Virtual Consultation
By Leibish Polnauer, President & FounderAn antique Persian rug fetched USD34 million at the latest Sotheby’s auction. First I chuckled at the news, 34 million for a carpet? I was looking at our 0.34 carat fancy vivid pink round Argyle diamond that we have for sale at USD95,000 and thought it seemed perfectly reasonable to me. Only, perhaps we are in the wrong business – maybe we should be selling carpets?
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0.34ct Fancy Vivid Pink Diamond |
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A 0.17ct violet dream Argyle diamond |
What makes people fork out so much money for a carpet? Is it maybe a flying carpet? Rio Tinto could probably use the carpet to fly around the world and detect new diamond fields.
Rio Tinto recently announced, just as our GG GIA was visiting Argyle for the mini tender, that they changed their mind and they are not going to sell their diamond operation. They probably saw how much money Shmulik offered for their Argyle pinks in the mini tender.
Following is their official announcement: "The medium to long-term market fundamentals for diamonds remain robust, fuelled by growing demand for luxury goods in Asia and continuing strong demand in North America. We have valuable, high-quality diamonds businesses that are well positioned to capitalize on the positive market outlook."
We still buy pink diamonds at crazy prices, so we convinced Rio Tinto to stick to diamonds – rather than diversifying into carpets or expanding their iron ore operations.
As I commented a year ago in a LEIBISH press release about Rio Tinto’s dramatic announcement that it would sell all their diamond operations and concentrate on iron ore:
"The old Chinese proverb say it all, the first rule of warfare is deception. "Rio Tinto is not going to sell off their diamond business as many concluded after their latest reports. The company will allow 25%-30% of their stock to float in the market similar to what Chow Tai Fook did.
The inflow of ‘fresh cash’ for pink diamond mining will temporary be interrupted, and prices of Argyle stones will soar. The decreasing investment in diamond exploration will result in a reduction of the supply of rough stones. However, since market demand remains strong, with less rough available, the prices of polished goods will go up."
A four room Florida condo facing the ocean can be bought for USD400,000, but an early, insignificant Picasso was sold last week for USD18 million. There is no shortage of condos on the market, however exceptional items are flying high. Records are broken week after week for impressionist art and fine diamonds. Everyone is seeking the ultimate in beauty and perfection.
To think, even after the dynamic price increases over the years, yellow diamonds are still undervalued.
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A 2.03-carat Fancy Intense Yellow cushion-shape diamond. A perfect canary diamond with with excellent polish and excellent symmetry. A stone with GIA Flawless clarity. |
Diamond prices still have a long way to go. In fact, some stones still trade at the same prices they were traded 25 years ago.
When clients ask me to recommend what to buy for their money, I always tell them to go for the best only. As I recall the statement I read some 30 years back in the office of Stone Brothers in Manchester: The joy of a bargain fades fast, but the bitter disappointment about pure quality remains for a long time. Better to overpay for a fine, perfectly cut pink diamond with super color than to get a “bargain” with an inferior stone.
Amazingly, nearly 75% of our sales are made over the Internet to clients who buy a stone or a ring, sight unseen. It’s hard to believe that we sell items for in excess of half a million U.S. dollars without a face to face meeting. Even more so, with that being the case, 75% of our customers are repeat business. Somehow we manage to live up to the expectations of our customers irrespective of where they are located.
This year we have been selected for a second time as a finalist in one of the categories of the JNA Awards. We were nominated this time for the best E-Tailer of the Year, up against Chow Tai Fook.
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LEIBISH was nominated as one of the three contestants competing for E-Tailer of the Year in the JNA Awards 2013 |
He has USD8 billion (that’s billion with a “b”) and over 1,000 bricks and mortar stores in China alone. How can a mouse beat a great dragon?
Size matters, however with a virtual business to be small is an advantage. The big overheads of giant corporations bites into their profits and makes their product offerings expensive.
The perception of LEIBISH is very big. However, we are actually a small modest company. Only, we occupy an important place in the virtual world - a company of the 21st century.
