Emotional Assets | Management & Research

Jewellery for cash at record rates

Jewellery is often sold for cash during an economic downturn and the Madoff scandal has only intensified this trend. The number of people selling jewellery for cash now versus the slowdown of the 1990’s could be 10 times higher. Consigners suggest that more commercial items be put up for sale first, for example, Rolexes, Cartier watches and Tiffany bangles. Despite the need to sell, collectors are obtaining good prices for jewellery, especially for certain designers and eras. For example, 1960s and 1970s David Webb pieces and Bulgari jewellery from the 1960s and designs by Jean Schlumberger, who worked for Tiffany & Co. during the 50s, 60s and 70s, are all selling for top prices.

The jewellery auctions as of late have had considerable success. Christie’s held their fifth Jewels and Watches auction in Dubai in April 2009 which sold 76% by lot and 69% by value and raising a total of $4 million. Sotheby Geneva’s Magnificent Jewels sale on 12th May 2009 was a success, selling 76.9% by lot and 91.3% by value. The highlight of the sale by far was the 7.04 carat diamond that sold for $9.48 million.

Christie’s "Jewels: The New York Sale" that took place in April 2009 surpassed its estimate of $15–20 million by bringing in a total of $19,293. The auction was a success, selling 85 per cent by value and 84 per cent by lot. The highlight of sale was this pear-shaped D, Internally Flawless 30.02 carat diamond, which sold for $4,002,500. Sotheby’s “Magnificent Jewel” sale, also held in April, was less successful, raising $11 million and selling 68% per lot and 55% by value.

Christie’s Images Ltd. 2009

During this economic crisis collectors are looking beyond the typical size and weight of their gemstones and focussing more on design and provenance. People are stepping away from the large white diamonds and are choosing more subtle pieces, such as brown diamonds. According to Chopard’s Caroline Gruosi-Scheufele, "In times of crisis, it is always safe to invest in stones as they will never depreciate in value. However, a stone is nothing without a good quality design to accentuate its true form, clarity and colour”. Alisa Moussaieff, owner of the Moussaieff brand, concurs: “Rare important gemstones with beautiful design are the best long-term investment pieces.”

Jewellery, like art and other Emotional Assets, is in increasing demand from the newly-rich of China, India and Russia. Auction houses are expanding beyond Europe to the Middle East and Asia, where high quality pieces are in demand. Christie’s and Sotheby’s together account for 90% of the world jewellery market and both have traditionally focused their sales efforts on Geneva, London and New York.

However, there is a shift in focus to other markets further East such as Hong Kong and Dubai. Christie’s began holding sales in Dubai in January 2007 and had a large showing of jewels at the 3rd Annual Modern & Contemporary Arab, Iranian & Turkish Art held at the Emirates Palace Hotel in Abu Dhabi in October 2008. April 2009 will see a sale for Sotheby’s in Hong Kong and for Christie’s in Dubai. These will be good indications of how these markets are holding up in the light of the current economic situation.

Last year’s sales in the Asian markets were not hugely successful with Sotheby’s Magnificent Jewels & Jadeite sale in Hong Kong in October 2008 selling only slightly more than half the lots on offer.