Gemstones & Pearls/News
Carpe Diem with Cultured Pearls
Supplies are abundant and prices are good some say too good so seize the day with cultured pearls
Cultured pearls are nothing short of a great opportunity today. Abundant supplies in many categories provide more choices than ever, and prices are plummeting just as consumer appreciation for pearls is soaring. Retailers are sitting in the midst of a pearl revolution and, to quote Shakespeare, they should take the tide when it serves or forever loose their ventures.
Its best to enter the pearl arena fully informed because the cheery news comes with some cautions. Some pearl categories have been so abundant for so long, experts use terms such as dumping or overproduced to describe their presence in the U.S. market. If the situation continues and you slash prices to remain competitive next year, youll anger customers who pay full price this year.
But the market is beginning to stabilize, counters Armand Asher of Albert Asher South Sea Pearl Co., New York City. He cites Tahitian cultured pearls as an example. Secondary sales opportunists entered the market in recent years, and the quantities and qualities of product being sold forced down prices and squeezed profits, he says. But Tahiti has adopted new regulations to stabilize the market (for details, visit www.professionaljeweler.com and type Tahiti Acts to Support Pearl Market in the Search box or see the Gemstones & Pearls section of our October issue). Those who entered the pearl business on a whim are now falling away, leaving behind the more knowledgeable and established dealers.
The China Syndrome
China, which a decade ago hardly figured in the pearl scenario, is now the main producer of cultured freshwater pearls, a product that has cut into sales of other categories, especially the revered Japanese akoya cultured pearls. It seems the Chinese could grow pearls in almost any small puddle, and they did, says Avi Raz of A&Z Pearls Inc., Los Angeles, CA.
Raz, who carries a line of top-notch Chinese freshwater pearls along with his other inventory, puts the situation in perspective: There is ample supply of low-quality stuff. But in the top qualities, its still challenging to get a really decent strand. Recently, he looked through some 15,000 strands of pearls before selecting one really good one to add to his inventory.
While Tahitian and Chinese sources revved up production to unprecedented levels in the past decade, Japans pearl farmers watched their production fall by half because of mollusk viruses and pollution. Now the economy in Japan has to be factored in also, says Raymond Mastoloni Sr. of Frank Mastoloni & Sons Inc., New York City. While demand for fine-quality akoyas remains high worldwide, Japanese consumers have cut back on their once-huge purchases, hampering recovery of the akoya market.
On the positive side, Japan instituted new isolation methods and mollusk hybridization with Chinese akoya mollusks to decrease the chance of viruses and increase yields. The techniques have met with generally positive results, says Devin Macnow, executive director of the Cultured Pearl Information Center, New York City. Meanwhile, new competitors in the South Seas arena have arisen or will soon arise in the Philippines, Indonesia and Myanmar.
To save its position in the pearl world, Japan has become a major buyer of South Sea and Tahitian cultured pearls. In fact, South Sea and Tahitian cultured pearls now account for 40%-60% of Japans pearl exports.
While many dealers wring their hands about the undersupply of Japanese akoyas and the oversupply of Chinese freshwater and Tahitian cultured pearls, the story has been a lot more interesting for retailers. A strand of good color, lightly spotted 11mm-15mm Tahitian cultured pearls that once sold for $20,000-$25,000 is now $7,000-$8,000, says Raz.
The affordability of pearls from China, Tahiti and other South Seas locations has made them accessible to a much wider range of consumers. In fact, cultured pearls now account for an estimated 5%-7% of jewelry store sales, up from 2%-3% several years ago, says Macnow. Weve had eight consecutive years of growth, he adds.
Consumers also are looking at more than round, white pearls, says Stuart Robertson, research director at Gemworld International Inc., Northbrook, IL, which publishes The Guide. Chinese freshwater cultured pearls have captured consumers interest with their array of pastel colors. Tahitian cultured pearls, which even in flawed lower qualities exhibit peacock, magenta, aubergine and pistachio hues, also attract attention.
In addition, developments in the culturing of unusual mollusks including the abalone in New Zealand, Australia and the U.S. provide designers with intense, metallic-looking blue to green pearls, such as in the bracelet on the cover of this issue by designer Paula Crevoshay, Mellika Co. Inc., Albuquerque, NM. I began with the Empress Abalone series a few years ago, and its hard to keep in stock. This product appeals to baby boomers who are looking for individuality. The wonderful orient and colors remind me of iridescent insect wings, and those shades of blue and green work perfectly with high-karat gold.
The ability to distinguish the different cultured pearls available from all these sources and to understand their quality factors are big issues for jewelry retailers. Mastoloni, who is also president of the Cultured Pearl Association of America, says his organization recently opened its doors to associate retail membership. With the pearl world becoming so complex, we decided education of retailers and their sales forces is crucial, he says. Knowledge about pearls gives a store credibility and gives the consumer confidence in what he or she is buying. Membership in the association gives retailers access to the CPAA Web site and to consumer brochures on pearls.
- A&Z Pearls Inc., Los Angeles, CA; (800) 732-7572.
- Albert Asher South Sea Pearl Co., New York City; (888) ASHER-77.
- Cultured Pearl Association of America, New York City; (212) 255-6875.
- Cultured Pearl Information Center, New York City; (212) 688-5580.
- Frank Mastoloni & Sons Inc., New York City; (800) 347-3275.
- Gemworld International/The Guide, Northbrook, IL; (847) 564-0555.
- King Plutarco Inc., Los Angeles, CA; (213) 624-3077.
- Mellika Co. Inc., Albuquerque, NM; (505) 898-2888.
- Kings Ransom, Sausalito, CA; (415) 331-2650.
by Robert Weldon, G.G.
|Cultured Pearl Choices at a Glance
Australian Cultured South Sea Pearls
What to look for: Fine matched white pearls measuring 14mm-15mm cost less than usual. Larger sizes of high quality cost more. Golden colors sell well in specialized markets.
Availability: The Australian government maintains tight control on availability, which means these pearls are not abundant. New competitors in the Philippines, Indonesia and Myanmar may change this balance and lower prices.
Chinese Akoya Cultured Pearls
What to look for: Not to be confused with Chinese freshwater cultured pearls, these are mostly small, low-quality pearls.
Cautions: Experts say this is not a recommended buy yet because prices are too high and average qualities are too low. But the Chinese are working on improvements.
Chinese Freshwater Cultured Pearls
What to look for: Pastel colors and a range of sizes make these pearls attractive to many consumers. Theyre not totally round yet.
Availability: Excellent in low to medium qualities, but very hard to get in top qualities and bigger sizes.
Cautions: Dyeing or irradiating enhances some colors. Ask your supplier about enhancements.
Japanese Akoya Cultured Pearls
What to look for: The best qualities are well-rounded and have high luster and slightly pinkish shades. Lower qualities look creamy and have thin nacre.
Availability: Its increasingly difficult to obtain high-quality matching strands with small and large akoyas. Middle- to lower-quality pearls are more available. Recent efforts to stem mollusk viruses and pollution may improve availability.
Cautions: In low qualities, thin nacre wears off quickly.
Tahitian Cultured Pearls
What to look for: Youll find a wide array of sizes, shapes and exotic colors. Baroque pearls, which are classified as lower quality, are less expensive so theyre a good way to introduce cultured black pearls to consumers on a budget. Bargain prices also make medium- to low-qualities a good entry-level product.
Availability: More available than ever. Top qualities have maintained their value. The Tahitian government promises to clamp down on lower qualities and overproduction to stabilize prices.
Cautions: Prices have been falling, though some experts believe they are beginning to stabilize because of new government regulations.
||The Chinese have made great strides in developing cultured freshwater pearls that are more spherical and have smoother, more lustrous surfaces. They come in a wide variety of pastel colors and white. Top qualities are rare. Pearls are courtesy of Kings Ransom, Sausalito, CA. Photo by Robert Weldon.
||Tahitian cultured pearls are one of todays great opportunities because they are more affordable than ever. A strand such as this one featuring baroque Tahitian cultured pearls with peacock, pistachio and magenta hues retails for $1,200-$1,500. Courtesy of King Plutarco Inc., Los Angeles, CA. Photo by Robert Weldon.
||Japanese cultured akoya pearls measuring 6mm-8mm one of the most popular necklace styles in the U.S. Supplies are very tight in better qualities, such as this strand. Courtesy of A&Z Pearls Inc., Los Angeles, CA. Photo by Robert Weldon.