Next Marilyn sought to sell emeralds over diamonds
Ian Harebottle is searching for a global celebrity to do for emeralds what Marilyn Monroe and Audrey Hepburn did for diamonds.
The chief executive officer of Gemfields Plc, the biggest producer of the green stones, said he wants "to bring in an A- lister to be the face of emeralds," mirroring what the actresses did in past decades that helped then-monopoly producer De Beers sell diamonds as symbols of lasting love. Clear gems still dominate today's $21 billion precious stone industry.
Rarer than diamonds yet cheaper, emeralds are gaining among consumers. At current growth rates they may take more than 20 percent of their competitor's market share within two decades, according to the trade group the International Diamond Manufacturers Association. Gemfields' share price has gained 78 percent this year.
"Sometimes rarity is not an asset," Harebottle said in an interview. "You need the volumes of supply, which is what we're doing."
Harebottle's strategy, from buying African ruby and emerald mines to leveraging iconic names, is supported by Brian Gilbertson, ex-CEO of the world's largest miner, BHP Billiton. Gilbertson heads an investment fund that licensed the Faberge brand name to London-based Gemfields and bought a controlling stake in 2007.
High-quality emerald prices increased more than 10-fold in the past three years, out pacing a 21 percent gain in diamonds, according to calculations based on Gemfields and WWW International Diamond Consultants Ltd. data. Still the red, green and blue stones comprise just 10 percent of global gem sales and lack standardized pricing.
A 0.9 carat round diamond that's internally flawless and of rare white color would cost about $7,000, according to online retailer Blue Nile. A round emerald with "excellent clarity" of the same size would cost about $3,500, according to Africa Gems, an online retailer of the stones.
Gemfields' market value increased to about 140 million pounds ($225 million) this year as prices increased for its Zambian output. That's where it owns 75 percent of the Kagem emerald mine, the world's largest. It also has 75 percent of the Montepuez ruby field in Mozambique. The biggest investor is the Rox unit of Pallinghurst Resources, a Guernsey, Britain-based fund that invests in natural resources whose chairman is Gilbertson. Rox owns 63 percent of Gemfields.
The company lacks the heft of the 20th century De Beers model, in which a single firm mined, marketed and largely controlled wholesale prices. Colored stones are a fragmented industry that's largely supplied by individual miners — sometimes parents and children — across about 10 countries.
At the same time it has benefited from singer and clothing purveyor Jessica Simpson, actress Halle Berry and the Duchess of Cambridge receiving engagement rings containing colored stones.
Global imports of rough emeralds, rubies and sapphires totaled about $2.2 billion in 2011, according to the United Nation's Comtrade data. Rough diamond sales totaled about $18.9 billion, according to BMO Capital Markets research.
"During the past three years, these other gemstone categories have taken away yet another half percent from our market share, of our display space, of our sales in the jewelry retail shops," Moti Ganz, president of the diamond manufacturers group, said in a speech at the World Diamond Congress on Oct. 15.
De Beers dropped so-called generic marketing of the stones when its monopoly was ended after losing a 10-year legal battle with the United States over price-fixing in 2004.
Polished diamond prices have declined for five straight quarters as Asian purchases slowed and the euro region debt crisis eroded demand, according to PolishedPrices.com data. Rough, or uncut, prices have fallen for the past two quarters and are heading for the first annual decline since 2008 after rising by more than 20 percent in each of the past three years.
The colored gem market was about equal in size with the diamond industry in the 1940s. Generic marketing is where participants buy advertising that benefits them all — such as the "Got Milk" campaign in the U.S. for the dairy industry.
De Beers, the world's biggest producer, created the industry and developed the "Diamonds are Forever" tagline that was voted as the best slogan of the 20th century by Advertising Age. Monroe's recording of "Diamonds are a Girl's Best Friend" and Hepburn's "Breakfast at Tiffany's" film helped cement an allure in consumers' minds, spurring a boom in demand and prices that were underpinned by cartel.
While the growing popularity of colored gems is reflected in the shop windows on London's Bond Street, diamonds are still the first choice of consumers who are better educated about the stones.
"Colored stones are mainly bought by more experienced customers who already have diamond pieces," said Richard Campbell, whose family runs the jeweler Lucie Campbell on New Bond Street. "It's incumbent on the buyer to have confidence in the jeweler or their own knowledge."
Lucie Campbell's display is dotted with emerald, ruby and sapphire jewelry, including the shop's most expensive piece, a pair of 22.45 carat and 21.66 carat emerald earrings set in platinum and surrounded by diamonds. The display carries no prices.
- 1 Three of Pope Francis' relatives die in Argentina car crash, including two young great-nephews
- 3 Reading Festival 2014: Tesco branch replaces salad with Jager and potatoes for vodka as campsite opens tomorrow
- 4 Here’s the damning letter Robin Williams wrote to his Mrs Doubtfire co-star's principal after they expelled her
- 5 Ferguson protests: 90-year-old Holocaust survivor Hedy Epstein ‘arrested’ by police during St Louis demonstrations
Syria conflict: President Assad finally turns on Isis as government steps up campaign against militant strongholds
Michael Brown shooting: Amnesty International sends team within US for first time as National Guard deployed
Iraq crisis: Islamic State's message to America - 'We will drown you all in blood'
Ferguson: In the heartlands of America, a descent into madness
Celebrity Big Brother 2014: Audley Harrison meets Kellie Maloney: 'Was Kellie really the best you could come up with?'
Isis threat: Cameron wants an alliance with Iran
Crisis? What crisis? A visiting US doctor gives the NHS a rave review
Ukip MEP calls for reintroduction of death penalty on fiftieth anniversary of last deaths
Russell Brand calls for Israel boycott: Comedian urges big businesses that 'facilitate the oppression of people in Gaza' to pull funding
Michael Brown shooting: Chaos erupts on the streets of Ferguson after autopsy shows teenager was shot six times – twice in the head
World peace? These are the only 11 countries in the world that are actually free from conflict
£30000 - £44000 per annum + Bonus+Benefits+Package: Harrington Starr: Web deve...
£40000 - £65000 per annum + benefits+bonus+package: Harrington Starr: Senior A...
£35000 - £45000 per annum + benefits+bonus+package: Harrington Starr: Web deve...
£30000 - £40000 per annum + benefits+bonus+package: Harrington Starr: ETL Deve...