Art Market Monitor

Global Coverage ~ Unique Analysis

Sotheby’s to Offer $20-30m Raj Pink in Geneva

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Following the successful re-sale (it was auctioned once but the buyer defaulted) of the CTF Pink Star diamond in April for $71m, Sotheby’s has returned to the rarified colored diamond market with another pink diamond about two-thirds the size of the CTF Pink Star.

The Raj Star was discovered in 2015. It weighs 37.3 carats and carries a $20-30m estimate range before the November 15th sale in Geneva:

The Gemological Institute of America (GIA), which certified the diamond, characterized it as an “astonishing stone”, describing its hue as “a very bright and ravishing fancy intense pink color”. It continued, “For a diamond to display strong, unmodified pink color like that observed in The Raj Pink is rare, particularly at so considerable a weight”.The discovery of a gem-quality pink diamond of any size is an extremely rare occurrence. Of all diamonds submitted to the GIA each year, less than 0.02% are predominantly pink.

 

Hot On the Trail of Sotheby’s Pink Diamond Sale

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Late last week, two journalists who cover the art market enthusiastically retweeted Lee Rosenbaum’s exposé on the slow payment by the buyer of Sotheby’s massive pink diamond that was sold twice in Asia, once in 2013 and again, after the original bidder backed out of the deal, in 2017.

Although it is understandable that after an embarrassing turn of events for the auction house, which guaranteed the stone for the 2013 sale and then brought in financial partners to reduce the balance sheet load until the diamond could be sold again four years later, Rosenbaum might want to look closely at the sale. After all, the buyer seems to be having trouble paying just like the one before.

Here’s how Rosenbaum tells it:

The specific time limit to “collect the money from the [April] buyer” is disclosed in Sotheby’s latest Form 10-Q quarterly report, filed yesterday with the SEC: It reveals that “the purchaser of the Pink Diamond, who is one of the largest jewelry retailers in the world [identified in the sale’s press release as Chow Tai Fook], is legally obligated to pay the purchase price by no later than Apr. 4, 2018.” The previous quarter’s 10-Q, dated May 10, did not mention the possibility of a year-long payment delay.

The key words in Rosenbaum’s own report are “legally obligated to pay.” In other words, there’s always a chance that Sotheby’s will have to go to court to try to obtain the payment but it is more likely than not that Chow Tai Fook will pay for the stone. They’ve agreed to do it. That’s a far cry from what happened in 2013.Continue Reading

Hong Kong Rises as Gem & Jewelry Center Reflecting Asian Appetite for Alternative Stores of Value

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The South China Morning Post has a booster story on the rise of Hong Kong as a Jewelry trading center as Mainland buyers continue to defy capital export controls and sock their surplus cash into the large colored stone and vintage jewelry market.

Asian buyers have long had a taste for compact, portable stores of value in the form of gem stones. So the increase in buying activity that makes Hong Kong a global center is more a measure of the wealth in China and the safe havens it seeks. Here’s the SCMP:

Thanks to the participation of mainland buyers at Hong Kong auctions, the city has surpassed New York as the world’s second-largest jewellery auction hub and is now on a par with Geneva. To tap the rising demand for jewellery and arts, mainland-headquartered auction houses, such as Poly Auction, Tiencheng International Auctioneer and China Guardian, have opened Hong Kong branches, competing with established international houses, Sotheby’s, Christie’s and Bonhams. The presence of mainland auctioneers has consolidated Hong Kong’s status.

What’s more interesting, though one has to be conscious of the source, is that the auction houses report buyers are moving toward the very wares the market has been chasing over the last decade. Namely, big diamonds are giving way to lesser stones and signed vintage pieces valued for their design.Continue Reading

Sotheby’s Brings ‘Pink Star’ Diamond to Hong Kong

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Sotheby's Pink Star Diamond

Sotheby’s announced today that it is bringing back the Pink Star diamond to the marketplace. The nearly 60ct Flawless Fancy Vivid Pink diamond was originally sold in Geneva three and a half years ago for a record price of $83m. Then the buyer reneged on his bid and Sotheby’s—which had guaranteed the stone for a reported $60m—took the diamond into inventory.

Last year, Sotheby’s sold off a portion of the stone to two other dealers, Diacore and Mellen Inc., but retained an ownership interest and stands to benefit from the commission should the stone sell in Hong Kong on April 4th. The estimate is $60m suggesting that Sotheby’s and its partners see the Asian market as strong enough to get a profitable sale done.

 

Sotheby’s Puts Real Estate, Classic Car, Jewelry and Watches Under One Executive

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Maarten ten Holder in the box at an RM Auctions sale

Sotheby’s made an announcement this morning that continues the process of rationalizing the company’s various efforts. One of CEO Tad Smith’s regular refrains has been to expand the Sotheby’s brand into non-art areas.

That brand benefits greatly from a licensing arrangement with Realogy that puts the auction house’s name on a huge global network of real estate affiliates. It has also acquired a stake in classic car maker, RM Auctions. The jewelry and watch sectors remain important across the auction industry.Continue Reading

Diamond Dealer Defaults on Sotheby’s Pink Diamond

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Isaac Wolf on You Tube

During yesterday’s earnings call, Sotheby’s revealed that one of its major successes of 2013, the sale of a 60kt pink diamond for $83m to dealer Isaac Wolff had not gone through. The diamond was guaranteed. So Sotheby’s now owns it for $72m. Katya Kazakina did a little Googling to come up with the rationale behind Wolff purchase:

“It’s not that I am buying this with the money I have in my piggy bank,” he said. “It’s basically a group of investors, financial people that are backing me in this and they are doing this as an investment, and hope to make a big profit.”

Wolf said he saw “a great opportunity” in buying the diamond because “this particular color of the diamond today in the 10 carat sells for $2.5 million a carat.” At almost 60 carats, his diamond could be worth $150 million, he said.

“And I bought it for $83 million,” he said in an interview. “So you have to admit that I bought it well.”

Sotheby’s Pink Diamond Buyer Defaulted on Record Purchase  (Bloomberg)

Diamond Prices Reflect Art Market Trends

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No one ever expects a diamond to end up in a museum—though many have. So perhaps that’s why we don’t see the same outrage about diamond prices that we’re seeing around the prices for works of art. But Sonia Kolesnikov-Jessop shows from her conversations with Christie’s Rahul Kadakia in the International New York Times that nearly identical trading patterns are emerging:

Large diamonds have proven to provide good returns on investment in recent years. A 50.01-carat rectangular cut diamond that was sold at Christie’s New York in 2005 for $4.2 million came back to market last year and sold for $8.4 million. Both times, the diamond was purchased by the jeweler Laurence Graff, who had resold it in the interim.

Such large stones are purchased by individuals and jewelry firms with an “investment element always present,” Mr. Kadakia said, adding that the fact that Mr. Graff was willing to pay twice as much the second time around was “a very clear indication of the direction for the rare diamond market.”

Gem stones have no more economic value than art works do. They have the added benefit of being even more like gold than art works in that there is an atavistic sense that they are equivalent to money and have been used instead of money for as long as human beings can “remember.” Plus, the stones are becoming as finite as an artist’s output:

The Rio Tinto’s Argyle mine, which produces more than 90 percent of the world’s natural pink diamonds, is expected to be closed in 2020.

On October 14, Argyle held its annual sale to invited members of the trade: a single bid per stone for each of the 64 lots on offer. Two price records were broken: the Argyle Phoenix, a 1.56-carat fancy red diamond, fetched the highest price per carat for a diamond ever produced from the Argyle mine, selling for more than $2 million.

“In the colored diamond world $1 million per carat is now normal, which in itself is a headline,” Mr. Kadakia said.

 A Rising Appetite to Invest in Colored Diamonds (NYTimes)

Sotheby’s Pink Star Makes $83m in Geneva

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Sotheby's Pink Star Diamond

Update: the stone sold today for $83m

The records are not all coming in Contemporary art. Just before Christie’s phenomenal sale, the Geneva jewelry auction set its own record for an organge diamond that many suspect won’t last through today. That’s because Sotheby’s has its own jewelry sale led by the Pink Star diamond which many think can make $60m or more which would take away top honors from the Graff Pink which made $46m three years ago:

The oval-cut type-IIa stone is the most valuable diamond ever to be offered at auction according to Sotheby’s, and the largest internally flawless fancy vivid pink diamond ever to be graded by the Gemological Institute of America (GIA).

“It ticks all the boxes in terms of perfection,” says David Bennett, chairman of Sotheby’s international jewellery division for Europe and the Middle East and also chairman of Sotheby’s Switzerland, who will preside over the sale. When the diamond went on show in October “there were gasps from many of the people who came to see it”, he says.

Mined in Africa as a 132.5-carat rough diamond by De Beers in 1999 and cut and polished for two years by Steinmetz Diamonds, it was unveiled and exhibited before being sold privately in 2007. A diamond such as the Pink Star comes up “maybe twice in a lifetime”, says Russell Shor, a GIA senior industry analyst. “You can’t even say it is one in a million – it is one in an X-number of million.”

The Pink Star is the latest challenger in a series of record-breaking lots at high-profile auctions as savvy buyers seek exceptional pieces and stones, their confidence boosted by gemological laboratory reports.

“It is going to appeal to the people who want the rarest of the rare, and these days at auction that seems to be what is being sought,” says Mr Bennett.

Sotheby’s Pink Star diamond expected to break $46.2m record – FT.com.

Sotheby’s Geneva Jewels = $108.3m

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Sotheby’s released figures for its Geneva sales of gems and jewelry. Less eye-catching in terms of price but possibly more important for understanding the direction of the jewelry market was the white-glove sale of items from the personal collection of Suzanne Belperron. Sixty of the designer’s own items made $3.45m, well above the pre-sale price tags:

Sotheby’s set a new world record of $108,377,219 for a various owner jewellery sale, with the conclusion of its two-day Magnificent Jewels and Noble Jewels Sale, surpassing the record set by Sotheby’s Geneva in November 2010 of $105 million. Over the two days 24 lots sold for over $1 million. The Beau Sancy, one of the most important royal diamonds to ever come to auction, sold for CHF 9,042,500 ($9,699,618). The result achieved by the celebrated jewel brought the total for the May Jewellery auctions to an outstanding total of CHF 104,298,625 ($111,836,526), almost doubling the pre-sale low estimate of CHF 54 -85 million

 

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