Diamond life

BRILLIANT stones, spectacular design and the promise of romance tied up in pretty blue boxes. No wonder everyone loves Tiffany.

The main floor of the Tiffany store, where you can buy into the Tiffany dream for as little as $US30.

AS chief gemologist for Tiffany & Co, itÂ’s a rare thing that gets Peter Schneirla excited.

It’s midday and as we meet for this interview in a wood-panelled room on the second floor of Tiffany’s flagship store on New York’s Fifth Avenue Schneirla tells me he thinks this week is going to be a good one for two reasons.

Today he’s confident he is going to close the deal on the sale of an item of jewellery with a price tag “north of $US2.5 million [$2.8 million]”, he says. Understandably, therefore, he checks his caller ID on his phone when it rings several times during our interview. “The sale I’ve got this afternoon is to a woman who has all the money in the world, a philanthropist, and she wants to buy this piece and she has questions that are highly technical and there are some questions she has about the stone’s origin.”

It would be a poor journalist who didn’t ask for more information on the buyer and the nature of the item of jewellery. Schneirla, however, knows exactly how to play this game. “I can’t tell you who the lady is,” he says before I even have a chance to politely ask. “But if you want an insight into her world and the type of customer I’m talking about then you should read the book 740 Park by Michael Gross.”

The reading suggestion seems like a pat answer to this sort of question and, to top it off, the following day I’m presented with a copy of 740 Park: The Story of the World’s Richest Apartment Building. According to the book’s jacket, “740 Park is rich in social history and peers deeply into a moneyed world - past and present, public and private - that most of us can only dream about”.

740 Park Avenue opened in 1930 and since then has been home to some of America’s wealthiest and most powerful families. Old-money names such as Vanderbilt, Rockefeller, Bouvier, Chrysler and Marshall Field are littered throughout the book as well as newer names such as Bronfman and Perelman. “All along, the building has housed titans of industry, political powerbrokers, international royalty, fabulous scam-artists and even the lowest scoundrels,” says Gross. In other words, people with all the money in the world.

As Schneirla’s mobile phone goes unanswered during our interview it’s safe to assume the mystery woman is still mulling over parting with $US2.5 million. After all, we’ve just experienced the worst recession in decades and everyone is thinking more carefully about their purchases these days.

The other rare thing that has Schneirla excited this week would require all the money in the world to acquire it - if the item were for sale. In a few days time he will travel to Washington to the Smithsonian Institution where he will get to handle the Hope Diamond in an unmounted state, one of the few people in the world to have ever done so. Why?

“Just for fun,” laughs Schneirla. Or publicity for the Smithsonian, it seems. In August last year the institution announced that the 45.52 carat Hope Diamond - which is thought to have been discovered some time in the mid-17th century and which some believe brings the owner bad luck - is to get a temporary new setting designed by the Harry Winston company, since the late Harry Winston donated the diamond to the Smithsonian in 1958. The public will get the chance to vote, via the museum’s website, for the final design from three options in what Schneirla describes as a very misdirected move.

Going by the comments on the Smithsonian website it seems many people agree with Schneirla and are voting for a fourth option - the original setting - and are even pleading with the museum not to change it. “Diamonds like the Hope and the Tiffany Diamond are just such powerful objects; they speak to people on an emotional level,” says Schneirla.

“They’re about the melding of art and science, they’re a snapshot of history, of love, passion, war, everything. Most people don’t know that the Tiffany Diamond is usually on show downstairs and you can come in and see it at any time.” Although not on this particular day as it is on vacation in Chicago as part of an exhibition.

The Tiffany store on Fifth Avenue at the corner of 57th Street is, in the words of Schneirla, “at the crossroads of the world”. Its neighbours are a massive Louis Vuitton flagship store to the north, the Trump Tower to the south and across the street the department store Bergdorf Goodman. The Plaza Hotel and Central Park are only a few metres away. While the intersection’s status as the centre of the world might be up for debate, its position in New York City isn’t. As well as being a retail store, the Tiffany building on Fifth Avenue is also a tourist attraction and the combination proves to be a very lucrative one. Despite having more than 200 stores around the world, the Fifth Avenue store accounts for 10 per cent of total sales (with the US accounting for half of them).

Tiffany & Co was founded in 1837 by Charles Lewis Tiffany and John B. Young at 259 Broadway as a stationery and fancy goods store with a $US1000 advance from Tiffany’s father. Charles Tiffany was inspired by the natural world, which he interpreted in designs for hollowware and flatware and later in jewellery. It was not until after 1880, when Paulding Farnham joined the company, that Tiffany won recognition as a great jewellery house.

The company moved to several locations in Manhattan before settling at its present-day location in 1940. The main ground floor selling area of the Tiffany store at 727 Fifth Avenue is spectacular not only because it is where you will find some of the company’s most jaw-dropping jewels but also because of its proportions, its high ceiling and column-free design. It’s been the setting for many films including, of course, Breakfast at Tiffany’s. Holly Golightly was right: there is something truly magical about the place.

The company embarked on a major refurbishment of the Fifth Avenue store in 2000, which was completed in 2006. On the second floor there are more breathtaking jewels on display and this is where you’ll find a mainstay of the Tiffany business: engagement and wedding jewellery. The third floor houses the Frank Gehry Collection and sterling silver jewellery, and the homewares collection is on level four. In 2008, Tiffany opened a Patek Philippe boutique. the first in the US, on the mezzanine level, marking a relationship between the two companies that dates back to 1851.

“There is no question the past 12 months have been the most difficult period for retail sales that we’ve experienced, at least in my memory,” says James E. Quinn, president of Tiffany & Co. “The US has been the most difficult market for us [but] in some markets, like Australia, Europe and Asia, sales have continued to grow so we benefit from the fact that we’re a global business now. Half of our revenue and half of our profit now comes from outside the US and each of the economies around the globe are in different cycles and different periods of difficulty or prosperity, which has benefited us to a great extent.”

And thank heavens for Christmas. Sales for the final two months of 2009 increased by 17 per cent worldwide and 15 per cent for the US alone, a better than expected result that led Tiffany & Co to raise its full year earnings outlook. In a press statement in January, it announced that it expects to achieve sales of $US2.7 billion for the 12 months to December 31, 2009, which will be $17 million short of the previous 12 months. The company will announce its full year results on March 22. The company’s own figures, as well as better than expected Christmas sales at other high end retailers in the US such as Saks Fifth Avenue and Nordstrom, are signs, says Quinn, that consumer spending is recovering and that shoppers are feeling more comfortable about non-essential purchases.

“Certainly there is a sense that the worst is over,” says Quinn. “There is also a sense that people are not reacting in fear and that there is a greater degree of confidence about the future and that certainly propels sales for Tiffany. And especially in New York there is definitely an improving psychology. It’s not all back to the way it was, but I certainly felt a lot better this Christmas than I did the one before that.

“I think one of the things that does help us a great deal in these difficult times is that a large proportion of our business is around engagements and weddings,” he continues. “And generally a bride is not going to put off her wedding because of a recession. People are still falling in love and getting engaged. It might be scaled down a bit but it’s clearly a purchase for a lifetime and it’s the most important jewellery purchase in somebody’s life, at least up until that point, so that has given us a more stable base of business. The fact that people want to celebrate important moments in their lives such as marriage, the birth of a child, with a piece of jewellery helps to sustain our business. We may not get the huge spikes that some of the fashion luxury businesses get in the good times but, in the difficult times, we don’t get the huge downturns. Maybe people spend less, or they may not be purchasing as often, but it helps to stabilise the peaks and troughs for us.”

“Tiffany’s greatest differentiating factor is also our biggest challenge,” says Peter Schneirla. “If you want to spend $30, we’ve got it. If you want to spend $30 million, we’ve got that too.” Less expensive items create an affordable entry level into the brand, a strategy that has allowed many luxury goods companies to flourish in recent years. The challenge then for a business such as Tiffany is to balance expansion with the aspirational nature of the brand.

“The definition of a luxury business is that exclusivity is part of the brand character, so we can’t stretch our limits,” says Quinn. “That said, we are in the midst of what I would call an adolescent phase of growth in markets around the world and we have an enormous amount of potential for further growth [here and overseas].”

The seventh floor of the Fifth Avenue store - and one that is not open to the public - is perhaps the most magical place. Here you will find a small group of highly skilled craftsmen who make the one-of-a-kind, statement jewellery pieces that Tiffany is famous for. In the light-filled corner room, with views up to Central Park, is a group of jewellers, many of whom have been with the company for decades, working with tools that have changed little in over 100 years on items that can cost millions of dollars and take years to assemble.

The jewellery pieces created in the seventh floor workshop are showcased in the company’s annual Blue Book collection, which was first published in 1845. Today’s version showcases rare diamonds and coloured gemstones in designs inspired by jewels in the Tiffany & Co archives. The production of the Blue Book collection, and all the other jewellery collections Tiffany produces, is overseen by executive vice president Jon King. Each year over 100 pieces are made for the Blue Book and, as well as serving up rare coloured stones and innovative designs, King says one of the aims is to “bring to the attention of our clients what we call the lost arts of jewellery making. Techniques that they might not be familiar with or that other jewellers perhaps no longer do. There is artistry and craftsmanship in these pieces at its finest.”

The craftsmen who create these pieces often work from little more than a photograph of an item from the Tiffany archives. There are no blueprints or patterns to copy here. “We joke about items in the Blue Book as our children because we work on them for so long,” says King. “In some cases, putting the stones of matching quality together can take two or three years. When we are finally done and send them out into the world we miss them. And when they are sold we bite our tongues and hope that the new owner will take good care of the piece.”

On leaving the workshop, dazed by what I have seen and been allowed to hold, I wonder what it might be like to hold something like the Hope Diamond or the Tiffany Diamond. Then, as if by magic, Peter Schneirla gets into the lift.It occurs to me as I shake his hand that I am shaking hands with someone who recently held the Hope Diamond. “By the way, the business I was talking about earlier in the week, we were successful with that,” Schneirla says in reference to the $US2.5 million sale he was working on. So much for the curse of the Hope Diamond.

Facts and facets
Tiffany & Co was founded by Charles Lewis Tiffany and John B. Young at 259 Broadway in 1837 as a stationery and fancy goods store.
In 1902, Louis Comfort Tiffany, the son of the company’s founder, became Tiffany’s first director of design. He is best known for his work in leaded and stained glass.
The Tiffany store on the corner of Fifth Avenue and 57th Street opened its doors in October 1940 and was designed by Cross & Cross. The ground floor is the largest column-free retail space in the US. It was also the first store to have central air-conditioning.
The Tiffany Diamond is one of the largest fancy yellow diamonds in the world. It was discovered in South Africa in 1877 and purchased the following year for $US18,000. It now weighs 128.54 carats and has 82 facets. Only two women have ever worn the diamond - one was Audrey Hepburn, who wore it as part of a necklace in publicity photographs for Breakfast at Tiffany’s.
The Tiffany Setting, in which the diamond is lifted above the band and held in place by six platinum prongs to maximise the stone’s brilliance, was introduced in 1886.
The Tiffany Blue Book was first published in 1845 and is thought to be the first mail order catalogue in the US.
Throughout Tiffany’s history, the US and foreign governments have called upon the company to create special commissions. Among them are the Congressional Medal of Honor, the United States’ highest military award; and the 1885 redesign of the Great Seal of the United States, which can be seen on official government documents as well as on the dollar bill.
The Tiffany heirs sold their shares in the company to Hoving Corporation in 1955, which sold the company to Avon in 1978. In 1984 it was bought by private investors and in 1987 Tiffany was listed on the New York Stock Exchange.