 million — did not sell. The lot’s failure to find a buyer could be indicative of a continued tepid interest in white diamond stones.
“In terms of auction, I think what makes it fun and exciting and a little bit dangerous is that you never know who will turn up on a given day,” Everett said of the lot. “It depends on the market, a diamond like that is always going to attract a really certain type of bidder. You can’t sell it with only one bidder. The price was right but it wasn’t the right time for that piece in terms of the diamond market,” he added.
The flagship lot of Sotheby’s spring Magnificent Jewels sale, a 9.54-carat fancy deep blue diamond that once belonged to Shirley Temple, also did not sell. The lot was expected to bring between $25 million and $35 million.
In contrast to this week’s auction, the Important Jewels sale in September 2015 took in $18.4 million against an estimated $20.6 million to $27.2 million. Just over 34 percent of its lots did not find buyers.
Despite these misses, Everett said: “Colored stones continue to command great prices.” Rare signed jewelry designs of important historical provenance also continue to perform well. Everett pointed to a molded glass and enamel ring by Lalique — which this month was conservatively estimated at $15,000 but took in $322,000 — as an example of that market success. The piece included no precious stones in its design.
Tom Burstein, senior vice president, Americas for Christie’s jewelry department, which will hold its own Important Jewels sale on Oct. 18, said: “Knowing the current market, we are paying very close attention to pricing.
“The only thing that could be election related is maybe reluctance from some consigners to offer jewelry for sale because of a perceived [hesitant] outcome. We are not pricing lots differently.”
As Burstein prepares Christie’s for its fall sale, he expects white diamond values to remain stagnant. Recently, Burstein took a handful of the department’s diamond reserves and estimated that their value had increased by 60 percent between 2006 and 2011. The same stones grew only an estimated 4 percent in value from 2011 to now.
In the case of white diamonds “there is not enough demand to push a lot of growth. I don’t expect any price increases in the near future,” Burstein said.
While the stones are a cultural bedrock for the bridal industry, they have reached maturity in the global collecting sphere, he explained.
“In certain parts of the world, there was a very high demand for perfect diamonds, excellent cut grade and polish and symmetry — a lot in the Asian market. A lot of those collectors have those stones now, so it will really need to wait until the new wave of collectors comes along,” said Burstein.
Flawless stones are now less preferred to larger stones of fine, but lesser quality. “The difference in how they appear is imperceptible — people are not willing to pay super strong high prices for beauty that doesn’t translate when wearing it,” said Burstein. “It’s about the priorities — a combination of weight and quality — first you want to get to that weight, and then get the best possible quality.”
Burstein concurred with Everett that fancy colored diamonds and colored stones continue to perform. “There isn’t reluctance even with iconic signed jewelry,” he added. He noted that the middle market has taken a hit — particularly unsigned pieces.
While economic factors — including the British pound’s post-Brexit decline — have leeched a cautiousness onto the collecting environment, Burstein does not feel that the U.S. election outcome will widely influence jewelry collecting culture.
“I think regardless of who wins, I don’t think that plays a role so much. Information is already built into the auction market, the stock market. Nothing drastic happens overnight and at the end of the day we are dealing with collectors who feel that, ‘I have this jewelry that, for centuries, has been a liquid, tangible outlet.’ If someone is looking for some growth to happen, it doesn’t occur that quickly either way.”