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Home / New Zealand

Jewels shining through gloom

Reuters
13 Jun, 2008 05:00 PM5 mins to read

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KEY POINTS:

Well before the store opens, a window-cleaning van arrives to ensure gleaming windows set off the sparkle of diamonds. A pair of burly guards, in black suits and earpieces, take their places.

Britain's retail summer may looking like a washout, Wimbledon strawberries may be prohibitively pricey and fuel
for the four-wheel drive might be stretching some budgets - but on Bond St, jeweller Graff is ready for the season.

As the mega-rich get richer, Graff and stores like it in the chic Mayfair district in London's West End - Leviev, Moussaieff, Harry Winston and Chatila - stand out as the premier location for jewellery shopping.

"People with new money want new treasures," said Fiona Spence, marketing manager for Graff, established in the heart of Mayfair in 1994 as a powerhouse of exclusivity and with clients including Oprah Winfrey, retail billionaire Philip Green and real estate mogul Donald Trump.

Bond St was named after Sir Thomas Bond, devoted follower and close friend of King Charles II - a hedonistic monarch whose 17th-century reign brought the rise of colonisation and trade in India, the East Indies and America.

It still attracts royalty and its fame is legendary. For precious jewels, antiques and works of art, fashion and the accessories of gracious living, its shops are unsurpassed.

Today, Bond St is a litmus test of the fortunes of the world's seriously wealthy, as jewellers say non-British buyers account for more than three-quarters of its turnover in fine jewellery.

After the credit crisis, some wealth in real estate and investment banking is slackening, jewellers say. But demand is being fed by a fast-growing entrepreneurial elite from the emerging markets, including those who control valuable natural resources, such as Russia's richest men Oleg Deripaska and Roman Abramovich.

June to September is when Arab families head to Mayfair hotels, to escape the searing heat at home and to shop for brands and watchmakers including Asprey, Bulgari, Tiffany, De Beers, David Morris, Patek Philippe and Rolex.

Graff, which has 30 stores worldwide, has about 60 per cent of the global market share in yellow diamond jewellery.

Its windows are resplendent with dazzling combinations of yellow and colourless diamonds and pieces featuring huge emeralds and rubies.

Founder Laurence Graff is well known for buying some of the best stones. At a Sotheby's auction in Geneva in May, he paid 5.2 million Swiss francs ($6.63 million) for a pear-shaped 3.73-carat blue diamond, setting a record price per carat for any gemstone.

His confidence in the sum suggests reports of a slowdown are premature or that the global super-wealthy are immune.

Across the road from Graff, visitors to Alisa Moussaieff's store are still shelling out dizzying prices for the rarest gemstones in the world.

If shops selling such indulgences to the world's mega-rich are feeling the pinch at all, it is on the side of supply, not demand: "If more people chase fewer goods, you've got to pay for it," she said.

Marwan Chatila, at number 22, said about the jeweller's sales to Middle Eastern clients happened between June and September.

"This year we were expecting a slowdown, but it hasn't happened," he said in his boutique.

Retail prices at Chatila can range from £1000 ($2632) to £5 million.

Bond St is also home to Bentley & Skinner, which specialises in antique jewellery, Faberge and silver.

The jeweller, formerly known as Bentley and Co, is one of Bond St's oldest residents; it's been there since 1934.

Russian antique jewels are prized items as Russians buy back their pre-revolutionary heritage.

On a recent visit, Bentley & Skinner's Faberge stock was almost sold out to newly rich Russian visitors.

"We have Russian jewels - and Faberge. This draws the Russian customers in. We have been getting more Russian customers in the last 18 months," said Stanley Lester, senior sales representative.

Seated in Bentley & Skinner's cosy salesroom guarded by a man in full dress uniform, he demonstrated a Faberge thermometer from the turn of the 20th century, available at £150,000 and a pair of Faberge cufflinks in white enamel and diamonds, on offer for £79,000.

But there are signs of belt-tightening:

"People are not having their repairs done as much - or having their pearls re-strung," Lester said.

Until the credit crisis, London was probably outgunning Wall St as a financial centre, because of attractive tax incentives for super-wealthy non-domiciled investors, less regulation, and its location.

London's investment bankers, advising on takeovers and flotations of companies to generate new wealth in emerging economies like China and India, have since trimmed their sails.

Global mergers and acquisitions fell 22 per cent to US$861.2 billion ($1159 billion) in the first quarter of 2008, the lowest first-quarter tally since 2005, according to data provider Dealogic.

"In the last six months there has been a drop in sales to City people," said Chatila.

Americans, hard hit by the weak US dollar, are also becoming a rarity.

"The Americans have been very few and far between," said Lester.

- REUTERS

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