Category analysis: Hooked on colored stones

Expect high prices for top goods, watch for treatments in lower-quality gems.

By Teresa Novellino

Colored gemstone jewelry is a money-maker, yielding median gross margins of 52.5 percent (better than diamonds’ 48.9 percent), finds the 2009 Jewelers of America Cost of Doing Business Report. But selling them is the trick.

To download our category analysis of gemstone jewelry designs, click here.

Price points

Prices for ruby, sapphire and emerald in “commercial” and “good” quality ranges are down, and demand is fairly soft, says Stuart Robertson, research director of Glenview, Ill.-based Gemworld International, which publishes The GemGuide. But expect to pay top dollar for “fine” and “extra fine” quality grades of all three, especially ruby, and to a lesser extent blue sapphire, due to the recession and lighter production in key gem areas such as Myanmar (Burmese rubies that were not here before the ban remain off-limits for U.S buyers) and Madagascar, he adds.

Treatment issues

Good Morning America
viewers might have been startled by a November 2009 investigative report on glass-filled rubies, but Tucson gem show regulars sure weren’t.

Robertson says the glass-filling treatments are an issue in most commercial grade rubies and some “good” grade rubies. Some gem dealers are avoiding them altogether. Experts say that retailers must disclose to consumers that these inexpensive rubies need special care: household chemical exposure should be avoided, and stones must be removed for repairs.

Marketing developments

While jewelers can easily tell a sapphire from an aquamarine, most consumers cannot. Enter an in-case display system crafted by Pacific Northern Display and the American Gem Trade Association (AGTA), which debuted in Tucson and identifies gemstones by name.
 
AGTA has also licensed the “CIBJO Retailers Reference Guide,” a compact reference book with details on colored stones, diamonds, pearls and precious metals. It is free to AGTA members and $100 for non-members.

Editor’s note: This story first appeared in the February 2010 print edition of National Jeweler.

Courtesy of: National Jeweler 

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