GOING ONE, GOING TWICE....

In a tech-obsessed , frenzied world, where instant gratification is becoming the order of most businesses, auction houses swear by the charm of good old practice of auctioning while acing the art of mixing the old and new observes Vijetha Rangabashyam

Recently, in Geneva’s genteel summer, a stunning emerald and diamond ‘Beaumont Necklace’ fetched close to $3.6 million at Sotheby’s Magnificent Jewels and Noble Jewels sale. Glowing with eleven delicious cabochon sugarloaf Colombian emeralds weighing approximately 18 carats, this Art Deco necklace once belonged to the American socialite Hélène Beaumont.

Elsewhere in Hong Kong at the Christie’s Magnificent Jewels auction, a 3.44 carats fancy vivid pear shaped purplish ‘Bubblegum’ pink diamond ring by Moussaieff fetched $7.5 million. While rare gemstones of unmatched quality and provenance are becoming fewer and fewer and in some cases have even stopped occurring, their demand has been picking up at a steady pace amidst collectors. Auction houses have also always thrived on history; the cultural tenor at which time a piece was created and the beguiling story it comes with have always been of great importance. But as times evolve and the psyche of a collector with it, the manner in which these auction houses conduct themselves is also changing. In a tech-obsessed, frenzied world, where instant gratification is becoming the order of most businesses, auction houses swear by the charm of good old practice of auctioning while acing the art of mixing old and new.

Jewellery in the auction biz
The jewellery market has witnessed an exponential growth in the last ten years and jewels that find themselves in auction sales are regarded not only as a possession of luxury, but also as an asset class whose value increases over time.

“Jewellery has always appealed to buyers during periods of uncertainty and this continues to be the case. Aside from top quality gemstones and diamonds and signed and period jewels,provenance and rarity are key,” says Jessica Elliott, Associate Jewellery Specialist at Christie’s London.

Over the last few years, prices for jewels set with top quality, fancy coloured diamonds and gemstones with exceptional colour and clarity have skyrocketed. Sapphires from Kashmir, rubies from Burma and emeralds from Colombia are all seeing an unmitigated demand. Last September, at a Bonhams sale, a 5.03 ct pink diamond raked £2,228,750 (($2,935,263, $583,551 per carat) a new world record price per carat. “A lot of this is driven by the fact that the very best gemstone material is mined from depleted sources or mines that only have a finite number of years to run. This makes these gems incredibly scarce and the market has seen an increased level of demand as buyers look to secure an asset in an ever-diminishing pool of supply,” says Henry G. Bailey, Jewellery Specialist at Bonhams UK.

As with turnover, jewellery is the third largest department at Sotheby’s. “It has always played an important role in the auction market, as it transcends all collecting categories – every collector has either owned or purchased some form of jewellery. Last year, jewellery sales represented almost 13% of Sotheby’s worldwide sales,” says Nikita Binani, Jewellery Specialist at Sotheby’s.

With volatile exchange rates and the flux the economy is currently experiencing globally, jewels have been acting as a veil of safety for investors. “Jewellery is a primary category in the auction business today. Its is approximately worth U.S. $ 1 billion today with demands primarily coming from New York, Hong Kong as well as London,” says Graeme Thompson, World Wide Head of Jewellery at Phillips. In its recent jewellery sale at New York, Phillips witnessed a 33 per cent increase in sales as compared to its inaugural auction in December last year, and leading the auction was a 6.01 carat fancy intense orangy-pink diamond that fetched an impressive $1,340,000.

The collectors’ mindset and where they come from
It is not surprising to see buyers from 25 – 30 different countries at a jewellery auction these days. In fact, Sotheby’s saw participation from 88 countries last year at one of their jewellery sales.
“The global demand and the appreciation from new buyers has created further momentum in the market,” says Binani. The sensibility of collectors has changed over the years, they have become more selective in what they are looking for and have a more curated approach to building their repertoire.
The kind of jewellery that sells also largely depends on the kind of demand that pervades the market globally as well as a constant influx of new buyers. The audience is far more educated and is aware of the pulse of the market. “There is a great wealth of information out there, both offline and online, and auction houses are uniquely positioned as a source of publicly available information for prices achieved in the marketplace. Specialist advice and valuations lie at the heart of the auction business and can be invaluable - whether for new collectors wishing to build knowledge and insight, or for those with a more seasoned eye to stay in close touch with the market,” continues Binani.

While the biggest challenge for auction houses remains garnering a new audience, there has been a rather sudden surge of interest in jewels amidst the millennial collectors. Adds Thompson, “It is very interesting to see millennials more keen on contemporary, unique pieces with stronger brand stories as opposed to their parents who were more interested in jewels set in diamonds, emeralds and rubies.” Phillips continues to curate contemporary jewellery auctions that attract collectors between the age of 30-50. “The market for the rarest and most highly prized jewels is very international and at Bonhams we see interest from all corners of the world for such pieces, with an overwhelming number of collectors from Europe, America and Asia,” adds Bailey.

The defining trends
Imagine an auction room full of women bidders who are looking to collect jewellery they fancy – this is now becoming a reality. While some of them want to keep adding value to their moveable assets, some are just looking to gift themselves for an occasion, an anniversary perhaps. “The desire to acquire the finest and the rarest diamonds, coloured stones and natural pearls has prevailed for centuries so, of course, this continues to this day, with collectors demanding the best gemological laboratory reports and technical information regarding the condition of the lots,” says Elliott.

In terms of the type of jewellery that is sought-after, Christie’s has observed a continued appreciation for rare and iconic designs from the top jewellery maisons, especially period ring ($53,956 price per carat). A slew of British Modernist jewels along with a ring owned by artist Andy Warhol also saw strong prices.

When it comes to provenance versus craftsmanship, each attracts competitive bidding at jewellery sales in their own right. However, when a piece of jewellery offered for sale combine both exceptional craftsmanship and is set with the very best gemstones, this pushes collectors to their limit in order to purchase the jewel being offered. “This was the case with a necklace offered by Bonhams in April 2018 that was set with exceptional old mine Colombian emeralds and diamonds, by the renowned British Art Deco jeweller Hennell – this combination of top gemstone quality and exceptional craftsmanship from an important jewellery house is enormously rare to find and resulted in this particular necklace selling for £1,328,750 ($1,680,196),” says Bailey.

However, contemporary jewels from JAR, Viren Bhagat, Wallace Chan as well as Hemmerle, Stephen Webster and David Morris are also seeing a steady demand especially in online sales and amidst youngsters. These jewels at the end of the day are also bought with a purpose to wear. “We work with a lot of contemporary designers. This new crop of designers have managed to build a great brand story for themselves over the years with their edgy designs,” adds Thompson.

Diving into digital
Last year, the number of jewels sold online at Sotheby’s was up by 53% as compared to 2017, and 42% of the bids in their sales were placed online. “The millennial generation is showing a growing, deeper interest in online auctions, and young collectors are often intrigued by the accessibility to such jewels that represent great craftsmanship, fine materials, and top quality gemstones. Many of them are also looking to ‘invest’ in pieces that allow them to express their individuality in an increasingly digital world. This is something that was evident when we asked the innovative retailer Dover Street Market to curate our December Fine Jewels sale in London,” says Binani. In addition, the success of vintage and period jewellery goes hand in hand with a growing appetite for pre-owned luxury goods worldwide, and the fact that consumers, especially the young generation, looking for brands which are accountable for their environmental and social impact. In this context, auction houses are uniquely positioned in the jewellery e-commerce business and have become key providers of high-end luxury online.

Elliott from Christie’s feels optimistic about the online auctions market but feels sentimental about the good old charm of an auction room filled with excitement, “The excitement of a high profile live auction such as an evening sale or a single owner collection is hard to equal. It is fair to say that the way in which our clients participate in our live auctions has evolved dramatically over the last few years with the advent of new technology. Although this now means that there are sometimes fewer people physically in the saleroom on the day of the auction for smaller sales, we have seen a marked increase in international participation with collectors bidding via the Internet.” Online only sales are a significant part of Christie’s auction calendar and social media is playing an increasingly important role in engaging with prospective clients who perhaps have never thought to purchase via auction before.

Bonhams too has experienced a huge growth in the number of ‘live’ online bidders who participate in their sales and people who view their online jewellery catalogues via the Bonhams website. “Our Instagram page has over 100k followers and is becoming an increasingly important tool to promote the jewellery we offer for sale, and also as a means to interact with our clients via social media. The power of social media to connect with people all over the world has proven an extremely effective way of reaching out to an ever-widening audience in a way not previously possible,” says Bailey.

While changing with the times and reaching out to the right audience with the right tools is important, Thompson believes that the traditional ways of auctioning jewels is a far more enlightening experience, where the people actually come down to the auction house, to view the jewels, wear them and interact about them with the specialists. “People are becoming very comfortable with buying jewellery online but we would never want to remove the tangible experience of viewing jewellery where people share information with each other and have a very academic viewpoint about a piece of jewellery on display. Also with jewellery, people tend to fall in love with it when they wear it.”

The hard part
Not all pieces of jewellery sell all the time. After spending years in procuring a piece of jewel, there is every chance that it may not see the light of day and the reason is not always clear. “To this day, finding rare pieces of great quality as well as find those that are price competitive remains a challenge,” adds Binani. As collectors are becoming increasingly aware of the happenings in the jewellery world, they are also becoming extremely choosy with what they want to invest in. While extremely special pieces attract big bucks, many pieces get passed on. Garnering a newer audience is also a challenge that the jewellery auction business is faced with. “We are very much operating in a global market today and we need to be present and tackle all of the channels because you never know where your potential buyer is. With online live auctions, it is actually quite fantastic that we can actually identify where the customer is bidding. Auction buyers get a huge sense of excitement when they buy at live, online auctions and I think we have to build on that year on year.”