Is The Bad Economy Tarnishing Gem Show?
ARI SHAPIRO, host:
The depressed global economy is taking some of the luster off the gem business. Every February people from around the world converge on Tucson, Arizona to buy and sell gems of all kinds. The city hosts huge trade shows and NPR's Ted Robbins paid a visit to one.
TED ROBBINS: If you are easily distracted by sparkly objects, this is no place for you. Ninety thousand square feet of booths filled with…
Mr. CHARLES HUCKER (American Gem Trade Association): Rubies, emeralds, sapphires.
ROBBINS: And every other gem mined on earth. That's Douglas Hucker, CEO of the American Gem Trade Association, which sponsors this show. Walk down any aisle and you'll see bowls filled with uncut gems, trays filled with cut stones, and displays of finished rings, bracelets, necklaces. In fact, the goods on the floor of the Tucson Convention Center are so valuable, when a fire alarm went off the other day no one left.
Mr. HUCKER: Here on this floor you can see gemstones that are million dollar gemstones and you can see gemstones that are, you know, a nickel, a quarter a piece.
ROBBINS: This is the center of the global gem trade. Another valuable commodity is traded here too: information. For instance, who knew even China's jewelry industry is in deep contraction?
Mr. ERIC BRAUNWART (Columbia Gem House): When Chinese New Year's ends and all the workers come back into the factories on the West Coast, we're expecting a third of those factories to be gone.
ROBBINS: That's Eric Braunwart, an open, friendly man who talks with me at his company's booth, the Columbia Gem House from Vancouver, Washington. The company mines, cuts and markets fair trade gems. Traditionally, this is where prices and fashion trends are set for the coming year. But with the unstable economy, who knows how long prices will hold.
Mr. BRAUNWART: It really is a worldwide business. And when we're talking here and pricing here, we're really pricing in Dubai, Cape Town, you know, Jaipur and Hong Kong all at the same time.
ROBBINS: Are values going up or down or…
Mr. BRAUNWART: I don't know. It changes so fast I can't tell right now.
ROBBINS: Most people buy gems and jewelry for weddings and anniversaries or for fashion. Like most retail sectors, those sales have been down. Traders are also cutting back and looking for bargains. Mohammed Arais's(ph) company had a booth here for 20 years. This year to save money only he and a colleague came. Arais is a jewelry manufacturer in Hong Kong who needs gemstones for inventory.
Mr. MOHAMMED ARAIS (Jewelry Manufacturer): Actually, I must buy less than 20 percent from the regular price, but I could not find.
ROBBINS: Are you buying more or less this year than you have in past years?
Mr. ARAIS: Less, much less.
ROBBINS: It takes capital to buy inventory, of course. And like many other industries, gem dealers say it's hard to get banks to extend credit lines to keep business going. But one segment of the gem trade appears to be strong: big, rare or unusual stones for investment. Eric Braunwart shows me one.
Mr. BRAUNWART: Stones like this ruby here, that's a very exceptional, non-treated fair trade ruby, very well cut.
ROBBINS: The five carat ruby is from Malawi. It's set in a ring surrounded by diamonds. The tag says $40,000 wholesale. Braunwart says it's the sort of stone people are buying to diversify away from stocks and bonds.
Mr. BRAUNWART: People are looking at it and they're saying, you know, are we better off putting it in a very rare ruby or gold or something like that.
ROBBINS: Gold, though, is a commodity bought and sold by the ounce. If you're going to buy gems for investment, you'd better know what you're doing. And if you do, maybe you'll sleep better with that rock under your mattress.
Ted Robbins, NPR News, Tucson.